How the Education Freedom Tax Credit Works
The Education Freedom Tax Credit (EFTC) creates a new way for taxpayers to help expand K–12 educational opportunities through qualified scholarship contributions.
Beginning in 2027, eligible taxpayers may receive a federal income tax credit of up to $1,700 per taxpayer, or $3,400 for married couples filing jointly, for qualified cash contributions to participating Scholarship Granting Organizations (SGOs).
States Participate
States must take the required steps under federal law to participate in the EFTC and identify qualifying SGOs.
Participation determines whether EFTC scholarship funds can support eligible students within that state.
Taxpayers Make Qualified Contributions
Eligible taxpayers can contribute to a qualifying SGO and claim a nonrefundable, dollar-for-dollar federal income tax credit of up to $1,700 per taxpayer, or $3,400 for married couples filing jointly, subject to federal tax rules.
Unused eligible credit may generally be carried forward for up to five years.
Contributions Fund Scholarships
Qualified SGOs use EFTC contributions to provide scholarships for eligible K–12 students.
Scholarships can help families access qualifying educational expenses, including tuition, academic tutoring, special-needs services, and other qualified expenses permitted under federal law.
Eligible taxpayer contributes to ACE Scholarships.
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ACE Scholarships administers contributions and manages compliance, reporting, and scholarship operations.
Scholarship funding grows through EFTC contributions.
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Students receive scholarships to attend the educational environment that's right for them.
Together, scholarship funding expands opportunity for more K–12 students.
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Where Do You Fit In?
The EFTC creates unique opportunities for different people. Choose the path that sounds like you.
