Education Freedom Tax Credit in Tennessee
Tennessee has opted in. Beginning January 1, 2027, Tennesseans can give up to $1,700 ($3,400 for married couples) to a qualifying scholarship group and get it back as a federal credit.
Is Tennessee Participating?
Yes. Tennessee has opted in and appears on the IRS list of participating states for 2027. That means qualifying Tennessee scholarship granting organizations can receive gifts that earn donors a federal tax credit starting January 1.
- Tennesseeis on the IRS list
- Up to $1,700Per individual
- Up to $3,400Married filing jointly
- Jan. 1, 2027Gifts qualify beginning
Sources: IRS participating states page (opens in a new tab), Treasury EFTC FAQ (opens in a new tab)
Where you can give
Give to any approved scholarship granting organization on a participating state's IRS list, including Tennessee organizations, no matter where you live.
Your federal credit
A dollar-for-dollar credit of up to $1,700 per person, or $3,400 on a joint return. It is nonrefundable, and unused credit carries forward up to five years.
Tennessee state taxes
Tennessee does not tax wages and has no state credit for these gifts, so there is nothing that reduces your federal credit.
Where scholarships go
Scholarships go to eligible students who live in Tennessee, for qualified K-12 expenses such as tuition, tutoring, special education services, books, and supplies.
How Tennessee's Participation Works
Tennessee opted in with an advance election. Next comes a list of approved scholarship groups, which the IRS publishes before gifts qualify for the credit.
States opt in
Governor Lee opted Tennessee in, and the state is on the IRS list. This is a federal program Congress already authorized, and a new governor does not change that.
States list their SGOs
Tennessee is collecting interest from groups that want to be on its list.
The IRS publishes the list
The IRS posts the final list, and donors should confirm a group is on it before giving.
What It Means for Tennessee Students
Tennessee students from eligible households may receive scholarships funded by gifts to approved organizations beginning in 2027.
Who may be eligible
Students who could enroll in a Tennessee public school and live in a household earning no more than 300 percent of the area median income may qualify. Treasury estimates about 95 percent of children meet the income limit.
How scholarships are awarded
Each organization sets its own application and award process. Eligibility does not guarantee a scholarship, so families should contact approved organizations directly.
Estimate Your Credit
Enter your filing status and planned gift to see your potential federal credit. The credit is dollar for dollar, capped at $1,700 per person.
Try the credit calculator
See how much of your federal tax you could redirect to scholarships. It takes about 20 seconds.
Estimate your creditYour Tennessee Timeline
Here are the dates that matter for Tennessee donors and families, from today through your 2028 tax filing.
Now: Learn and sign up
Learn how the credit works and sign up to be notified when gifts open.
January 1, 2027: Gifts open
Qualified cash gifts to approved Tennessee organizations can begin earning the federal credit.
February 15, 2027: SGO lists due
Tennessee submits its approved scholarship organizations to the IRS.
2028 filing season: Claim
File Form 8525 with your 2027 return, using your donor number.
Tennessee Scholarship Granting Organizations
Scholarship granting organizations are nonprofits that collect gifts and award scholarships. Tennessee organizations must be listed by the state and the IRS before gifts qualify for the credit.
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?
Tennessee SGO list
Tennessee is collecting interest from groups that want to be on its list. We will add approved Tennessee organizations here once the list is published.
New to SGOs? Read What Is an SGO? or follow a gift in How a Scholarship Donation Reaches a Student.
Donor Resource Catalog
Official sources, tools, and guides for Tennessee donors.
Official sources
IRS Federal Scholarship Tax Credit page (opens in a new tab)
IRS announcement (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 (opens in a new tab)
Temporary regulations (opens in a new tab)Tools
Guides
How to give and claim
Credit vs. deduction
What is an SGO?
How a donation reaches a student
See all participating statesFor tax professionals
Form 8525 and donor acknowledgement guidance for client gifts is covered in How to give and claim.
More state pages are added as they go live. Start with the state guide.
Be Ready on January 1
Tennessee is in. Sign up now and we will notify you the moment gifts open on January 1, 2027.
Notify me when it opensThis page is general information, not tax advice. Consult a tax professional about your situation.
Tennessee FAQs
Yes. Tennessee has opted in and is on the IRS list of participating states for 2027. Gifts to approved Tennessee organizations qualify for the federal credit beginning January 1, 2027.
Yes. You can give to any approved organization on a participating state's IRS list, regardless of where you live. Scholarships funded by your gift go to eligible students in that organization's state.
Up to $1,700 per person, or $3,400 for married couples filing jointly, for qualified cash gifts. Each spouse claims based on their own gifts.
No. The credit is claimed on your federal return and does not require itemizing. You cannot also deduct the portion of a gift used for the credit.
No. Tennessee has no state credit for these gifts. Only state credits claimed for the same gift reduce the federal credit, so your full $1,700 limit applies.
Yes, since Tennessee has opted in. Donors in any state can give, but gift money goes only to families in opted-in states. Eligible Tennessee students may receive these scholarships once approved Tennessee organizations are in place. Students must be able to enroll in public school and meet the household income limit.
Check the IRS list of approved organizations once Tennessee submits its list by February 15, 2027. Confirm the organization is listed before you give, and keep its written acknowledgement.
Not yet. Treasury released proposed and temporary regulations in October 2026. You may rely on the proposed rules for 2027 gifts if you follow them in full, but final rules may change.
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