Private School Funding Options (Grades K-6)
Our goal at Lehi Montessori is to help each family cover tuition costs and not have to pay out of pocket. Each of our families should be able to fund their child's tuition using one of the following options or many other available:
- Education Savings Accounts
- 529 Plan
- School Scholarship
*A financial advisor may be beneficial in giving you more information on the best option for funding your child.
1. ESA Empowerment Scholarships
Now available to all Arizona K-12 students. For more information or to register Click Here
2. STO (School Tuition Organization)
School Choice Arizona Tops for Kids Arizona Tax Credit Institute for Better Education
A School Tuition Organization (STO) is one that is tax exempt under Section 501(c)(3) of the Internal Revenue Code and allocates at least 90% of its annual revenue to tuition awards and makes its tuition awards available to students from more than one qualified school.
There are two kinds of STO’s
Corporate Low-Income Scholarship
Private STO Donations
Corporate Low-Income Scholarship can be requested at any amount. It is best to apply for scholarships through multiple organizations to make sure you are fully funded. You can turn down any extra funds you receive if they are not needed.
To qualify for a Corporate Low-Income Scholarship, you must meet the following criteria:
Family Size Household Income
Private STO Donations
This could fund your student or other students who need scholarships. Whether you take advantage of this or not, it is helpful to others if everyone finds people who are willing to donate to our school. We would like to encourage all of our families to try to find at least one person to make an STO donation to our school. This will give more scholarship for others.
Individual Tax Credit.
A tax credit is an amount of money that taxpayers can subtract from taxes owed to their government. Unlike deductions and exemptions, which reduce the amount of taxable income, tax credits reduce the actual amount of tax owed.) The Individual tax credit program allows Arizona taxpayers to donate money to qualified STOs and receive a tax credit of up to $1,221 for married couples filing jointly or $611 for singles. A taxpayer may donate through April 15, and count their donation as a tax credit in the preceding tax year.
Overflow / Plus Tax Credit.
This tax credit was signed by Governor Jan Brewer in February 2012 and became effective in August 2012. The overflow tax credit is in addition to the Individual tax credit. A donor must first give the maximum toward the Individual tax credit, but then has the opportunity to give an additional $1,179 if married filing jointly or $680 for a single filer for tax year 2020. A Taxpayer may donate through April 15, 2020 and count their donations as a tax credit in the preceding tax year of 2020.
That's a total tax credit amount of $2,365 for married and $1,183 for single!
Recommendation Guidelines: You may recommend anyone who is not your child or dependent, but the selection committee retains complete discretion regarding all awards. There are no designations or guarantees. Parents cannot plan to donate to each other’s children; this is called swapping. The law states, “A taxpayer may not claim a tax credit if the taxpayer agrees to swap donations with another taxpayer to benefit either taxpayer’s own dependent.”
This means you need to go out and find donors. Reach out to family, coworkers, or perfect strangers. Some people have had good success putting some fliers in tax offices or posted on a Starbucks board. No one can talk up your child and the importance of a good education better than you!
Donors have no limit on the $$$ amount of the donation. However, if they are wanting to receive a dollar for dollar tax credit they will only receive a credit for what their tax liability is for that tax year. If a donor does donate more than their tax liability they do have five years to receive the dollar for dollar tax credit that they overpaid on their state tax returns.
3. Coverdell Education Savings Accounts
(used to be known as Education IRAs)
Coverdell ESAs are a federal program similar to 529 college savings plans. They offer tax-free growth for your investment and tax-free withdrawals. Unlike 529 plans, parents can use their Coverdell ESA funds to pay for certain K–12 educational expenses as well as college expenses.
Families must choose to open an account and contribute money out of their own pockets to accrue savings. The total maximum contribution per year for any single beneficiary is $2,000
Money must be used by age 30
Can be used for primary/secondary ed.
There are income restrictions
Contribution limit of $2,000 per child/yr
Non-qualified withdrawals are taxed
4. 529 Plan
Under the Tax Cuts and Jobs Act passed in December 2017, you are now allowed to take a qualified distribution of up to $10,000 per year for K–12 tuition at any public, private, or religious school from a 529 college savings plan.
5. FSA (A Dependent Care Flexible Spending Account)
Dependent care FSAs are set up through your workplace. Participants authorize their employers to withhold a specified amount from their paychecks each pay period and deposit the money in an account. Instead of using the FSA money to pay for expenses directly, you pay those costs out-of-pocket and then apply for reimbursement.
Once you have paid for expenses that qualify for reimbursement from the FSA you will need to complete a claim form provided by your employer and attach receipts or proof of payment with the form. The receipts must include specific information to prove that the payment was for qualified expenses. Specifically, the receipt must note:
Child's Name—the name of the person who received the service
Provider's Name—the provider that delivered the service
Date of Service—the date when services were provided
Type of Service— a detailed description of the service provided
Cost—the amount paid for the service4
The main benefit of an FSA is that the money set aside in the account is in pretax dollars, thus reducing the amount of our income subject to taxes. For someone in the 24% federal tax bracket, this income reduction means saving $240 in federal taxes for every $1,000 spent on dependent care with an FSA.
6. School Scholarship
If your child does not qualify for any of the above, scholarships can be applied for through the school.
Please contact us for more information on how to get funding for your child.