Clear answers to common questions about eligibility, credits, and scholarships.
WHAT YOU NEED TO KNOW
Frequently Asked Questions
Student & School Eligibility
Who is eligible to receive a scholarship?
Under the federal tax credit initiative, scholarships will be available to eligible K-12 students who meet the following criteria:
- Residential Eligibility: Student resides in a state that voluntarily chooses to opt in to the federal tax credit for scholarships.
- Enrollment Eligibility: Student is enrolled or eligible to enroll in K-12 public school, regardless of the type of school they attend now.
- Financial Eligibility: 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.
What educational expenses are covered?
Under the federal tax credit for scholarships, 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 and fees
- Academic tutoring
- Special needs services
- Books, supplies, and other equipment which are incurred in connection with the enrollment or attendance at a public, private, or religious school
- Room and board
- School uniforms
- Transportation
- Supplementary items and services (including extended day programs) which are required or provided by a public, private, or religious school in connection with such enrollment or attendance
- Expenses for the purchase of any computer technology or equipment or Internet access and related services. This does not include expenses for computer software designed for sports, games, or hobbies unless the software is predominantly educational in nature.
What types of schools are eligible to receive scholarship funds?
Any public or private (including religious) school program that provides elementary or secondary education (kindergarten through grade 12).
Are scholarships available to students in all 50 states?
Scholarships can reach students in all 50 states—but only if state leaders choose to participate.
Congress has unlocked educational freedom for millions of K-12 students across all 50 states by passing the federal tax credit for scholarships. 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. Click here to learn more about opting-in
Are students required to take standardized tests?
No, there is no requirement in the federal law that requires students who receive the federal tax credit to be administered an assessment. 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.
Donations & Tax Credits
Are tax credits available to donors in all 50 states?
Yes. Beginning in 2027, individual taxpayers across the U.S. can claim up to $1,700 in federal tax credits each year by donating to qualified scholarship granting organizations like ACE Scholarships. Unlike a standard deduction, this is a dollar-for-dollar credit that directly reduces the amount you owe to the IRS.
What is the maximum amount an individual can donate through the federal tax credit for scholarships?
Individuals can receive a 100% federal 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.
Can unused credits be carried over?
Yes. Unused tax credits can be carried forward for up to five years.
Can parents donate through the federal tax credit for scholarships, receive a federal tax credit, and direct their gift to provide a scholarship for their own children?
No. To ensure fairness, transparency, and compliance with federal law, parents cannot direct donations made through the federal 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.
How can businesses participate in the federal tax credit for scholarships?
While federal tax credits 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.
How will the federal government pay for the tax credits for scholarships?
The federal 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.
Program Structure & Compliance
How is a federal tax credit for scholarships different from traditional vouchers?
While traditional voucher programs use state-appropriated public funds, the innovative approach enabled through the federal tax credit for scholarships incentivizes private investment in scholarships to expand educational freedom and opportunities for students across America. Scholarships delivered through the FTCS may be awarded to students who are enrolled at either private schools, including religious schools, and public schools.
What requirements does a Scholarship Granting Organization (SGO) need to meet in order to participate in the federal tax credit for scholarships?
In order to be eligible to participate in the federal 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
Does ACE Scholarships have the ability to receive private donations and provide scholarships to K-12 students across all 50 states?
Yes. ACE Scholarships is fully equipped to lead the implementation of the federal 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 121,000 scholarships worth more than $395 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.
*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.
Want to see our report card?
ACE is proud to receive Charity Navigator’s highest rating, 4 stars.
THE RIGHT SCHOOL CAN CHANGE THE STORY FOR A CHILD IN NEED
Donate Today »EVERY CHILD DESERVES
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.
