Frequently Asked Questions

Frequently Asked Questions

EFTC Home

Services

Schools

Families

Ways to Support

Opt-In

Under the Education Freedom Tax Credit initiative, scholarships will be available to K–12 students who reside in states that opt-in and who are eligible to enroll in public school. Student financial eligibility is based on household income up to 300% of the area median income, as defined by the U.S. Department of Housing and Urban Development. This inclusive income threshold means that an estimated 85% to 90% of students nationwide may be eligible for scholarships, making this one of the most accessible and far-reaching school choice initiatives ever adopted.

Under the Education Freedom Tax Credit initiative, scholarship funds may be used for expenses incurred in connection with an eligible student’s enrollment or attendance at a public, private or religious school, including:

  • Tuition, uniforms, transportation and other fees
  • Books and supplies
  • Academic tutoring
  • Extended day programs
  • Computer technology, equipment, or internet access
  • Educational therapies (e.g., occupational, speech, behavioral, physical)
Any public or private (including religious) school program that provides elementary education or secondary education (kindergarten through grade 12), as determined under state law.
The Education Freedom Tax Credit for scholarships initiative allows families to choose the education that best fits their needs—without taking a single dollar away from public schools. While traditional voucher programs use state-appropriated public funds, the innovative approach enabled through this initiative incentivizes private investment in scholarships to expand educational freedom and opportunities for students across America.
Testing policies and assessment methods are determined by the schools themselves and may vary significantly from school to school based on that institution’s unique mission, values, and educational philosophy. To learn more about a school’s specific testing requirements, visit their website or contact their admissions department.
The Education Freedom Tax Credit initiative incentivizes private investment in student scholarships. Unlike traditional voucher programs, it does not use public funds appropriated by the state or federal government. This innovative approach expands educational freedom for students and protects against the risk of government infringement of religious liberty, pursuant to a landmark ruling at the U.S. Supreme Court in Espinoza v. Montana Department of Revenue (2020).

In order to be eligible to participate in the Education Freedom Tax Credit for scholarships, an SGO must:

  • Be a 501(c)(3) and not a private foundation
  • Prevent the co-mingling of contributions with other funds received
  • Be included on the list submitted by a state governor to the Treasury
  • Provide scholarships to 10 or more students who do not attend the same school
  • Spend 90% or more of their income on scholarships
  • Ensure funds are used exclusively for qualified expenses
  • Prioritizes and awards students in accordance with the law
Only if their state opts-in. Each year, by January 1, the Governor (or another state-designated authority) must submit to the U.S. Treasury a list of Scholarship Granting Organizations (SGOs) in their state that meet the requirements of the law. Without this step, students in that state cannot be considered for scholarships.
Beginning January 1, 2027, tax credits for qualified contributions will be available to every individual taxpayer in America.
Congress has unlocked educational freedom for millions of K-12 students across all 50 states by passing the Education Freedom Tax Credit Scholarship. Beginning in 2027, eligible families can access scholarships that help cover tuition, tutoring, special needs services, technology, and more—empowering parents to make the best choices for their children’s futures. However, each state must opt-in to this incredible opportunity.

Take action now to help ensure that families and students in your state can benefit! Send an email to your Governor and lawmakers urging them to opt-in to the federal tax credit for scholarships and expand educational freedom for families across America.

Individuals can receive a 100% Education Freedom Tax Credit—up to $1,700 per year—when they donate to a certified Scholarship Granting Organization (like ACE!), helping students access better educational opportunities.
Yes. Unused tax credits can be carried forward for up to five years.
No. To ensure fairness, transparency, and compliance with federal law, parents cannot direct donations made through the Education Freedom Tax Credit for scholarships to benefit their own children. In fact, the federal tax credit for scholarships prohibits any form of self-dealing to maintain the integrity of the program. Instead, donations must go to approved Scholarship Granting Organizations (SGOs), like ACE Scholarships, which are responsible for verifying student eligibility and awarding scholarships. This structure ensures that every dollar goes where it’s needed most—expanding opportunity for students across all communities.
While Education Freedom Tax Credit are limited to individual taxpayers who make qualifying contributions, business leaders can play a vital role by encouraging employee giving, educating others about the benefits of the federal tax credit for scholarships, and publicly advocating for the expansion of educational freedom for K-12 students across all 50 states.
The Education Freedom Tax Credit for scholarships is funded entirely through voluntary private donations, not new government spending, making it a fiscally responsible solution that expands educational opportunity without taking a single dollar from public schools.

Yes. ACE Scholarships is fully equipped to lead the implementation of the Education Freedom Tax Credit for scholarships nationwide. With 25 years of experience delivering privately funded scholarships, managing state tax-credit programs, and advancing school choice policies, ACE has awarded over 100,000 scholarships totaling more than $330 million across 13 states. As a trusted nonprofit Scholarship Granting Organization (SGO), ACE has the infrastructure, expertise, and mission-driven team to expand educational opportunity to families in opting-in states.

Please email us at [email protected] if you have any questions or need any assistance.