South Dakota Partners in Education Tax Credit Program

The South Dakota Partners in Education Tax Credit Program provides tax incentives to licensed insurance companies to donate to a registered scholarship granting organization (SGO). Insurance companies that owe South Dakota’s insurance premium and annuity tax may contribute to a registered SGO and claim a 100% state tax credit. That organization awards K-12 scholarships to income-eligible students at accredited private schools. Individual taxpayers cannot claim it.

Program Type: Tax-credit scholarship, not an ESA or voucher

Authorization: SDCL chapter 13-65, enacted 2016, expanded by SB 84 in 2026

Administered By: The SD Division of Insurance registers the organizations. South Dakota Partners in Education (SDPE) is the only registered one, so it runs the program in practice.

Who Can Apply:

• South Dakota residents in grades K-12
• Prior-year household income no more than 200% of the reduced-price-lunch standard. For a household of four in 2026-27 that ceiling is $122,100
• Families reapplying after three years may earn up to 250%
• A child in foster care qualifies regardless of income, awarded at the free-lunch level

Where You Can Use It: A private school, or a tribally controlled school on a federally recognized reservation in South Dakota, accredited by the SD Department of Education and partnered with SDPE. Homeschools and microschools do not qualify, and a school is never required to admit a recipient.

Scholarship Amount: There is no published award table. State law caps the average of an organization’s scholarships at the state’s per student equivalent, not the amount any one student receives. The average award was $2,457 in 2025-26. Awards are tiered by income, are larger for high school students, and can never exceed your school’s published tuition and fees. You pay the rest.

What It Covers: Tuition first, then books sold through the school, registration, testing, and other published fees such as graduation, yearbook, and field trips. Not after-school care.

How to Apply:

1. Read the Parent Handbook, then apply through TADS, uploading income documentation and paying a fee your school may cover
2. Get your application to “GOOD” status. Only applications at that rating are awarded
3. Enroll at a partner school. SDPE mails one check per student to the school, made out to you, and you endorse it there in person. Missing that deadline can forfeit the scholarship

Application Timing: The 2026-27 window opened January 26, 2026, with new students needing “GOOD” status by May 31. Returning students are funded first; new applicants follow first-come, first-served by the date they reached GOOD. Reapply in your fourth year, when a new sibling becomes eligible, and on entering 9th grade for the higher high school awards.

Program Scale: 1,783 scholarships at 48 schools in 2025-26, under a statewide credit cap of $5 million a year.

Important Limitations:

• The $5 million cap limits awards, so a scholarship is not guaranteed
• No transportation is provided or reimbursed
• Recipients must take norm-referenced or statewide assessments
• A third expulsion permanently ends eligibility, and expulsion for a violent event revokes it immediately

Where to Start:

• SDPE for Families, 605.679.0112
• Participating schools directory