Indiana homeschool tax credit: What families should know

As a homeschooling parent, you put both heart and resources into your child’s education. The cost of curriculum, supplies, and extra learning tools can feel like it adds up overnight. Indiana’s homeschool tax deduction offers a simple way to ease some of that financial pressure.

We’ll break down how it works, who can claim it, and what steps to take so you’re ready. And as you plan ahead, you can lean on Outschool’s affordable live classes to complement your homeschool program in ways that inspire and support your child’s growth.

What is Indiana’s Private School/Homeschool Deduction program?

In Indiana, parents who homeschool can get a little extra help come tax season. Thanks to the state’s Private School/Homeschool Deduction, families can claim qualified education expenses on their state tax return, helping offset the cost of core learning materials and instruction.

Taking advantage of this program can make a real difference over time. Even if the savings feel small, they can add up, especially for families with more than one child learning at home.

What other education tax credits are available in Indiana?

Indiana also offers a School Scholarship Tax Credit for individuals and corporations that donate to approved Scholarship-Granting Organizations (SGOs). These donations help fund private school scholarships, and donors receive a 50% tax credit. 

While this program helps many families access private education, it doesn’t apply to homeschoolers, as funds must be used for tuition at approved private schools.

Who qualifies for the Private School/Homeschool Deduction program?

Not every family will be eligible to claim Indiana’s Private School/Homeschool Deduction, so it’s helpful to check that you meet the main requirements before filing. Here’s what to keep in mind:

• Parent or guardian status: You must be the parent, legal guardian, or court-appointed custodian of the homeschooled child. To claim the deduction, you also need to claim your child as a dependent on your federal and state tax returns.
• Student requirements:
  • Your child must be homeschooled during the tax year.
  • They must be eligible to receive a free K–12 education in an Indiana public school district.
• Residency: You must have been an Indiana resident during the year you paid the qualifying expenses.
• Income limit: There is no income cap. Families at any income level may qualify for this deduction if all other criteria are met.
• Minimum spending: There’s no minimum amount you need to spend in order to claim the deduction. However, only expenses that were actually paid out-of-pocket (and not reimbursed) can be used..

What kinds of expenses count?

Once you know you qualify for Indiana’s homeschool deduction, the next step is understanding which expenses actually make the cut. The state focuses on academic-related costs that directly support your child’s learning at home. These often include:

• Curriculum and textbooks used as part of your homeschool teaching
• Workbooks, worksheets, and printed materials that are used up during lessons
• Academic supplies like notebooks, rulers, or calculators used primarily for schoolwork
• Online programs or software that teach core subjects
• Fees for tutoring or classes that reinforce required academic instruction
• Instructional program fees that go along with your curriculum

These expenses must be paid out-of-pocket by you and not reimbursed by scholarships, grants, or other programs.

How much can you claim?

Let’s break down what the Indiana Private School/Homeschool Deduction can mean for your family at tax time:

• You’re allowed to deduct up to $1,000 per qualifying child.
• Your deduction is based on actual educational costs.
• This deduction helps by reducing your taxable income, not giving a direct refund.

So while it may not cover every dollar you spend, it’s still a smart way to make homeschooling a bit more affordable.

How to claim Indiana’s homeschool tax deduction

Filing for Indiana’s homeschool deduction is simple once you know what to expect. The key is tracking your qualified expenses throughout the year and being ready to fill out the right forms at tax time.

Here’s what to do:

1. Track your qualified purchases: Save receipts for textbooks, curriculum, tutoring, and supplies used for academic instruction. Make sure your records clearly match the deduction’s rules.
2. Use the correct forms: File Schedule 2 along with your IT-40 return. On Schedule 2, report the deduction using code 626 under “Other Deductions.”
3. Enter $1,000 per eligible child: You can deduct up to $1,000 per dependent student who qualifies.
4. Be ready to show proof: You don’t need to attach receipts to your return, but keep them in case of a future audit or verification request.

Taking a few extra minutes to stay organized now can save you time and stress later. If you’re ever unsure about what qualifies or how to file, a quick conversation with a tax professional can help you stay on track.

Frequently asked questions (FAQs)

Here are answers to some common questions families in Indiana often ask when navigating the homeschool tax deduction program.

Do I need to file paperwork to prove I homeschool in Indiana?

Indiana doesn’t require homeschool families to register with the state or file any formal paperwork to be eligible for the deduction. However, you do need to keep good records of your qualified expenses in case they’re ever requested by the Department of Revenue.

Can I claim the Private School/Homeschool Deduction for each of my homeschooled children?

Absolutely. The $1,000 deduction applies per qualifying child, so if you have multiple children who meet the criteria, you can claim the deduction for each one individually.

Are digital curriculum and online classes eligible for the Private School/Homeschool Deduction?

Yes, digital materials like online courses, downloadable workbooks, and educational software can count, as long as they’re used for core academic instruction. Just be sure your receipts clearly show how these resources fit into your homeschool program.

What happens if I receive a grant or reimbursement for homeschool expenses?

If any of your homeschool costs are covered by another program, you cannot claim those reimbursed amounts as part of your deduction. Only unreimbursed expenses paid directly by you qualify.

How do I make sure I don’t lose this deduction in an audit?

Keep receipts and documentation for every qualifying expense. Make sure each one shows the date, what was purchased, how much it cost, and that it was used for academic instruction. You don’t need to submit this with your return, but it’s smart to have it ready just in case.

Smart support for your homeschool budget

Homeschooling in Indiana gives you the freedom to shape how your child learns. And thanks to the state’s tax deduction, you may be able to keep a bit more of what you spend along the way. By knowing what qualifies and keeping good records, you’ll be set up to take full advantage of the benefit.

To get even more from your efforts, consider adding support from Outschool. We can help make the most of your homeschool plan with flexible classes that add variety and depth to your core subjects. From math to music, it’s all about learning that supports your goals and keeps your child motivated.