Big Updates to the Parental Choice Tax Credit in Oklahoma – What Families and Schools Need to Know

Oklahoma's Parental Choice Tax Credit is getting a makeover starting July 1, 2025, thanks to Senate Bill 684 (SB 684), and it’s great news for parents seeking flexible educational options. The revised law improves access, transparency, and ensures more predictable funding for families.

Here's what you need to know:

What Is The Parental Choice Tax Credit (PCTC)?

The Parental Choice Tax Credit (PCTC) is a refundable income tax credit that helps families cover the cost of private school tuition and fees or other educational expenses if they homeschool or use nonpublic educational providers.

Key Changes You Should Know (Homeschool)

• Families educating children outside traditional schools can claim up to $1,000 per student (with a $5 million cap for the program) for qualifying expenses like:
  • Curriculum
  • Tutoring
  • Testing & prep
  • Online programs
• If credits claimed exceed this limit, the Oklahoma Tax Commission will adjust the amount each applicant receives using a formula: $5,000,000 ÷ Total claimed two years prior
• Overage is allowed but will be factored into future year reductions.
• You will continue to claim the refundable tax credit on your state income taxes.

Key Changes You Should Know (Private School)

• Beginning in 2026, the application window will open on March 15th and close on June 15th annually. Applicants will be notified within thirty (30) days of the closure of the application window (July 15th). Families of students who are approved for the tax credit will receive notification via email. Families of denied students will receive notification via mail (USPS). Families who are denied should determine whether they have an issue that can be addressed, and then allow them to reapply. Have questions? email us at parents@okpsaedu.org. 
  
• Priority considerations are:
  • Tier 1: Families with income $150,000 or below.
  • Tier 2: Families who received the credit the year prior.

• Applications for students who did not attend a private school in the previous year, and whose families have an income exceeding $150,000.01, will be processed on a first-submitted basis until the remaining tax credit funds are depleted.
  
• Families receiving SNAP, TANF, or SoonerCare do not have to submit income documents. DHS and the Health Care Authority will verify eligibility.
• Payments will be sent on an annual basis by August 30th, to the private school and require the parent's signature. 
  
• Unused credits will be reallocated.
  • If a family opts out, becomes ineligible, or does not use the credit, the Oklahoma Tax Commission (OTC) will reassign those funds to another eligible family. This must occur by September 1 annually.
    
  • Any unused funds that are not reallocated will be added to the cap for the following year. For example, if $2 million in funds gets returned and is not reallocated, the program's cap will be $252 million for the following year.
    
• Support for vulnerable students continues 
  • Up to $7,500 for students attending schools for the homeless
  • Full tuition (up to $7,500) for schools where 90%+ of students are low-income (250% above the poverty line or less)

• Private school accountability
  • The accrediting association definition has been revised to include:
    • A recognized legal entity that meets the accreditation requirements set by the State Board of Education (member of OPSAC)
    • Another accrediting association approved by the State Board of Education, or OPSAC.
    • A legal entity that accredits education organizations in multiple states, whose purpose is to verify that an education program meets or exceeds predetermined criteria, and monitor the education organization during the time it is accredited by completing regular reevaluations and on-site inspections of the education program.
    • An eligible and participating private school as of April 15, 2025, shall have until March 1, 2027, to meet the new accreditation requirements if they don't already.
  • Private schools must submit enrollment and tuition data for the preceding school year by June 15 annually.

What To Do Next?

We're here for you. Please remember that YOU are your child’s most important advocate! The OPSA Parent Services team is here to help you every step of the way. If you would like more individualized assistance, please reach out to our team at parents@okpsaedu.org.

Disclaimer

The materials available on this website are for informational purposes only and not to provide legal advice. You should contact your attorney or tax professional to obtain legal or tax advice concerning any particular issue or problem. Click the following link to access information from the Oklahoma Tax Commission regarding the Parental Choice Tax Credit.