NC H344

Creates an individual income tax credit for children with disabilities requiring special education, allowing taxpayers to claim up to $3,000 per semester for tuition and special education services at nonpublic schools or public schools charging tuition.

Establishes eligibility requirements including that the child must have a documented disability, require an individualized education program, receive special education or related services daily, and have been enrolled in public school for the preceding semester.

Reduces the credit proportionally for any semester the child spent time enrolled in public school and disqualifies credits for children placed in nonpublic school at public expense, 22 years or older, graduated, or enrolled full-time in postsecondary education.

Creates the Fund for Special Education and Related Services under the State Board of Education, funded by transferring $2,000 multiplied by the number of credits claimed annually from individual income tax collections to support special education services and reevaluation costs.

Requires the Department of Revenue to report to legislative committees by October 1, 2013 on credit administration, including the number and amount of credits claimed and any compliance concerns.