Donor guide
Federal Scholarship Tax Credit
Give to a K-12 scholarship fund and claim a federal tax credit of up to $1,700 per person, or up to $3,400 for married couples filing jointly. Gifts qualify beginning January 1, 2027. Be ready on day one.
Last updated October 20, 2026
The Credit at a Glance
The Federal Scholarship Tax Credit, also called the Education Freedom Tax Credit (EFTC), lowers your federal tax bill dollar for dollar. It is nonrefundable, and unused credit carries forward up to five years.
- Up to $1,700per individual
- Up to $3,400married filing jointly
- Jan 1, 2027gifts qualify beginning
- 5 yearsunused credit carries forward
Sources: IRS IR-2026-117 (opens in a new tab), Treasury EFTC FAQ (opens in a new tab)
Tax benefits of donating
Dollar for dollar, a qualifying gift lowers your federal tax bill while helping fund K-12 scholarships for eligible students.
Simple to claim
No itemizing required. Give, keep your acknowledgement, and claim the credit on your federal return.
Be ready early
Gifts qualify beginning January 1, 2027. Sign up now and we will tell you the day gifts open.
Backed by official guidance
This page follows IRS and Treasury guidance and links to every source so you can check for yourself.
How Do Tax Credits Work?
Three steps. Give to an eligible scholarship granting organization (SGO), keep your acknowledgement, and claim the credit on your federal return.
Step 1: Give to an eligible SGO
Make a cash gift to an SGO on the IRS list and tell them it should qualify. Digital assets do not count.
Step 2: Keep your acknowledgement
Your SGO sends your unique donor number by January 31 of the next year. Keep it with your tax records.
Step 3: Claim the credit
Claim the credit on your federal return with your donor number. Gifts made in 2027 go on your 2027 return.
Want the full walkthrough? Read how to give and claim the Education Freedom Tax Credit.
Credit vs. Deduction
A deduction lowers the income you are taxed on. A credit lowers your tax bill itself, dollar for dollar. No itemizing required. A gift cannot count toward both the credit and a charitable deduction.
Will I owe enough tax to use it?
The credit cannot exceed your federal tax, but unused credit carries forward up to five years. Use the calculator to estimate yours.
What if my state also has a credit?
A state tax credit claimed for the same gift reduces the amount eligible for the federal credit.
Estimate Your Credit
Estimate your credit
Answer three quick questions to see how much of your federal tax you could direct to scholarships. Your answers are not saved.
Open the calculatorYour Donor Timeline
Key dates from now through your first filing. Based on Treasury and IRS guidance as of October 2026. Dates may change.
Now: Learn and sign up
Estimate your credit and sign up to be notified the day gifts open. No payment or commitment.
January 1, 2027: Gifts open
Gifts qualify beginning January 1, 2027. States submit opt-in elections by that date and SGO lists by February 15.
January 31, 2028: Acknowledgement
Your SGO sends your acknowledgement and donor number.
2028 filing season: Claim
Claim your 2027 credit on your federal return. Unused credit carries forward up to five years.
Which States Are Participating?
The IRS lists 30 participating states as of September 14, 2026. You can give to an SGO in any participating state, no matter where you live.
- Participating (30)
- Not on the IRS list
View the states as a list
- Alabama
- Alaska
- Arkansas
- Colorado
- Florida
- Georgia
- Idaho
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Virginia
- West Virginia
- Wyoming
Source: IRS, participating states for 2027, as of Sept 14, 2026.
My state isn't on the list
You can still give to an SGO in a participating state and claim the federal credit. Scholarships go to students in states where the SGO is listed.
Choose a Scholarship Fund
Your gift goes to a scholarship granting organization, not directly to a student. Confirm the organization is on the IRS list of qualifying SGOs before you give.
Questions to ask any SGO
Are you on the IRS list? How do I get my acknowledgement and donor number? How much of each gift goes to scholarships?
Browse the scholarship fund options on our home page.
Donor Resource Catalog
Official sources, tools and guides in one place, so you can understand the credit before you give.
Official sources
- IRS: Federal Scholarship Tax Credit and participating states (opens in a new tab)
- IRS news release IR-2026-117 (opens in a new tab)
- Treasury press release (opens in a new tab)
- Treasury and Education Department FAQ (PDF) (opens in a new tab)
- Proposed regulations (Federal Register) (opens in a new tab)
- Temporary regulations for states and SGOs (opens in a new tab)
Tools and guides
FAQ
Frequently Asked Questions
The Federal Scholarship Tax Credit (FSTC), also called the Education Freedom Tax Credit (EFTC), is a federal credit under section 25F for cash gifts to eligible scholarship-granting organizations that fund K-12 scholarships. It applies to taxable years ending after December 31, 2026, and gifts qualify beginning January 1, 2027.
Up to $1,700 per individual, or up to $3,400 for married couples filing jointly, for qualified cash gifts in a year. Under the proposed rules, each spouse on a joint return has a $1,700 cap. The credit is nonrefundable, so it cannot exceed your federal tax, and unused credit carries forward up to five years.
No. You do not need to itemize deductions to claim the credit. A gift claimed for the credit cannot also be deducted as a charitable contribution. Talk with a tax professional about how this applies to your return.
Yes. You can give to an SGO in any participating state, regardless of where you live. Scholarships serve students who live in states where the SGO is listed, so your state's decision affects where scholarships can go, but it does not stop you from giving to an SGO in a participating state.
Under the proposed rules, the gift must be cash, including checks, electronic transfers, and after-tax payroll deductions. Digital assets do not count. You must designate the gift as a qualified contribution when you give, and any goods or services you receive in return reduce the qualified amount.
No. Donors cannot earmark a gift for a specific student. You can share a preference for a type of fund, but that is an expression of interest, and the SGO makes the final scholarship decisions under its own rules and the law.
Check the IRS list of qualifying SGOs before you give, and tell the organization your gift is meant to qualify. You can generally rely on the IRS list at the time of your gift. Keep the acknowledgement your SGO sends, which includes your unique donor number.
Gifts qualify beginning January 1, 2027. Your SGO sends an acknowledgement with your unique donor number by January 31 of the following year. Gifts made in 2027 are claimed on your 2027 return, generally filed in 2028. These dates come from Treasury and IRS guidance and may change.
Under the proposed rules, students must be eligible to enroll in a public elementary or secondary school, with household income no more than 300% of the area median gross income. Treasury estimates about 96% of children in participating states would be eligible. Final rules may differ.
No. Treasury and the IRS issued proposed regulations on October 1, 2026, with a public hearing scheduled for December 15, 2026. Rules may change before they are final. Taxpayers may rely on the proposed rules if they follow them fully.
Yes. Married couples filing jointly can claim up to $3,400, which is $1,700 per spouse under the proposed rules. Your total credit still cannot exceed your joint federal tax.
Under the proposed rules, after-tax payroll deductions count as cash gifts. Ask your employer whether it offers payroll giving to an eligible SGO, and keep the acknowledgement your SGO sends.
Give cash to an organization on the IRS list of qualifying SGOs and tell it your gift is meant to qualify. Your SGO then sends an acknowledgement with your unique donor number.
The credit cannot exceed your federal tax, but unused credit carries forward up to five years. Use the calculator to estimate how much you could use.
Be ready on January 1.
Leave your email and we'll let you know the day the federal credit opens. No payment today.