Enrollment Verification Problems Delay Start of Private School Tax Credit

Families wanting to apply for a new private school income tax credit of up to $7,500 per child will have to wait a little longer.

The Oklahoma Tax Commission said late Thursday it was delaying acceptance of applications after several schools had problems getting enrollment verification forms to parents and guardians. The portal was supposed to open at 8:30 a.m. Friday.

The opening for the Parental Choice Tax Credit will now be delayed until 2 p.m. Dec. 6, the Tax Commission said.

“The decision to delay the application start date was not made lightly,” the agency said in a written statement. “Despite being disappointed with the delay, we believe this adjustment is necessary to establish a ‘fair playing field’ for all taxpayers, since having the Enrollment Verification Form is a required part of the application process.”

Parents who encountered problems in recent days said they had turned in enrollment forms to their schools, which in turn had trouble uploading the verification documents to the website operated by a thirdparty vendor, Merit International Inc.

The tax credit is offered on a first-come, first-served basis, with priority given to families with household incomes of $150,000 and below. The credit steps down at higher income levels, with households with income over $250,000 eligible for $5,000 tax credits per child. The median household income in Oklahoma is $57,000, according to the U.S. Census Bureau.

THE LATEST Because of the delay, a 60-day priority period for families with household incomes of $150,000 or less will extend to Feb. 5, 2024.

Lawmakers put a $150 million cap on the program for tax year 2024. That will rise to $200 million in 2025 and $250 million in 2026.

Gov. Kevin Stitt, who taped a video for social media touting the program’s opening this week, said his office was notified about the delays and discussed it with House and Senate leaders. His preference was to push forward with the original timeline, but he understood the need for the delay.

“It was the Tax Commission’s call on that,” Stitt said in a brief interview Friday “There were a few schools that for whatever reason there was a technical error on getting that information back out to their parents. Most schools across the state, most parents had all the information to apply on Dec. 1, but I think I heard there were about 4,500 parents that did not have it.”

Stitt, who has three children in private schools, said his family plans to take advantage of the income tax credit. Stitt, and his wife, Sarah, also have three older children.

“I think my wife was planning to fill out the form,” Stitt said. “Everybody knows what my salary is as the state of Oklahoma governor. Every bit helps. There’s caps on it, where we’re going to prioritize it with the $75,000 and $150,000 (income levels) all in one bucket. But we’re all anxious to find out how many people are out there, how many people sign up for it, and also how many new schools are started, which I’m real excited to see.”

More than 140 private schools across the state had registered to be eligible for the tax credit as of Friday afternoon, according to the parental choice tax credit website.

As lawmakers were formulating the policy this year, the Tax Commission expressed its concerns with the implementation of the law. The agency estimated it would take about $1 million to set up the program in the first year.

The Tax Commission voted in September to sign a one-year, $3.95 million contract with Merit to administer the tax credit program. It said it went with a private vendor because of the compressed timeline for implementation.

An agency spokeswoman said it was too soon to measure demand for the private school tax credits or share data about the website traffic and a call center set up to answer questions.

“Given the strong interest we have experienced from schools and taxpayers in the program, we continue to focus on ensuring that both the school and taxpayer experiences are transparent and fair,” Tax Commission spokeswoman Emily Haxton said in an email.

Senate President Pro Tempore Greg Treat, R-Oklahoma City, said he was frustrated with the delay.

“While I am agitated that the enrollment has been delayed, it is important to get it right to ensure fairness for all Oklahoma children looking to get the best education possible,”Treat said in a written statement on Friday. “While everyone knew undertaking a project of this size and magnitude would have different challenges, the Tax Commission must do whatever they can to provide parents and their children the best path forward.”