The Education Freedom Tax Credit
A federal tax credit for gifts to K-12 scholarship organizations, starting in 2027
Beginning January 1, 2027, you can claim a federal tax credit for a cash gift to a Scholarship Granting Organization (SGO) on a state's list, once that state has filed its election and submitted the list. SGOs are nonprofits that give K-12 scholarships, such as private-school tuition, to students from families earning up to 300% of their area's median income. A credit comes straight off the tax you owe.
The basics
- How much
- Up to $1,700 per taxpayer ($1,700 single, $3,400 married filing jointly)
- Unused credit
- The credit can lower your tax to zero but will not produce a refund. Any amount you cannot use carries forward for up to five years.
- Which SGOs
- The SGO must be on the approved list of a state that has opted in. 32 states had opted in as of November 9, 2026. You do not need to live in that state.
- State credits
- If the same gift also earns a state tax credit, the federal credit is reduced by the amount of the state credit.
- The gift
- It must be cash, and it cannot be set aside for a particular student. The part of the gift that earns the credit cannot also be deducted.
An example
The credit is up to $1,700 per taxpayer ($1,700 single, $3,400 married filing jointly). For one taxpayer, you give $1,700 to an SGO on a participating state's list. If you claim no state credit for that gift, your federal credit can be the full $1,700. If the same gift also earns you a $1,000 state credit, your federal credit is $700.
Before you give
- Check that the SGO is on a participating state's list for 2027.
- Ask the SGO how it will issue your receipt for the federal credit.
- If you also give for a state credit, decide with your advisor which gift claims which credit.
- Give on or after January 1, 2027, and keep the SGO's receipt with your tax records.
Each state's status is listed at sgolist.com/education-freedom-tax-credit.