Academic Spending Requirement – updated for 2026-27 school year

Parents will be required to spend at least $500 of scholarship funds per student per school year for school tuition and/or curriculum and tutoring in these core academic subject areas to remain eligible and renew:

• Math
• Science 
• English/Language Arts
• Social Studies

For the 2026-27 school year, foreign language will remain an allowable expense but will not count toward the Academic Spending Requirement.

The Academic Spending Requirement Chart contains more details about expenses that count toward the spending requirement.

Art & Music Tutoring Services

Beginning fall 2026, families may use ESA+ scholarship funds to pay for art and music tutoring services offered by enrolled providers. Eligible services include lessons, classes, and camps that support student learning in these approved service areas:

• Visual Arts: painting, drawing, sculpture, and photography
• Performing Arts: dance, theater, and technical theater
• Music: private or group music lessons

ESA+ funds may only be used for teaching and tutoring services—families cannot use these funds for art or music products, supplies, or curricula.

Art and Music Tutoring Services will be allowable expenses but will not count toward the Academic Spending Requirement.

Paying for Summer Activities with ESA+ Funds

ESA+ expenses for the current school year must be submitted prior to the third week of June, when ClassWallet closes for the school year. Once ClassWallet reopens in July, families cannot pay for services that took place prior to July 1st.

Families may:

• prepay for summer expenses through August 31

OR

• pay for July and August services once ClassWallet reopens (with rollover funds or their new school year funds, once those are available for fall)

Rollover of Funds

The ESA+ program limits the amount of ESA+ remaining funds that can roll over from a student’s current school year account to the next school year. The student’s award level determines whether the remaining funds can be rolled over.

If a student has received the higher award amount ($17,000), the parent can roll over funds from one school year to the next. The ESA+ Program does not allow remaining funds to be rolled over from one school year to the next school year if the student has received the base award ($9,000); any remaining funds are returned to the SEAA.

If the student has received the higher award amount ($17,000), the parent may roll over up to $4,500 of any remaining funds from the student’s current year award to the next school year. However, the total balance in the student’s account may not exceed $30,000.

ESA+ families may only use scholarship funds for current-year expenses, and this also applies to rollover funds (parents may not use rollover funds to pay expenses from a previous school year).

The Parent Agreement

The Parent Agreement contains important information about parent responsibilities, including:

• Compliance with Program Requirements
• Enrollment in an Eligible School
• Local Education Agency Release
• Enrollment Changes
• Minimum Spending Requirement
• Allowable Expenses
• Prohibited Expenses 
• Proper Use of Scholarship Funds
• Testing Requirement
• Access to Records
• Non-Compliance with Program Rules
• Termination of Agreement

The Local Education Agency Release

Children who are placed full time in a nonpublic school or a home school by their parents do not have a right to receive all the special education services that they would receive if enrolled in a public school.

Parents of students who receive the ESA+ scholarship must agree to “release” public school special education services for the period the student receives ESA+ scholarship funds. This is called the Local Education Agency (LEA) Release.

Only parents of ESA+ students who attend a nonpublic school or a home school full time need to sign the LEA Release. Visit ESA+ Resources to view a reference copy of the LEA Release.

Tax Implications

Certain payments made on behalf of students participating in the ESA+ Program are reportable transactions for purposes of IRS information return reporting. SEAA reports ESA+ payments to the IRS as required.

SEAA Tax Implication Obligations

• SEAA reports any ESA+ scholarship funds parents spend on allowable expenses other than tuition and required fees to the IRS on Form 1099-G.
• In January, only those funds parents spent in the prior calendar year are reported on Form 1099-G by SEAA.
• Parents should consult a tax professional on how to address information reported on Form 1099-G in their tax return.
• North Carolina allows parents to deduct ESA+ funds reported on Form 1099-G from adjusted gross income for North Carolina income tax purposes on a Form D400 (in Schedule S, Part B, Line 13 entitled “Other deductions from federal adjusted gross income”), ONLY if those ESA+ funds were included in the federal adjusted gross income on their federal tax return.

For more information, visit the Tax Implications document in ESA+ Resources.

This document is not intended to provide and should not be relied upon for tax or accounting advice. Please consult your tax or accounting professional for advice and guidance on specific tax-related matters.