The Nstein tax desk
Federal Scholarship Tax Credit Begins in 2027
Learn when the federal scholarship contribution credit starts, how state participation works, and why it does not apply to 2026 donations.
This is a 2027 contribution credit
The Federal Scholarship Tax Credit begins January 1, 2027. Qualified cash contributions may qualify for a nonrefundable credit of up to $1,700 per taxpayer. Contributions made in 2026 do not qualify for this credit.
A donation is different from paying tuition
The credit concerns qualifying contributions to Scholarship Granting Organizations (SGOs). It is not a blanket credit for a parent's yeshiva or private-school tuition payment, and it does not guarantee a scholarship for the donor's child.
Verify the state and the organization
Participation requires a state election and an approved SGO list for the applicable year. Do not assume a school's nonprofit status makes it an eligible SGO. Check current IRS program information and the organization's status before contributing. This guide does not certify any state or organization.
Plan carefully
The credit is nonrefundable and subject to eligibility rules. Do not assume every gift has zero after-tax cost or claim both a credit and charitable deduction for the same contribution. Discuss the planned gift before donating and keep the acknowledgment.