New numbers from the Wisconsin Department of Revenue show for the first time the value of the state’s K-12 tuition tax deduction that was promoted and passed through the advocacy of the Wisconsin Council of Religious & Independent Schools (WCRIS) and its members.
The deduction saved private school parents and guardians $11.2 million in its first year, according to newly available DOR reports that were analyzed by the Wisconsin Taxpayers Alliance at the request of WCRIS.
After decades of pushing for the deduction, WCRIS and its member schools and parents successfully won its creation in 2013. The deduction became effective with the 2014 tax year, which people claimed and filed in 2015.
This is the first time state estimates have been available showing the impact of the deduction for private K-12 school parents and guardians who claimed the savings on their 2014 tax forms.
The DOR figures show 37,260 Wisconsin taxpayers claimed the deduction in 2014 and reduced their taxable income by $174,168,620, according to WisTax.
The analysis also shows that there’s room for more use of the deduction by private school parents, said WCRIS Executive Director Sharon Schmeling.
“The state estimated the deduction would cost $30 million annually, but our parents have only claimed one-third of that. There are tax savings sitting on the table waiting for our parents to collect them.”
The value of the tax deduction for the average Wisconsin private school family is around $240 per elementary school child and $600 per high school student, Schmeling noted.
When parents collect the deduction, they are also indirectly helping their schools, she said.
“Because of this tax deduction, schools are able to make their necessary increases in tuition without parents feeling it on their overall income,” she said. “But that only works if parents are actually collecting the deduction.”
Regardless of income, parents and guardians are eligible for a maximum deduction of $4,000 per child in grades K-8 and $10,000 per child in grades 9-12. Students transitioning from eighth to ninth grade are eligible for both deductions.
Any amount spent on tuition and book fees are eligible for the deduction. Book fees include digital books, such as a laptop or tablet fee issued by the school. Principals and parents can find information about the tax deduction and the state’s official claim form here.
In addition to helping parents file for the deduction by sending them the state’s claim form, schools should review their billing procedures. They may find it prudent to shift some peripheral expenses into tuition, which are being invoiced separately, Schmeling said.
“Our Association and schools worked for nearly 30 years to win this deduction. It’s a valuable tool in the financial formula that keeps private K-12 education in Wisconsin strong. We need to maximize its use.”
