The Treasury Department and the IRS are seeking feedback on the implementation of a new federal tax credit scholarship program under the One Big Beautiful Bill Act designed to support school choice initiatives and students with education-related expenses.
This new credit applies to contributions to scholarship granting organizations (SGOs) that serve elementary and secondary school students from low- and middle-income families.
The OBBBA established a new tax credit scholarship program that is primarily intended to assist K-12 students with the cost of attending private schools but also includes additional types of educational expenses. Participation in the program is left to each state’s discretion.
Beginning Jan. 1, 2027, individual taxpayers can claim a nonrefundable federal tax credit under Section 25F of the Internal Revenue Code for cash contributions to SGOs providing scholarships for elementary and secondary education expenses. The credit allowed to any taxpayer is limited to $1,700. Learn more.