One goal is to help parents buy better technology to aid in teaching students in the home, said the Eagle Mountain Republican.
Elaine Augustine, who home-schools her children, said the $500 would be helpful.
"There are so many things I would love to have enough money to spend on my children's education, especially in science because those materials are very expensive," Augustin said. "I think it would improve the quality of our children's education."
Parents are not eligible for the rebate if their children are also enrolled in a public school. The bill would expire after five years and lawmakers then would conduct a study to see if the tax credit was effective.
The proposal was originally slated to cost $3 million and would have provided $500 for each child being home-schooled, but Lifferth said the amended version of the bill should cost around half that amount.
Mark Mickelsen with the Utah Education Association said either amount is problematic.
"This is an amount we can hardly afford to lose at a time when we're struggling to restore funding lost during the Great Recession and trying to fund a new technology initiative which has been introduced this week," Mickelsen said.
Matt Ogle, who also home-schools his children, opposes the bill because it would take money away from the already underfunded public school system. He said at a previous committee meeting that he teaches his children at home because of the state's low education funding.
"This [bill] would be akin to a person getting a tax credit because they want to own guns because they don't think the police department does a good job," Ogle said.
Rep. Jim Nielson, R-Bountiful, asked why the credit is non-refundable and only available to those who make enough money to pay taxes.
"One of the, in my mind, perverse aspects of this bill is that it will subsidize those that are better off and not those that are worse off. That's a big concern," Nielson said.
Connor Boyack, president of the LIbertas Institute said the bill does not subsidize home schooling, but gives families back some of the money they pay toward public education through income tax. He said he should not have to pay for public schools before paying to educate his own children at home.
"This is not meant to incentivize behavior and it's not meant to necessarily assist people. It's meant to establish fairness and if people with low income are not paying any money there is not any money for them to get back," Boyak said.
Rep. Joel Briscoe, D-Salt Lake City, said home schooling can be a good thing, but it is out of reach for many because of their financial situation.
"It's a heck of a class size ratio one parent to x number of children," Briscoe said.