Individual donors make contributions to qualified SGOs. In return, they receive a dollar for dollar federal tax credit. Qualified SGOs then award scholarships to eligible K–12 students for qualified educational expenses.

Governors of each state, or the individual or entity designated by state law, voluntarily decide if the federal scholarship tax credit law can take effect in their respective state, known as the “opt-in” provision. If a state opts in, it is required to provide an annual list to the U.S. Department of the Treasury of qualified SGOs operating in their state that meet the requirements of the federal law. Once listed, the SGO may receive qualified contributions from a taxpayer who in turn can receive the federal income tax credit. This guidance has not been released by the U.S. Department of the Treasury and is forthcoming in 2026.

Students from households earning up to 300% median family income as determined by HUD are eligible.

Scholarships can be used for private, public and charter schools including school tuition and fees, tutoring, curriculum, special education services, and other qualified education expenses as allowed by existing Coverdell Savings Accounts under federal law.

Governors of each state, or the individual or entity designated by state law, are required to provide an annual list to the U.S. Department of the Treasury of qualified SGOs operating in their state, once designated they are eligible to receive tax-credited donations. This guidance has not been released by the U.S. Department of the Treasury and is forthcoming in 2026.

The scholarship award amount is determined by the SGO.

Donors receive a dollar-for-dollar, non-refundable federal tax credit.

Eligible donors may claim a non-refundable credit of up to $1,700 per year against their federal individual income taxes for contributions to qualified SGOs.

This guidance has not been released by the U.S. Department of the Treasury and is forthcoming in 2026.