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Education Freedom Tax Credit for

Faith-Based Organizations

Spend Less. Scholarship More. And Earn 3% Back.

The Education Freedom Tax Credit (EFTC) gives faith-based organizations a new way to expand K–12 scholarship opportunities and engage the communities they serve.

ACE Scholarships brings more than 25 years of scholarship experience, and EmpowerEd by ACE Scholarships™ provides the technology and infrastructure to support your organization’s participation.

How Faith Communities Can Help

Faith-based organizations are built on trusted relationships with families and communities.

The EFTC creates a new way to build on those relationships and expand educational opportunities for students. Your organization can help people understand the EFTC, participate, and support K–12 scholarships.

How Faith Communities Can Help
EmpowerEd

EmpowerEd

Technology to Support Your Mission

EmpowerEd gives faith-based organizations an established platform to support EFTC participation without building one from scratch.

ACE provides the scholarship experience behind EmpowerEd, helping your organization stay focused on its mission and community.

Why Faith-Based Organizations Partner With ACE

Faith-Based Organizations can make a tangible difference in their local community and provide students access to a quality education that better aligns with their parents’ values—all while producing a 3% marketing incentive.

Community Engagement

Help your congregation or community learn about and participate in the EFTC.

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Trusted Administration

Build on ACE’s experience managing contributions and scholarship administration.

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EmpowerEd Technology

Use one platform to support contributor tracking, scholarship management, and reporting.

Established Infrastructure

Participate without building scholarship systems and processes from the ground up.

Partner Support

Get support from ACE as your organization prepares for and participates in the EFTC.

Proven Experience

ACE has delivered more than 121,000 scholarships and distributed more than $395 million in scholarships and Education Savings Accounts.

How It Works for Faith-Based Organizations

Learn About the EFTC

Understand the opportunity and what it could mean for your organization and community.

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Partner With ACE

Explore how ACE and EmpowerEd can support your organization.

Engage Your Community

Help your congregation and community members understand the opportunity.

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Your Community Participates

Eligible taxpayers in your community can make qualifying EFTC contributions through the appropriate pathway.

More Opportunity
Becomes Possible

Those contributions help fund K–12 scholarships for eligible students.

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Help Your Community Make It Possible

Your organization can help put more educational opportunities within reach for students and families through the EFTC.

See how ACE Scholarships and EmpowerEd can support your organization.

EFTC FAQs

The EFTC is a federal tax credit for eligible contributions to qualified SGOs. Those contributions help fund scholarships for qualifying K–12 educational expenses.

Eligible taxpayers make qualifying cash contributions to participating SGOs. They may then claim a federal income tax credit of up to $1,700 per taxpayer, or $3,400 for married couples filing jointly, for the qualifying contribution, subject to federal requirements and their federal income tax liability.

SGOs use qualifying contributions to provide scholarships that help eligible K–12 students access educational opportunities.

A Scholarship Granting Organization (SGO) is a qualifying nonprofit organization that receives contributions and provides scholarships for eligible K–12 students.

For an EFTC contribution to qualify for the federal tax credit, the SGO must meet federal requirements and be included on the applicable participating state’s SGO list.

Under the EFTC initiative, scholarship funds may be used for expenses incurred in connection with an eligible K–12 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)

*as defined by the U.S. Department of the Treasury

Yes. Beginning January 1, 2027, eligible taxpayers in all 50 states with a federal income tax liability can participate in the EFTC and receive a dollar-for-dollar tax credit of up to $1,700 per taxpayer, or $3,400 for married couples filing jointly. However, only states that have opted to participate in the federal tax credit can receive scholarship funding.

Yes. The IRS refers to the EFTC as the Federal Scholarship Tax Credit (FSTC). Both names refer to the same federal tax credit.

The SGO is responsible for administering qualifying contributions and scholarships in accordance with federal requirements. This includes determining student eligibility, distributing scholarships, maintaining required records, and meeting applicable compliance requirements.

A qualifying EFTC contribution must be made to an eligible SGO included on the applicable participating state’s list.