When January 1 hits, the Education Freedom Tax Credit will be available through the IRS.
Under the new program, individual donors can contribute up to $1,700 to a certified scholarship granting organization, or SGO, and receive a dollar-for-dollar tax credit on their federal tax return.
The SGOs then deliver those funds directly to families as tuition scholarships.
The scholarship opportunity was enacted by the Republican-led Congress in the One Big Beautiful Bill Act.
George Tryfiates is a vice president at the Association of Christian Schools International. He told “Washington Watch” the new tax credit creates a “revolutionary opportunity” for education across the country.
“It will open the floodgates for all kinds of experiments and give parents access to Christian education, or whatever other kinds of education, they feel is best for their child,” he said.
While critics claim tax credit programs siphon public resources away from public education, Tryfiates points out the tax credits rely entirely on private donations.
"It doesn't have anything to do with federal funding,” he emphasized. “The federal budget and your state budget, those are all going to stay the same for public education.”
However, the program does face a major operational hurdle: Each state government must formally approve a list of SGOs in its state that are eligible for the tax-deductible donations.
Most states are participating, but a few have declined and about a dozen others are undecided.
The states that have announced an “opt-in” so far are Alabama, Alaska, Arkansas, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New York, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming.
