WASHINGTON, D.C. — Twenty-seven states have elected to participate in a new federal scholarship tax credit program created under the One Big Beautiful Bill Act, allowing eligible taxpayers to receive a federal tax credit of up to $1,700 for donations supporting private K-12 scholarships.
The Internal Revenue Service said the Federal Scholarship Tax Credit program is now available in participating states that have formally opted into the initiative and submitted qualified Scholarship Granting Organizations, or SGOs, for approval.
The program creates a new federal tax incentive for contributions that help fund scholarships covering eligible elementary and secondary education expenses. Participation by states is voluntary, creating a patchwork of availability across the country.
Taxpayers seeking to claim the credit must contribute to a qualified SGO located in a participating state. The IRS is responsible for maintaining the official list of eligible states and approved scholarship organizations.
IRS Chief Executive Officer Frank Bisignano said the agency expects additional states may join the program.
“It’s encouraging to see that 27 states have already signed up to participate in this program that promotes and supports elementary and secondary education,” Bisignano said.
The participating states currently include Alabama, Alaska, Arkansas, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Louisiana, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia and Wyoming.
The rollout represents one of the first major implementation steps for the education-related tax provisions enacted under the One Big Beautiful Bill Act. Supporters argue the credit expands educational choice by encouraging private contributions to scholarship programs, while critics of similar initiatives have historically raised concerns about the diversion of resources from traditional public education systems.
The IRS said it will continue updating the list of participating states as additional jurisdictions complete the election process and submit qualified scholarship organizations for certification.
Current eligibility information and program guidance are available through IRS resources dedicated to the Federal Scholarship Tax Credit program and Section 25F of the Internal Revenue Code on IRS.gov.
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