Education Freedom Tax Credit by State
See which states have opted in to the Education Freedom Tax Credit, also called the Federal Scholarship Tax Credit (FSTC), for 2027. Wherever you live, you can give to a scholarship fund in a participating state and claim up to $1,700, or up to $3,400 for married couples filing jointly.
Does My State Have to Participate?
No. You can give to an eligible scholarship granting organization (SGO) in any participating state, no matter where you live, and still claim the full federal credit on your return. The Education Freedom Tax Credit is a federal program. Your home state's decision only determines where scholarship dollars can be used by students, not whether you as a donor can participate.
Put simply: if you live in California but give to an SGO in Alabama, you claim the credit on your federal return. California's status does not block you.
- 30States on the IRS list as of Oct. 22, 2026
- $1,700Maximum credit per individual
- $3,400Maximum credit married filing jointly
Sources: IRS news release IR-2026-117 (opens in a new tab), Treasury EFTC FAQ (opens in a new tab)
The key distinction donors often miss: where you live determines where students can receive scholarships. It does not determine where you can give. Any U.S. donor can give to any SGO in any participating state and claim the federal credit.
Where you live
Your home state's opt-in status does not affect your ability to claim the federal credit. Donors in all 50 states can participate.
Where scholarships go
Scholarship funds serve students in the state where the SGO is listed. A non-participating state means students there cannot currently benefit from this program.
The federal credit
Up to $1,700 per individual, or up to $3,400 for married couples filing jointly, as a dollar-for-dollar reduction of your federal tax.
Your state credit
Some participating states also offer a state-level tax credit. Claiming a state credit for the same gift reduces the amount eligible for the federal credit.
How State Participation Works
Each state decides whether to opt in to the Education Freedom Tax Credit. Here is how it works, and why this list can change.
The governor submits an opt-in election
A state's governor must notify the Treasury Department that the state elects to participate. States must submit by January 1, 2027.
The state submits its SGO list
Participating states must submit their list of qualifying scholarship granting organizations to the IRS by February 15, 2027. Only SGOs on that list qualify for the credit.
The IRS publishes the combined list
The IRS compiles and publishes the list of participating states and qualifying SGOs. This page reflects the IRS list as of October 22, 2026.
Donors can give and claim the credit
Once a state and its SGOs appear on the IRS list, donors anywhere in the country can give to those SGOs and claim the federal credit on their 2027 return.
What if my state is not on the list?
You can still give to an SGO in any participating state and claim the full federal credit. See the giving options for non-participating states below.
Giving From a State That Has Not Opted In
Donors who live in a state that has not opted in can still give to a qualifying scholarship granting organization (SGO) in a participating state and claim up to $1,700, or up to $3,400 for married couples filing jointly, starting January 1, 2027. Choose an SGO in a participating state and claim the federal credit on your return. Your state's decision does not stop you from claiming it.
Give to an out-of-state SGO
Pick any qualifying SGO in a participating state. Your gift counts for the federal credit no matter where you live. Scholarships funded by your gift will serve students in that state.
Advocate in your state
Contact your governor's office to ask that your state opt in. The deadline for states to submit an election is January 1, 2027, so there is still time before gifts open.
What to look for in an out-of-state SGO: choose an organization with a track record, published scholarship criteria, and a clear process for issuing donor acknowledgements. Your acknowledgement letter with your unique donor number is what you file with your tax return.
Calculate Your Credit
The Education Freedom Tax Credit reduces your federal tax liability dollar-for-dollar, up to the limits set by the legislation. Use our calculator to estimate how much you could save based on your filing status and the amount you plan to give.
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 Credit Calculator- $1,700Max credit per individual
- $3,400Max credit for married filing jointly
Key Dates and Deadlines
The Education Freedom Tax Credit is new, and several deadlines govern when states and SGOs can get on the list. Here is what to track.
Oct. 22, 2026: 30 States on the List
Thirty states appear on the participating list as of this date. The states and SGOs shown on this page reflect that list.
Jan. 1, 2027: State Opt-In Deadline
States must notify Treasury by this date to be included. Governors in states not yet participating can still submit before this deadline.
Feb. 15, 2027: SGO List Submission Deadline
Participating states must submit their qualifying SGO lists to the IRS by this date. Only SGOs on the submitted list qualify for the credit.
2027: Donors Give and Claim the Credit
Gifts made in 2027 to qualifying SGOs are eligible for the credit on your 2027 federal tax return. The credit is non-refundable and cannot exceed your federal tax liability.
This page is updated as new information becomes available. State participation may change before the January 2027 deadline. Check back for updates or sign up for alerts.
States That Have Opted In
Thirty states submitted an opt-in notification to the Treasury Department and appear on the IRS list as of October 22, 2026. Donors can give to qualifying SGOs in any of these states, no matter where they live, and claim the federal Education Freedom Tax Credit on their return. Select a state on the map or use the list below to explore state-specific details.
Each green state has at least one qualifying SGO on the IRS list. The gray states have not yet opted in. Students in those states cannot currently receive scholarships funded through this program, but donors from those states can still give to participating states.
- Participating (30)
- Not on the IRS list
View the states as a list
Source: IRS, participating states for 2027, as of Oct 22, 2026.
How we keep this current
We monitor the IRS-published list and update this page when states are added. The IRS can update the list at any time as additional governors submit opt-in notifications. If you notice an error, let us know.
States Not Participating
The following states have not yet opted in to the Education Freedom Tax Credit program as of October 22, 2026. The deadline for governors to submit an opt-in election is January 1, 2027.
- Arizona
- California
- Connecticut
- Delaware
- Washington, DC
- Hawaii
- Illinois
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- New Jersey
- New Mexico
- New York
- Oregon
- Pennsylvania
- Rhode Island
- Vermont
- Washington
- Wisconsin
Donors who live in any of these states can still give to a qualifying SGO in a participating state and claim up to $1,700, or up to $3,400 for married couples filing jointly, starting January 1, 2027. See giving options for donors in non-participating states.
Official Sources and Further Reading
Everything on this page draws from primary government sources. Use the links below to verify details or read the full text.
Primary government sources
- IRS News Release IR-2026-117: Education Freedom Tax Credit list (opens in a new tab)
- Treasury Department EFTC Frequently Asked Questions (PDF) (opens in a new tab)
- IRS: Education Freedom Tax Credit overview (opens in a new tab)
Guides on this site
Frequently Asked Questions
Yes. You can give to an SGO in any participating state, regardless of where you live. Scholarships serve students 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.
Yes, if you give to an SGO in a participating state. You claim up to $1,700 per individual, or up to $3,400 for married couples filing jointly. The credit is nonrefundable and cannot exceed your federal tax.
The IRS lists 30 states as of October 22, 2026. The list can change as states opt in, so check this page for updates.
Scholarships serve students who live in states where the SGO is listed. A gift does not automatically stay in your home state.
Yes. You can give to an SGO in any participating state, no matter where you live.
Check the IRS list of qualifying SGOs before you give. States submit their lists by February 15, 2027, so it may still be updating when gifts open.
Yes. A state tax credit claimed for the same gift reduces the amount eligible for the federal credit. Ask a tax professional how both apply to your return.
States must submit their opt-in elections by January 1, 2027, and their SGO lists by February 15, 2027. Dates may change.
We move it to the participating list and add its state page. Check back or sign up for updates.
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.
On the IRS federal scholarship tax credit page (opens in a new tab), linked in the resource catalog above.
Yes. Alabama's existing state credit is covered on its own page.
No. This is the federal credit. A state program may work differently, so check your state page.
Yes. Leave your email below and we will let you know the day gifts open.
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