HB1026
To Create The Arkansas Promise Act; And To Create An Income Tax Credit For Tuition Paid For An Eligible Student At A Public Institution Of Higher Education.
AI-Generated Summary
This bill, titled the "Arkansas Promise Act," proposes the creation of an income tax credit for tuition paid to public institutions of higher education in Arkansas. The credit is intended to assist taxpayers with the cost of tuition for eligible students. To qualify, the student must be an Arkansas resident with in-state tuition classification. The student must have completed the Free Application for Federal Student Aid (FAFSA) and have an adjusted gross income of up to $90,000. The student must be pursuing a certificate, associate degree, or bachelor's degree. Eligibility also requires initial enrollment within two years of high school graduation or equivalency, with fewer than 65 accumulated credit hours prior to enrollment. Furthermore, students must complete at least six credit hours per semester and maintain a GPA of 2.5 or higher. The credit can be claimed for a maximum of four consecutive academic semesters. If the credit exceeds the taxpayer's tax liability, the excess will be refunded.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries of this bill would be resident Arkansas taxpayers who pay tuition for their dependents or themselves to attend public two-year or four-year institutions of higher education. This includes parents, guardians, or students themselves who meet the specified eligibility criteria. Students who are pursuing degrees or credentials, have a moderate adjusted gross income, enroll relatively soon after high school, and maintain satisfactory academic progress would also directly benefit from the reduced financial burden on their education.
Who Might Suffer?
The state of Arkansas, specifically its tax revenue, would be negatively impacted by the implementation of this bill. The creation of a new income tax credit, especially one that can be refunded, will reduce the overall tax collections. While the bill aims to provide financial relief to certain taxpayers, the state budget will experience a decrease in revenue as a direct result of these tax credits being claimed and refunded. This could potentially necessitate adjustments in state spending or revenue-generating strategies to compensate for the loss.