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 allows participating insurance companies to make approved tax-credit contributions to a nonprofit Scholarship Granting Organization, which uses those funds to provide private school tuition scholarships to students who meet the program 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
1,783 students served (2025–26)
48 schools participating (2025–26)

Average scholarship value: $2,457 (2025–26)
South Dakota Partners in Education is the Scholarship Granting Organization (SGO)

Program Participation

Program Details

South Dakota’s Insurance Premium Tax Credit Scholarship Program provides a 100 percent state insurance premium tax credit to participating insurance companies that make approved contributions to South Dakota Partners in Education. SDPE uses those tax-credit contributions to provide tuition scholarships to eligible students.

Student Funding

State law limits the average value of scholarships awarded by a Scholarship Granting Organization to the per student equivalent defined in SDCL 13-13-10.1. Individual awards depend on available funding, qualifying tuition and fees, and SDPE’s scholarship policies. Scholarships may be used for tuition and fees at qualifying schools.

Student Eligibility

An eligible student must reside in South Dakota while receiving the scholarship and meet the state program’s requirements. Initial household income eligibility is up to 200 percent of the income standard used to qualify for free or reduced-price lunch under the National School Lunch Program. Students in foster care may also qualify.

If sufficient funding is available, a student who meets the initial income requirement remains income eligible for three years or, if entering high school, until high school graduation, regardless of household income. After the initial eligibility period, state law permits continued eligibility when the prior year’s household income does not exceed 250 percent of that income standard. Awards remain subject to available funding and SDPE’s scholarship policies.

Rules and Regulations

Initial Income Limit: 200% of the free or reduced-price lunch income standard; students in foster care may also qualify.
Geographic Limit: Statewide
Enrollment Cap: None
Average Scholarship Limit: The per student equivalent defined in SDCL 13-13-10.1.
Testing Mandates: State or National
Tax Credit Value: 100%
Total Credit Cap: Yes
Statewide Annual Tax Credit Cap: $5.0 million

SGO Requirements

The following summarizes requirements for the state tax-credit program. General charitable gifts that receive no state tax credit are not subject to the same scholarship spending and carryforward requirements.

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

Governing Statutes

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