Congressman Pete Hoekstra (R–Michigan) has introduced a new bill that would establish a tax credit for contributions to public and/or private elementary and secondary schools, and Education Investment Organizations (EIOs). The bill would also permit distributions to be made to home school students via contributions to EIOs.

H.R. 282, titled the "Education Freedom Act," would authorize a credit of up to $250 for an individual, $500 in the case of a joint return, and $50,000 for corporations.

The credit would be earned through "qualified charitable contributions" to any of the following:

• Public elementary or secondary schools
• Private elementary or secondary schools, both non-sectarian and religious
• Education Investment Organizations

Contributors may claim 50% of their qualifying contributions as a credit, to the maximum limits cited above. Special conditions apply if the same contributions are claimed as a state credit, and contributions for which a credit is taken will not also be allowed as deductions.

If the proposed bill becomes law, the credit would go into effect as of the 2004–2006 tax year.

Stay tuned as CAPSO updates the progress of this bill!