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Education Freedom Tax Credit for Nonprofits &
Other Scholarship Granting Organizations (SGOs)

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

The Education Freedom Tax Credit (EFTC) creates a new opportunity for nonprofits and SGOs to expand K–12 scholarships and educational opportunities.

ACE Scholarships brings more than 25 years of scholarship experience, while EmpowerEd by ACE Scholarships™ provides the technology and infrastructure to help organizations participate and grow.

Why Nonprofits Partner With ACE Scholarships

Nonprofits/Other SGOs gain a streamlined approach to efficiently accessing and administering the EFTC initiative to grow at scale while securing a 3% marketing incentive.

Your organization already has a mission, relationships, and communities it serves. When you partner with ACE, your team can spend less time building scholarship systems and focus more time on what matters most: creating educational opportunities for students.

Why Nonprofits Partner With ACE Scholarships
Let s walk you through the scholarship process

EmpowerEd

Technology to Help Power Your Scholarship Impact

EmpowerEd combines scholarship technology with ACE’s operational experience. Organizations can manage key scholarship processes, contributor information, applications, and reporting in one place while staying connected to their own mission and community.

Built to Help You Scale Your Impact

EmpowerEd is a complete scholarship management solution designed specifically for nonprofits and SGOs.

Whether you’re creating new scholarship opportunities or growing an existing scholarship program, EmpowerEd simplifies administration while giving your team the tools to confidently manage participation through the EFTC.

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Scholarship Administration

ACE supports scholarship administration and the operational work behind delivering scholarships.

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Trusted Infrastructure

Build on established scholarship systems instead of starting from scratch.

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Compliance & Reporting

ACE supports reporting, compliance, documentation, and operational workflows.

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Technology Powered by EmpowerEd

Bring applications, contributor tracking, scholarship management, and reporting into one platform.

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Dedicated Partner Support

Work with an experienced team as you explore and grow your EFTC partnership.

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Proven Scholarship Experience

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

How Partnership Works

You Bring Your Mission

You know the students, families, and communities you want to serve.

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ACE Brings the Experience

ACE provides more than 25 years of scholarship expertise and established infrastructure.

EmpowerEd Powers the Technology

EmpowerEd supports applications, scholarship management, contributor tracking, and reporting.

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Your Organization
Expands Its Reach

Build on existing infrastructure instead of creating every scholarship process yourself.

More Students Benefit

Together, we help expand access to educational opportunities for K–12 students.

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Together, We Can Make It Possible

Your organization brings the mission and community. ACE Scholarships and EmpowerEd bring scholarship experience, infrastructure, and technology.

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.