Program names
Is it the Education Freedom Tax Credit or the Federal Scholarship Tax Credit?
Last updated: October 2026
They are the same program. The new federal tax credit for donations to K-12 scholarship organizations goes by several different names depending on who is talking about it. This page sorts them out.
The four names
Education Freedom Tax Credit (EFTC)
The common name used by supporters of the program and in news coverage. The IRS itself describes the credit as "commonly known as the Education Freedom Tax Credit" in its October 2026 announcement.
Federal Scholarship Tax Credit (FSTC)
The name used by the IRS and the Treasury Department in official guidance. The IRS program page is titled "Federal Scholarship Tax Credit (FSTC)." In tax documents and IRS publications, this is the name that appears.
Educational Choice for Children Act (ECCA)
The name of a standalone bill introduced in the 119th Congress (H.R.833). That bill was not enacted on its own. The credit that became law was enacted as Section 70411 of Public Law 119-21 and was modeled on the ECCA proposal. People still use the ECCA name interchangeably, but the enacted law is the One Big Beautiful Bill Act, signed July 4, 2025.
Section 25F
The section of the Internal Revenue Code that creates the credit. The IRS program page identifies it as "Internal Revenue Code Section 25F." Tax professionals and legal documents refer to it this way.
Key facts, whatever you call it
- Up to $1,700 per person per year in federal tax credits for cash donations to qualified scholarship granting organizations (26 U.S.C. 25F(b)(1)).
- Under the proposed regulations, married couples filing jointly may be able to claim up to $3,400. This comes from proposed regulations (REG-117199-25), not final regulations, and the rule is not yet settled.
- The credit applies to taxable years ending after December 31, 2026, which means donations starting January 1, 2027.
- Students qualify if they are eligible to enroll in a public elementary or secondary school and their household income does not exceed 300 percent of area median gross income (26 U.S.C. 25F(c)(2)). The statute cross-references the area median income definition in Internal Revenue Code Section 42, which uses HUD-published figures. Specific dollar thresholds vary by location and are estimates until the IRS publishes official numbers.
- Scholarships are only available in states that have elected to participate. The statute allows the election to be made by the governor or by another individual, agency, or entity designated under state law (26 U.S.C. 25F(g)(1)(B)).
Regulatory status
On October 1, 2026, Treasury and the IRS issued proposed regulations (REG-117199-25) along with companion temporary regulations (T.D. 10057). Final regulations have not been issued. Rules described as coming from the proposed regulations may change before they are finalized.
Sources
- IRS: Federal Scholarship Tax Credit (FSTC) program page (accessed October 4, 2026)
- IRS Newsroom IR-2026-117 (Oct. 1, 2026): Treasury and IRS issue proposed regulations (accessed October 4, 2026)
- 26 U.S.C. Section 25F (statute text) (accessed October 4, 2026)
- Federal Register: Proposed Rule REG-117199-25 (published Oct. 2, 2026) (accessed October 4, 2026)
- Congress.gov: H.R.1, 119th Congress (became Public Law 119-21 on July 4, 2025) (accessed October 4, 2026)
- Congress.gov: H.R.833, Educational Choice for Children Act of 2025 (119th Congress) (accessed October 4, 2026)