What States Offer Tax Breaks for Homeschooling?

As the number of families choosing to homeschool their children continues to grow, so does the financial commitment required to provide a quality home-based education. The costs associated with curriculum, books, technology, and other supplies can be substantial. In response, various financial relief mechanisms have become available, though they differ significantly in form and availability across the country.

Understanding the financial support available is a key consideration for many families managing the costs of homeschooling. The landscape of these benefits is not uniform, with opportunities varying from one jurisdiction to another. Navigating these programs requires an awareness of the specific types of relief offered and the rules that govern them.

States Providing Tax Credits

A tax credit offers a direct, dollar-for-dollar reduction of a person’s income tax liability. For example, a $500 tax credit reduces the amount of tax owed by $500. Several states have recognized the expenses involved in private education and homeschooling by establishing tax credit programs that families can utilize to offset these costs.

In Illinois, families can claim the K-12 Education Expense Credit. This nonrefundable credit is for 25% of qualified education expenses after the first $250 spent, with a maximum credit of $750 per family. To be eligible, a family’s adjusted gross income must not exceed $500,000 for joint filers or $250,000 for single filers. For homeschoolers, qualified expenses specifically include the costs of book rentals and lab fees associated with their program.

Minnesota provides the K-12 Education Credit, which is refundable, meaning families can receive the credit even if they do not owe any state income tax. The credit covers 75% of eligible educational expenses. Qualifying expenses are broad and include costs for instructional materials, textbooks, and up to $200 for computer hardware and educational software. The program is subject to income limitations; for the 2024 tax year, a family with one or two children must have an adjusted gross income below $76,000 to qualify, with the threshold increasing for larger families.

Ohio offers a nonrefundable tax credit specifically for families who homeschool. The Home Education Tax Credit allows taxpayers to claim up to $250 for qualifying educational expenses. These expenses include payments for books, supplementary materials, and computer software. However, the cost of computer hardware and similar electronic devices is explicitly excluded. To receive the credit, families must provide documentation, including a copy of the letter from their local school district superintendent excusing the child from compulsory attendance.

States Providing Tax Deductions

A tax deduction functions differently from a credit by reducing a taxpayer’s total income that is subject to tax. While a credit directly lowers the tax bill, a deduction lowers taxable income, and the ultimate tax savings depends on the individual’s tax rate. For instance, a $1,000 deduction for someone in a 5% tax bracket translates to a $50 tax reduction.

Louisiana allows parents to deduct 50% of the actual costs spent on their child’s home education, with a cap on eligible expenses of $5,000 per student. This results in a maximum deduction of $2,500 per child. Qualifying expenses include the purchase of curriculum, textbooks, and other supplies directly related to providing instruction.

Indiana provides a Private School/Homeschool Deduction for parents. Families can deduct up to $1,000 per eligible dependent child for expenses related to their education. There are no income limits to claim this deduction. Qualifying expenses include:

• Tuition and fees
• Textbooks and curricula
• Workbooks and school supplies
• Computer software

Minnesota offers families a choice between its K-12 tax credit and a K-12 Education Deduction. The deduction allows parents to subtract educational costs from their Minnesota taxable income, with a maximum of $1,625 for each child in grades K-6 and $2,500 for each child in grades 7-12. Unlike the state’s credit, there is no income limitation for the deduction. Qualifying expenses include costs for textbooks, instructional materials, and fees for academic tutoring and enrichment programs.

Using 529 Plans for Homeschooling Expenses

A 529 plan is a tax-advantaged savings account traditionally used to save for college expenses. Contributions to these state-sponsored plans can grow tax-deferred, and withdrawals for qualified higher education expenses are free from federal income tax. Federal law expanded the use of 529 plans, allowing account holders to withdraw up to $10,000 per beneficiary, per year, to pay for tuition at an eligible elementary or secondary school. This provision extends to homeschooling, allowing families to use these tax-advantaged funds for certain educational costs.

The funds must be used for qualified expenses, which for K-12 purposes under federal law, are narrowly defined primarily as tuition. While the federal government permits these tax-free withdrawals for K-12 tuition, the state tax treatment is not uniform. Many states have conformed their own tax laws to the federal rules, allowing for state tax-free withdrawals as well.

In non-conforming states, withdrawals from a 529 plan for K-12 expenses may be subject to state income tax and potentially a penalty on the earnings portion of the withdrawal. Although the federal law specifies “tuition,” what constitutes a qualifying expense for a homeschooler can be interpreted more broadly at the state level to include curriculum, textbooks, and online learning programs. It is important for parents to verify their specific state’s rules regarding 529 plan withdrawals for K-12 and homeschool expenses to ensure compliance.

Education Savings Accounts and Scholarship Programs

Beyond traditional tax credits and deductions, a number of states offer direct funding to families through programs like Education Savings Accounts (ESAs) and scholarships. These programs operate differently from tax benefits, as they provide parents with funds directly. The state deposits money into a dedicated account that parents can then use to pay for a wide array of approved educational products and services.

Arizona’s Empowerment Scholarship Account (ESA) program is one of the most expansive in the nation. It provides parents with 90% of the state’s per-student base funding to use for a variety of educational expenses. The funding, which averages over $7,000 per student annually, can be used for:

• Curriculum and textbooks
• Tutoring and educational therapies
• Fees for standardized tests

Florida offers several scholarship programs, including the Family Empowerment Scholarship for Educational Options (FES-EO). This program provides an average of $8,000 per student, which is deposited into an ESA. A related option, the Personalized Education Program (PEP), is specifically designed for students in a home education setting and is also funded through the FES.

In Utah, the Utah Fits All Scholarship Program provides families with an $8,000 ESA. This program is available to all Utah residents eligible for K-12 public school, including homeschoolers. If applications exceed available funding, the program uses a priority system that favors students from lower-income households. Funds can be used for:

• Curriculum and instructional materials
• Educational software
• Fees for testing and tutoring services

Iowa’s Students First ESA program provides funding for students to attend accredited private schools. While it does not directly fund homeschooling, families who choose to transition from homeschooling to an accredited private school can become eligible. The ESA provides an amount equal to the state’s per-pupil funding, which was $7,635 for the 2024-2025 school year.