Official: Tennessee vouchers are federally taxable income

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UPDATE: Reversing course, Tennessee’s Department of Education says school vouchers won’t be taxable.

NASHVILLE, Tenn. (AP) — Tennessee’s education commissioner says the state’s new school vouchers for private education will be considered federally taxable income for parents.

After confirming the requirement to lawmakers Monday, Commissioner Penny Schwinn told reporters the attorney general’s office helped make the determination.

Schwinn said officials will have to examine the taxable income of families, given income limits to receive vouchers worth up to $7,300 annually.

Participating families cannot exceed twice the federal income eligibility for free school lunch.

The pro-voucher Tennessee Federation for Children disputes the tax interpretation.

The law says the vouchers “do not constitute income of a parent of a participating student” under Tennessee law. That doesn’t affect federal taxes.

Gov. Bill Lee’s administration hopes to begin the program next year. It’s limited to Shelby and Davidson counties.

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