High-Quality Charter Schools Act

Key Points

• The bill creates a new federal tax credit equal to 75% of charitable donations made to eligible charter school organizations. This credit directly reduces a person's tax bill, making it more valuable than a standard charitable deduction.
• Only high-performing charter schools and their management organizations qualify. They must have received a federal expansion grant or be ranked in the top 10% of charter schools for student performance in their state.
• Individual donors can claim a credit up to $5,000 or 10% of their adjusted gross income, whichever is higher. Any unused credit can be carried forward for up to five years.
• The program caps total credits at $5 billion per year nationwide. Each state gets at least $10 million in credits, with the rest available first-come, first-served. If 90% of the national cap is used, it automatically increases by 5% the next year.
• Charter school organizations must spend the donated funds within five years and get annual audits from independent accountants. If they fail to meet spending requirements, future donations to them lose credit eligibility.
• The bill explicitly protects the independence of participating charter schools, stating they are not acting on behalf of the government and should have maximum freedom to serve students without governmental control.