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The proposal would authorize a 100 percent credit for contributions to any state-sanctioned scholarship fund, meaning donors could get back their entire donation through their federal taxes, said a senior Education Department official, who spoke to reporters on the condition of anonymity ahead of the formal announcement. The maximum credit would be set at 10 percent of an individual's adjusted gross income, or 5 percent of a business's net taxable income.
Overall, the program would be capped at $5 billion a year, the official said. He said the department had been assured there were "multiple avenues" to make up the lost tax revenue but did not name any.
The announcement is planned for Thursday and will include DeVos, Sen. Ted Cruz, R-Texas and Rep. Bradley Byrne, R-Ala.
The idea for a similar federal tax credit was pushed in the first year of the administration as part of the broader overhaul of the tax code. But some conservatives opposed the idea, saying it could lead to increased federal control over private-school scholarshipprograms. At the same time, the overall thrust of the tax bill was simplifying the tax code, and this measure would do the opposite.
Meantime, many liberals regard the idea as a backdoor voucher and say available tax dollars should be used to support public schools.
The White House left this idea out of its tax blueprint for Congress, but President Donald Trump is expected to include it in his budget plan for next year.
The tax credits are meant to advance school choice without directly sending tax dollars to private schools. Already, more than a dozen states give residents tax breaks for making private donations to nonprofit scholarship programs.
The existing scholarship programs differ by state but generally give money to parents for expenses such as private school tuition, books, computers, tutors and transportation.
The federal program would mirror existing state efforts by giving a federal tax break for similar contributions. The senior department official said it would be up to each state to decide whether to create such a program, and if so, what it should cover. He added that Americans would be able to donate money to programs in any state, not just their home state.
The senior department official said taxpayers could not get both state and federal tax credits for the same donations.
DeVos has promoted school choice - an idea that includes private-school vouchers, home schooling and public charter schools - for many years. As education secretary, she has traveled the country to promote her views but has had little success winning support for new federal initiatives even with a Republican Congress.
It seems unlikely the new proposal will fare better in Congress now, with the House controlled by Democrats.
The White House considered including a mention of the proposal in the president's State of the Union speech, people familiar with the planning said. But he wound up making just a passing reference to the matter. Trump said the time had come to embrace school choice for American children.
The official White House transcript of the speech, however, suggested that Trump may have been referring to a specific proposal, by capitalizing certain words. The official transcript of his remarks read: "To help support working parents, the time has come to pass School Choice for Americans' children."
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