How does the Iowa tuition and textbook credit work with an ESA?
Only what the family pays itself counts. Expenses covered by Students First ESA funds are excluded, so the credit applies to the gap above the $8,148 award and to fees the ESA did not pay.
The Iowa Department of Revenue's own example: tuition of $9,000 with $7,635 paid by the ESA leaves $1,365 out of pocket and a credit of $341.25.
What counts as a qualifying expense?
Tuition at an accredited nonprofit K-12 school or for competent private instruction, textbooks and instructional materials, supplies on the school's list, and school-charged fees such as athletics, activities and field trips during the school day. A computer qualifies when the school requires it.
Food, lodging, ordinary clothing, tutoring not paid to a school, yearbooks, and amounts for teaching religious doctrine or worship do not count.
Can homeschool families near Des Moines claim it?
Yes. Dependents receiving private instruction in Iowa qualify, so a homeschooling family can claim 25 percent of up to $2,000 of eligible costs per child even though the ESA itself does not fund homeschooling.
What Iowa Tuition and Textbook Tax Credit is and isn't
| It is | It isn't |
|---|---|
| A credit on the parent's Iowa income tax return | A payment sent to the school |
| 25% of the first $2,000 per child | A deduction of the full tuition |
| Available to homeschool families | Available for costs already paid by the ESA |