Program Overview

South Dakota’s Partners in Education Tax Credit Program was enacted in 2016, launched in 2016, and began providing scholarships in 2016–17. This program provides tax credits to insurance companies who donate to the non-profit Scholarship Granting Organization (SGO), which then provide private school scholarships to students who meet the income requirements. Learn more about the program’s funding, eligibility, and rules on this page.

Program Fast Facts

  • The nation’s 21st tax-credit scholarship program
  • 1,671 students participating (2023–24)
  • 45 schools participating (2023–24)
  • Average scholarship value: $1,972 (2023–24)
  • South Dakota Partners in Education is the Scholarship Granting Organization (SGO)

Program Participation

Program Details

South Dakota’s Partners in Education Tax Credit Program offers tax credits to insurance companies that donate to South Dakota Partners in Education, which provides private school scholarships to eligible students. Click the + symbols to learn more about this program’s details.

The average value of all scholarships awarded by an SGO may be worth up to 82.5 percent of the state’s share of the per student equivalent (PSE) ($6,700 in 2022–23). Scholarships may be used for tuition and fees at qualifying schools.

Students are eligible if they live in families with incomes up to, but not exceeding, 150 percent of the federal free and reduced-price lunch (FRL) program.

Once a student has received a scholarship, that student remains eligible for three years or, if the student is entering high school, until high school graduation. After the initial period of income eligibility, scholarship students remain eligible if their family income in the prior year does not exceed 200 percent of the FRL program.

  • Income Limit: 150 percent x FRL
  • Geographic Limit: Statewide
  • Enrollment Cap: None
  • Scholarship Cap: 82.5% of State’s annual share of the per student equivalent (PSE)
  • Testing Mandates: State or National
  • Tax Credit Value: 100%
  • Total Credit Cap: Yes
  • Budget Cap: $5.0 million
  • Use at least 90 percent of contributions for scholarships
  • Use all revenue from interest or investments for scholarships
  • Carry forward no more than 25 percent of its revenue from contributions from one fiscal year to another
  • Ensure scholarships are portable during the school year and can be used at any qualified school that accepts the eligible student
  • Verify annually that schools that accept scholarship students are accredited by the state department of education
  • Provide a state approved receipt to companies for contributions made
  • Notify the state of its intent to provide scholarships
  • Provide to the state proof of 501(c)(3) status
  • Conduct background checks on employees and board members
  • Submit annually to the state:
    • Data on contributing companies
    • Data on accepted contributions
    • Data on scholarships awarded and funded, including the amount awarded to students who qualify for the FRL program and the percentage of first-time scholarship recipients who were enrolled in a public school the previous year
    • Financial audit performed by a certified public accountant

S.D. Codified Laws §§ 13-65-1 through 12