What does Preamble of High-Quality Charter Schools Act do?

This bill proposes to amend the Internal Revenue Code of 1986. The proposed amendment would allow a tax credit for charitable donations. These donations would be specifically for the creation or expansion of charter schools.

What does SHORT TITLE. of High-Quality Charter Schools Act do?

This bill is formally titled the High-Quality Charter Schools Act.

What does TAX CREDIT FOR CONTRIBUTIONS TO ELIGIBLE CHARTER SCHOOL of High-Quality Charter Schools Act do?

This section amends the Internal Revenue Code to create a new tax credit for contributions to eligible charter school organizations. The credit allows a 75% credit against tax for qualified contributions made by U.S. citizens or residents. The credit is capped at $5,000 or 10% of the taxpayer's adjusted gross income, whichever is greater. Eligible charter school organizations must be 501(c)(3) organizations, charter management organizations, or charter schools that meet specific criteria related to grant funding or state performance rankings. These organizations must also maintain separate accounting for contributions, obtain annual audits, and certify completion of those audits to the Secretary. Qualified contributions are defined as cash or marketable securities made for the creation or expansion of charter schools. Contributions taken into account for the credit cannot be used as charitable contributions for purposes of section 170. Any unused credit may be carried forward to the succeeding taxable year, but not beyond the fifth year after the credit arose. The application of this credit is subject to a volume cap established under the High-Quality Charter Schools Act.

What does FAILURE OF ELIGIBLE CHARTER SCHOOL ORGANIZATION TO MAKE of High-Quality Charter Schools Act do?

This section amends the Internal Revenue Code of 1986 by adding a new subchapter, 'Eligible Charter School Organizations,' under Chapter 42. It establishes a requirement that eligible charter school organizations must expend a certain amount of qualified contributions before an expenditure deadline. If an organization fails to meet this requirement, contributions made in the following year will not be treated as qualified contributions for purposes of section 25F. The 'required expenditure amount' is generally 100% of qualified contributions, adjusted for reasonable administrative expenses and any carryover from the previous year. A 'safe harbor' allows administrative expenses up to 10% of total qualified contributions to be considered reasonable if related to charter school creation or expansion. Organizations can carry over up to 15% of qualified contributions to the succeeding taxable year. The 'expenditure deadline' is the first day of the fifth taxable year following the year the contributions were received. The term 'expenditures' includes formally committed amounts, even if not yet spent.

What does VOLUME CAP. of High-Quality Charter Schools Act do?

This section establishes a volume cap of $5,000,000,000 for tax credits under section 25F of the Internal Revenue Code of 1986, beginning in calendar year 2026. Initially, $10,000,000 in tax credits are allocated to each state, available for individuals residing in that state to claim credits for qualified contributions. Any unallocated state allotments are added to the pool available for all individuals. If the Secretary determines that 90% or more of the nationwide volume cap is utilized, the cap increases by 5% of the amount available as of January 1 of the following year. The volume cap is applied on a first-come, first-served basis, based on the date of the qualified contribution. The Secretary is required to develop a real-time system to track qualified contributions for credit claims.

What does ORGANIZATIONAL AND PARENTAL AUTONOMY. of High-Quality Charter Schools Act do?

This section establishes a prohibition on regarding eligible charter school organizations as acting on behalf of governmental entities due to participation in this Act. The Act aims to allow eligible charter school organizations maximum freedom to provide for student needs without governmental control, to the extent permissible by law. The definitions of 'charter school' and 'eligible charter school organization' are derived from section 25F(c) of the Internal Revenue Code of 1986.

What does EFFECTIVE DATE. of High-Quality Charter Schools Act do?

This section establishes the effective date for amendments made by this Act.

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High-Quality Charter Schools Act

Last updated: 4/9/2025 · Introduced: 4/9/2025

Author: Claudia Tenney (R-NY)

TL;DR (AI)

This bill creates a new tax credit of up to 75% (capped at $5,000 or 10% of adjusted gross income) for donations to eligible charter school organizations to support their creation or expansion.
Eligible charter school organizations must expend a significant portion of these contributions within five years or risk losing the tax credit benefit for subsequent donations.
A $5 billion volume cap is established for the total amount of tax credits issued annually, with initial allocations to each state and potential increases based on utilization.

119th Congressin committeeS. 1813(In Committee)Official page

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Includes provisions on preamble, short title., and 5 more.

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