States

The Federal Scholarship Tax Credit in Nebraska

Last updated: October 2026. Federal regulations are proposed, not final.

How Nebraska opted in

On September 29, 2025, Governor Jim Pillen signed Executive Order 25-14, making Nebraska the first state in the country to opt into the Federal Scholarship Tax Credit. He announced it at St. Teresa Catholic School in Lincoln, joined by Representatives Adrian Smith and Mike Flood.

No legislation was needed. The governor acted alone, and the Nebraska Department of Revenue confirms the state has made its advance election for 2027.

The backstory: voters killed the state program

Nebraska's relationship with school choice is complicated. In 2023, the legislature created a state scholarship tax credit (LB 753). In 2024, lawmakers replaced it with a $10 million program run through the State Treasurer (LB 1402). Then in November 2024, Nebraska voters repealed LB 1402 by a 57-43 margin.

An effort to revive a state credit (LB 509) died in committee. A budget fight over a $3.5 million bridge appropriation ended with the money stripped out.

The result: Nebraska currently has no state school choice program. The federal credit is the only vehicle available. For donors, that means there is no state credit to offset, which simplifies the math.

Income limits for Nebraska families

Students qualify if household income is at or below 300% of the area median income, and the student is eligible to enroll in a Nebraska public K-12 school. Based on HUD FY2026 data for a four-person household:

Estimates based on HUD FY2026 income data. The IRS has not published official 2027 figures, and the income calculation method comes from proposed federal regulations, not final rules.

For Nebraska families: how to use it

The program goes live January 1, 2027. Families apply directly to a scholarship organization, not to the state. Scholarships can cover tuition, tutoring, books, technology, and special-needs services at public, private, or religious schools.

Students who received scholarships in a prior year get priority for renewal, followed by their siblings.

One open question: homeschool eligibility is not yet resolved. Nebraska homeschools are classified as exempt private schools, and Treasury has not issued final guidance on how they fit.

For Nebraska donors: how to give

Starting January 1, 2027, donate cash to a scholarship organization on Nebraska's IRS list and claim a dollar-for-dollar federal tax credit of up to $1,700 per person ($3,400 for married couples filing jointly, under proposed rules). The credit is nonrefundable. Unused amounts carry forward up to five years.

You cannot claim a charitable deduction on the same gift. You cannot direct your donation to your own child or any specific student.

Only donations to organizations on Nebraska's official list qualify. That list is due to the IRS by February 15, 2027. Do not donate in 2026 expecting the credit.

Scholarship organizations in Nebraska

Only one organization has publicly announced plans to serve as a federal SGO in Nebraska:

• Opportunity Scholarships of Nebraska. A 501(c)(3) endorsed by all three Catholic dioceses in Nebraska. It awarded thousands of scholarships under the former LB 753 program and has announced it will serve as a federal SGO starting January 1, 2027.

Two other organizations operated as SGOs under the old state program but have not announced federal plans. Under federal rules, Nebraska cannot pick and choose. Any organization that meets the requirements must be included on the state's list.

Who runs this in Nebraska

The Nebraska Department of Revenue is the certifying agency. It has published a page confirming the state's participation and says it is reviewing the October 2026 federal regulations before establishing the SGO certification process. No application forms are available yet.

Contact: Julie Schuur, 402-471-1445. The department also offers an email subscription list for updates on SGO certification.

Key dates

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