Questions people ask about the Federal Scholarship Tax Credit

How much is the Federal Scholarship Tax Credit?

Up to $1,700 per person, per year.

You get a federal tax credit equal to 100% of your cash donation to a qualified Scholarship Granting Organization, capped at $1,700. A married couple filing jointly may be able to claim up to $3,400 if each spouse donates $1,700, but that rule comes from proposed regulations and is not yet final.

When does the program start?

January 1, 2027.

Qualifying donations can be made starting January 1, 2027. Donors claim the credit for the first time when they file their 2027 tax returns in 2028. Scholarship organizations can begin awarding scholarships in early 2027.

Who can donate and claim the credit?

Any individual taxpayer with federal income tax liability.

There is no income cap on the donor side. Corporations cannot claim it. You do not need to live in a participating state to donate. You can give to a qualified SGO in any state that opted in.

Is it really dollar for dollar?

Only up to the tax you actually owe.

The credit is nonrefundable. If you owe $1,000 in federal income tax and donate $1,700, your credit is $1,000. The remaining $700 carries forward for up to five years. Donating never puts money in your pocket. At best, you break even.

Who can receive a scholarship?

K-12 students in participating states from households at or below 300% of area median income.

The student must be eligible to enroll in a public elementary or secondary school. The income test uses HUD county-level median income figures and is not adjusted for household size. Roughly 9 in 10 households meet it. Children in foster care and families on programs like SNAP qualify automatically.

Has my state opted in?

Thirty states had opted in as of September 2026, per the IRS.

Each state decides annually whether to participate. See the full list of participating states. Remember: donors can give to an SGO in any participating state regardless of where they live. Only scholarship recipients need to live in an opted-in state.

Can I donate to my own child's scholarship?

No.

Donors cannot earmark contributions for a specific named student. Not your own child, not anyone else's. The SGO decides who receives scholarships within the federal rules.

What can the scholarship money be used for?

Tuition, tutoring, books, and many K-12 education expenses.

Qualified expenses include private school tuition and fees, tutoring, special needs services, books, supplies, equipment, computers, internet access, and extended-day programs. Students in public school can use scholarships for extra costs like tutoring. Uniforms, transportation, and room and board only qualify if the school requires or provides them.

How do I claim the credit on my taxes?

Donate to a qualified SGO, get a written acknowledgment, and claim the credit when you file.

Proposed regulation

The proposed rules describe a new tax form and a donor identification number system for claiming the credit. The details could change before the rules are final. Talk to a tax professional about your specific situation.

Where can I find a qualified SGO?

There is no official list yet.

States must submit their lists of qualified SGOs to the IRS by February 15, 2027. Until then, any directory you see is incomplete. Be skeptical of anyone claiming to have the definitive list.

Is this site affiliated with the government?

No.

This is an independent resource. We are not affiliated with the IRS, the Treasury Department, or the Department of Education. We cite official sources throughout, and we link to them so you can verify everything yourself.