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Middle-Income Family. Mr. and Mrs. John-

from their church, they discover that it actual-

son have two children, Jack and Jill, and a family

ly runs a scholarship program to help parents

income of $58,000. They live in a state that

choose a school. The church established its

spends $10,000 per student in the government

own scholarship organization a few years back

system. Because their income is more than 1.5

by filing an application with the state, an easy

times the Free or Reduced-Price Lunch Program

process since it was already a registered non-

but less than 3 times that limit, they can use

profit. The Smiths get some pamphlets the

Public Education Tax Credits worth 50 percent

next Sunday and set up an appointment with

of government school per-student spending,

an administrator to talk about their options.

which means $5,000 for Jack and $5,000 for Jill

At the meeting, Sue, from the church's

(the child credit cap).

scholarship organization, explains the pro-

During the summer, the Johnsons made a

gram and gets them started. The Smiths have a

tough decision. Their daughter Jill is doing

small state sales tax credit that they can claim

well at the government school she's assigned

for education expenses. But that only comes to

to, but Jack is really struggling. They know Jack

about $500 for the year. They are going to need

needs to go to a school that has more structure

a lot of help to get Joe into a better school.

and discipline but don't know how they can

Sue tells the Smiths that they can use up to

pay for tuition at Maple Middle School, a

$8,000 total under the tax credit program. Of

school they know has done wonders with a boy

that amount, they can get $7,500 in scholar-

who used to play soccer with Jack.

ships and claim the remaining $500 in credits

Mrs. Johnson remembers reading some-

from their own tax liability. Sue says that the

thing in the newspaper about a state program

church will be happy to give Joe scholarship

that gives parents a tax break to help pay for

money to go to a good school, but she reminds

education expenses, just like their mortgage

them to ask relatives if they can help out too.

tax deduction helps them with house pay-

She explains that Joe's grandparents or uncle,

ments. Mrs. Johnson calls Maple Middle

or even a family friend or employer, can help

School to ask about applying to the school and

pay and claim tax credits for Joe's education

to find out more about the education tax

expenses (thanks to the credit, their contribu-

break. She sets up a meeting for the next week.

tions may cost them little or nothing).

In the meantime, Mrs. Johnson looks at the

Sue gives the Smiths a few forms and helps

Public Education Tax Credit information web-

fill them out. She also gives them a list of

site the man at the school recommended.

schools in their area to ask around about. Then

The Johnsons find that they can claim a

she sets up another meeting so they can see

sizeable amount of money in tax credits.

how much scholarship money Joe will need to

Between their property taxes that fund local

go to the school his parents choose.

schools, sales taxes, and income taxes, they

At their next meeting, the Smiths tell Sue

can claim $2,000. Mrs. Johnson also finds out

that Apple Elementary looked great, and that

that her employer has an employee donation

Joe's grandparents filled out their form to

policy and will pay $2,500 for each child of

claim $1,000 in tax credits on their taxes that

every employee--because they can adjust their

year and write a check to the school. Since

tax payments and claim a tax credit for the

Apple Elementary costs $3,000, Sue files the

donation, it only costs them a little paper-

church scholarship application for $1,500,

work. Also, Mr. and Mrs. Johnson discover

along with a $500 loan that will let Mr. and

they can adjust their state income tax with-

Mrs. Smith pay their share up front, and tells

holding according to the state sales and

them that they will have their confirmation

income tax credits they will claim at the end

letter in a week. The Smiths file their applica-

of the year. That way they won't have to pay

tion with Apple Elementary and hear back in

everything out-of-pocket before they file their

a few weeks that Joe has been accepted for the

return.

fall.

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