HB 242 Summary

• Establishes a nonrefundable tax credit for donations made to certified educational scholarship organizations that provide scholarships to low-income students attending chartered nonpublic schools.

• Creates the "educational scholarship organization" designation, requiring entities to be tax-exempt nonprofits under IRC 501(c)(3) that spend at least 90% of donations on scholarships and meet other accountability standards.

• Sets individual donation tax credits at $1,000 per person, $2,500 for joint filers, and $300,000 for businesses; allows credits to carry forward up to three years.

• Authorizes an annual total credit limit of $20 million for fiscal year 2012, increasing by 20% annually if the prior year limit was reached.

• Requires criminal background checks for educational scholarship organization employees and imposes audit requirements to ensure proper use of donated funds.