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FEDERAL TAX CREDIT FOR SCHOLARSHIPS
Educational freedom for students across America!
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Learn how you can stand with America’s K-12 parents and students to promote educational freedom.
Beginning in 2027, the new federal tax credit for scholarships has the capacity to bring educational freedom to families across America in a truly unprecedented manner by offering a dollar-for-dollar tax credit of up to $1,700 for individuals who donate to qualifying nonprofit Scholarship Granting Organizations (like ACE Scholarships!). This is exciting news because every child deserves access to an excellent education, regardless of their zip code.
As organizations evaluate the possibility of forming Scholarship Granting Organizations (SGOs) in response to the passage of the federal tax credit for scholarships, they will soon discover the overwhelming administrative and technological challenges of the effort. ACE is uniquely positioned to meet this need through its proven platform and 25 years of scholarship granting experience – combining experienced people, streamlined processes and executional proficiency.
ACE offers a smarter solution – a partnership that leverages its established infrastructure and innovative technology in a mutually beneficial collaboration. This means organizations can avoid the operational complexities and startup costs of establishing and operating an SGO while still taking advantage of the federal tax credit opportunity to expand their impact.
What is the Federal Tax Credit for Scholarships?
Beginning in January 2027, this new tax credit opportunity could empower millions of families by generating funding for scholarships that allow America’s K-12 students the ability to choose the educational environment, services and supports that meet their unique learning needs.
Educational opportunities no longer need to be dictated by zip code, but can instead be curated by parents who know their children best.
Scholarships are funded entirely through private donations, not taxpayer dollars.
Donors receive a dollar-for-dollar federal tax credit (up to $1,700), making this an innovative, powerful, cost-effective way to expand opportunities and unleash educational freedom — all without compromising public school funding.
Empowering Donors and Parents Through a Tax Credit
How It Works
Individual Donors
A 100% nonrefundable federal tax credit of up to $1,700 per year, with unused credits eligible to be carried forward for up to five years.
Families
Scholarships may be provided to students from households earning up to 300% of area median income who are enrolled in, or eligible for, public school.
Timeline and Rule-making Information
Nov-Dec 2025
U.S. Treasury Releases Request for Comment
Jan-July 2026
U.S. Treasury Drafts and Releases Regulations for Public Comment Period
July-Oct 2026
Public Comment and Review Period
Dec 12, 2025
U.S. Treasury issues form & procedure for states to opt-in
Dec 26, 2026
Due date for comment submission
Dec 31, 2026
Last Day to Donate for a 2027 Tax Credit
Apr 15, 2028
Donors Can Apply Tax Credits On Their 2027 Tax Filing
Note: Please note this is not a defined timeline but is based on prior rulemaking timelines. Some guidance may not be issued until 2027.
Schools
ACE Scholarships partners with schools to expand access through federal tax-credit scholarships, helping increase enrollment, foster innovation, and preserve school autonomy. Eligible scholarship funds can be used for tuition, fees, supplies, technology, public-school courses, extended day programs, tutoring, and special-needs services.
Families
The federal tax-credit scholarship gives families real educational choice by covering tuition, fees, tutoring, therapies, technology, and other eligible expenses—so parents can choose the school and support that fits their child, not their income or zip code. Eligible students are those from households up to 300% of area median income who are enrolled in, or eligible to enroll in, public school.
Wealth Managers
The federal scholarship tax credit lets individuals directly back students and educational choice while cutting their federal tax bill dollar-for-dollar. Taxpayers can claim up to $1,700 each year (with carryforward for five years), and credits are nonrefundable and cannot also be taken as charitable deductions. With no program cap and no dependence on state appropriations, it offers a scalable way for donors to expand opportunity and strengthen education freedom nationwide.
Taxpayers
The federal tax-credit scholarship program lets individual donors support students directly while reducing their federal tax bill dollar-for-dollar—up to $1,700 per year, with unused credits carried forward for five years. Unlike deductions, tax credits offer a direct reduction in taxes owed, enabling donors to expand educational freedom and fund scholarships without new government spending or appropriations.
Opt-In
The federal tax-credit scholarship program can expand school choice for families at no cost to states—if states opt in. Governors must opt in each year by January 1 or risk losing scholarship dollars to other states, meaning local students miss out on tuition, tutoring, special education, technology, and other eligible educational supports.
Support
The federal tax-credit scholarship gives families real educational choice by covering tuition, fees, tutoring, therapies, technology, and other eligible expenses—so parents can choose the school and support that fits their child, not their income or zip code. Eligible students are those from households up to 300% of area median income who are enrolled in, or eligible to enroll in, public school.
Frequently Asked Questions
The federal tax-credit scholarship gives families real educational choice by covering tuition, fees, tutoring, therapies, technology, and other eligible expenses—so parents can choose the school and support that fits their child, not their income or zip code. Eligible students are those from households up to 300% of area median income who are enrolled in, or eligible to enroll in, public school.
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The federal tax-credit scholarship gives families real educational choice by covering tuition, fees, tutoring, therapies, technology, and other eligible expenses—so parents can choose the school and support that fits their child, not their income or zip code. Eligible students are those from households up to 300% of area median income who are enrolled in, or eligible to enroll in, public school.
*NOTE: The information presented on this website reflects ACE Scholarships FTC SGO’s understanding as of Section 25F of the Internal Revenue Code of 1986, as amended, as of the current date and is subject to change without notice. Subsequent legislation, judicial decisions, as well as regulations or any other guidance, whether formal or informal, from the U.S. Department of the Treasury or any other governmental authority, may, be determined by ACE Scholarships FTC SGO, in its discretion, to require changes to the program and any related requirements. We will update relevant content as soon as administratively practicable as new information becomes available. However, no assurance is given that the information is current, complete or accurate as of any particular date, and ACE Scholarships FTC SGO assumes no obligation to update any content except as required by applicable law.
*NOTE: The information provided on this website is for general informational purposes only and does not constitute tax, legal, accounting, or financial or other professional advice. ACE Scholarships FTC SGO does not provide tax, legal, accounting, financial or other professional services, and no attorney-client, tax advisor-client, or other professional relationship is created by your access to or use of this site. You should not act upon any information contained herein without first obtaining advice from your own independent qualified tax, legal, accounting, financial or other professional advisor based on your individual circumstances. Any U.S. Federal Income Tax information on this website is not intended or written to be used, and cannot be used, for purposes of avoiding penalties under the Internal Revenue Code or promoting, marketing or recommending to another party any transaction of matter addressed herein. References to third-party resources or websites are provided for your convenience only and do not constitute any endorsement. ACE Scholarships FTC SGO has no responsibility for the content of such third-party resources.
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A GREAT EDUCATION
That’s our stand. At ACE Scholarships we’re committed to helping lower-income parents provide that opportunity to their children. Our mission is to advance K-12 educational freedom, with a focus on securing financial support for families so they may access the quality education of their choice.
