Generally revise education tax credit laws
HB 922 revises Montana’s education tax credit laws by creating a new nonpublic-school parent tax credit and adjusting how certain education-related tax credits are reviewed and capped. The bill would allow a resident taxpayer who is a parent or legal guardian of an eligible student to claim a $250 annual income tax credit for each qualifying child ages 5 through 18 who is educated in a nonpublic school. The credit could be carried forward for up to three years, could not be claimed for the same student by more than one taxpayer, and would be claimed through the Montana income tax return with taxpayer attestation to the Department of Revenue.
The bill also amends existing law governing the review of tax credits by the revenue interim committee. It adds the new nonpublic-school parent credit to the list of credits scheduled for review in the 2027 biennium and later, and it changes the aggregate limit for the existing innovative educational programs donation credit so that the cap is tied in part to the amount of scholarship-organization credits and the new parent credit claimed in the prior year. The bill keeps the existing school-district donation credit structure in place, including preapproval, donation receipts, carryforward rules, and the requirement that excess donations be redirected to public-school flexibility funding and pupil costs.
In practical terms, HB 922 would expand state tax benefits for families using private or nonpublic schooling while also affecting the administration and future review of education-related tax expenditures. It would amend sections 15-30-2303 and 15-30-3110, MCA, create a new codified credit in Title 15, chapter 30, and apply beginning with tax years after December 31, 2025. The new parent credit would terminate December 31, 2029, while the bill’s changes to review schedules would continue to influence legislative oversight of education tax credits.
The general sentiment reflected in the available voting history was favorable at the committee level, with the House Education Committee voting 15-0 to table the bill, which indicates unanimous committee action but not necessarily support for passage. No committee transcript excerpts were provided, so there is no recorded debate to show detailed arguments for or against the measure. The bill ultimately died in process, suggesting it did not advance beyond committee consideration.
The main point of contention, based on the bill’s structure, is the policy choice to extend a direct tax benefit to parents of children in nonpublic schools while also adjusting the balance of education tax-credit resources and review mechanisms. Supporters would likely view the bill as providing parity for families choosing private education and recognizing out-of-pocket education expenses, while critics may focus on the fiscal cost, the use of public tax revenue for private-school families, and the interaction with existing caps and credits that support public-school innovation and scholarship organizations.
HB 922 would add a new refundable-style income tax credit structure, though limited to a taxpayer’s liability, for parents or guardians of eligible students in nonpublic schools, and would amend Montana’s tax-credit review framework to include that credit in future legislative review cycles. It would also revise the aggregate limit calculation for the innovative educational programs donation credit under 15-30-3110 by linking the cap to the prior year’s scholarship-organization credit claims and the new parent credit, thereby changing how much donor-supported funding can be incentivized each year. The bill would affect resident taxpayers with children in nonpublic schools, school districts receiving donations for innovative programs, and the Department of Revenue and Revenue Interim Committee in administering and reviewing these credits.
The available record suggests a generally procedural or neutral committee posture rather than a strongly documented debate, because no transcript excerpts were provided. The House Education Committee vote was 15-0 to table the bill, showing unanimous committee action at that stage, but the bill still died in process. That outcome indicates the measure did not gain enough momentum to advance, even though the text itself reflects a policy preference for expanding education tax credits.
The central controversy is between expanding tax relief to families using nonpublic schools and preserving or prioritizing public-school-related tax credit structures. Opponents would likely question whether the state should subsidize private education through the income tax code, while supporters would argue the credit recognizes ordinary education expenses and creates parity between public and nonpublic school settings. A secondary point of contention is the bill’s effect on aggregate credit limits and the potential fiscal impact on existing education tax-credit programs, including donor incentives for innovative educational programs and scholarship organizations.