Federal tax credit expands access to private school scholarships
Last year Congress permanently added an education freedom tax credit that lets each taxpayer claim up to $1,700 as a dollar-for-dollar credit for contributions to state-selected scholarship-granting organizations (SGOs). The program, active for the 2027-2028 year, uses private donations to fund private school scholarships, transport, or homeschool supplies depending on state rules, with eligibility set at or below 300 percent of local median income and SGOs expected to prioritize lower-income families. Most states have opted in; if the remaining 19 states and Washington join, 51.7 million children (91.7 percent of K-12) would be eligible.
Taxpayers can claim up to $1,700 credit for SGO donations.
Context
Congress added the credit to the tax code last year. Governors must decide whether their states will participate. If more states opt in, many more students would become eligible and donation amounts will matter next.
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