The UTTC begins at 10 percent of the average state and local per-pupil revenue and grows to 50 percent of this amount.86 The maximum credit of 50 percent of the average per-pupil public school revenue establishes a credit which, when fully implemented, will approximate the average alternative school tuition.
The amount of the credit is also limited to 80 percent of the actual tuition paid. This provision provides incentive, similar to a co-payment with a medical insurance policy, for the purchaser to exercise care. It provides downward pressure on the price of tuition, even if the tuition tax credit is enough to cover their childrens tuition.
There is an exception to the 80 percent limit, however. A credit of 100 percent of actual tuition paid may be claimed for children in families whose income is below the federal poverty level, subject to the same overall limit of 50 percent of the average per-pupil public school revenue. The proportion of students in this category is small and does not affect substantially the cost of the proposal. The rationale for the inclusion of this provision is to give additional support to parents whose children are in the poorest areas and are in most need of aid.