On October 1, the Treasury Department issued proposed rules for the new federal scholarship tax credit (FSTC). That same day, I wrote about how I and others had misinterpreted the implications of the Treasury’s incorporation of a definition of school from the Coverdell ESA law, which defines qualified expenses for the FSTC.
The proposed rules state, “The term school has the definition set forth in section 530(b)(3)(B) and any guidance issued thereunder.” The referenced law says, “The term ‘school’ means any school which provides elementary education or secondary education (kindergarten through grade 12), as determined under State law.” Most observers have taken this to mean homeschoolers in states that don’t define it as a school would not be eligible.