Prove income tax credit for nonpublic school expenses such as private or homeschool tuition
Summary
HB 209 would create a new Montana income tax credit for nonpublic school education expenses, including private school tuition, homeschooling-related instruction, textbooks, extracurricular activity fees, and certain additional educational expenses. The bill defines a qualifying student as a dependent who received full-time academic instruction in a nonpublic education setting for at least one semester during the tax year, and it sets detailed definitions for covered expenses such as tutoring, special education instruction, educational therapies, testing fees, assistive technology, and some public-school-type activity costs.
The credit would equal the lesser of the taxpayer’s qualifying expenses or 44.7% of the applicable per-ANB maximum rate under state school funding law, and it could not exceed the taxpayer’s income tax liability or be carried forward. The bill also includes rules for divorced or separated parents, authorizes the Department of Revenue and the Superintendent of Public Instruction to adopt implementing rules, and amends the state tax-credit review statute to add this new credit to the list of credits subject to periodic legislative review. The credit would apply to income tax years beginning after December 31, 2025.
Impact
HB 209 would add a new tax expenditure to Title 15, chapter 30 of the Montana Code Annotated by creating a refundable? no, nonrefundable income tax credit for nonpublic school education expenses, while also updating the state’s tax-credit review framework to include the new credit in the biennial review process. It would affect taxpayers with children in private schools or homeschooling arrangements, as well as families paying for certain educational therapies, tutoring, testing, and extracurricular costs. The bill also directs state agencies to write rules and forms to administer the credit and sets limits on documentation requirements tied to compulsory attendance compliance.
Sentiment
The available voting history suggests the bill moved with strong support at the committee stage, passing a House Taxation motion to table by a 21-0 vote. No committee transcript excerpts were provided, so there is no recorded floor or committee debate in the supplied materials. Overall, the bill appears to have been treated favorably by the committee, at least procedurally, though it ultimately died in process.
Contention
The main policy issue underlying HB 209 is whether state tax policy should subsidize private and homeschool education expenses. Supporters would likely view the credit as family tax relief and as recognition of nonpublic education costs, while critics may object to using state revenue to support private schooling or to the potential fiscal impact on the general fund. The bill also contains detailed eligibility and expense definitions, which could raise administrative questions about what qualifies as an educational expense, how to verify compliance, and how divorced or separated parents may claim the credit. Another possible point of contention is the credit amount, which is tied to the per-ANB funding formula and may be seen as either too generous or too limited depending on perspective.