Quick answer: The Education Freedom Tax Credit is the federal scholarship tax credit under Section 25F of the tax code, created by the Educational Choice for Children Act. Starting in tax year 2027, individuals who give cash to a listed scholarship granting organization (SGO) can claim a nonrefundable credit of up to $1,700, or $3,400 for married couples filing jointly. The money funds K-12 scholarships for students in households at or below 300% of area median income.
Question | Answer |
Official name | Education Freedom Tax Credit (Section 25F); created by the Educational Choice for Children Act |
Effective | Tax year 2027 |
Credit amount | Up to $1,700 per individual; $3,400 for married couples filing jointly |
Refundable? | No. Unused credit carries forward for up to five years |
Who can claim it | Individual taxpayers only. Corporations cannot claim it |
Eligible contributions | Cash only. No stock or cryptocurrency |
Who receives scholarships | K-12 students in households at or below 300% of area median income, living in the state where the SGO is listed |
Participating states | 30 states as of October 1, 2026. Minnesota has declined |
Cap on total credits | None. Treasury projects roughly $26 billion a year in contributions by 2030 |
Source: Treasury and IRS proposed regulations, October 2026.