This bill establishes a new income tax credit for teachers in Oklahoma who have completed eight consecutive years of service in a school district. Starting from the tax year 2027, certified teachers who meet this requirement will be eligible for a credit of $10,000 against their state income tax. To maintain eligibility for this credit, teachers must continue teaching in the same school district for an additional three years. However, exceptions are made for those who become unemployed due to a reduction in force, death, or documented medical hardship.

The bill also grants the Oklahoma Tax Commission the authority to conduct audits to verify the eligibility of taxpayers claiming this credit. If a taxpayer is found to be ineligible after an audit, the Commission is required to recapture the credits. Additionally, if the credit amount exceeds the taxpayer's tax liability, the excess will be refunded. The act is set to take effect on November 1, 2026.