The Federal Scholarship Tax Credit Starts January 1: Is Your Tuition Page, Admissions Team, and Donor List Ready?

Families will ask your admissions office about a new tax credit. If you're a head of school with 260 students, a 12- to 15-member board, and an admissions office of two, you've probably heard about it already from a board member or a parent who read a headline. The federal scholarship tax credit private schools keep hearing about applies to gifts made on or after Jan. 1, 2027, according to the IRS. The proposed rules came out Oct. 1, 2026. The final rules haven't.

That timing puts you in an awkward spot. Say nothing, and your school looks unprepared at the November open house. Promise a dollar amount, and you've made a commitment nobody can back up yet. There's a calm middle path.

I work with private school leaders on tuition pages and inquiry flow, and policy changes like this reach the admissions desk months before anyone updates the website. This post covers what passed, who qualifies, what's settled, what's open, what families will ask, and five things to do before January. It's about what your school should do, not whether the law is a good idea.

One limit up front: this credit won't fill seats on its own. You don't control whether your state opts in, and SGOs, not schools, decide who receives a scholarship and how much. New programs like this also start slowly. EdChoice's 2023 analysis highlights that state tax-credit scholarship programs averaged 0.35% take-up among eligible students in their first year and about 1.86% by their tenth year. The first-year win is accuracy, not volume.

What Is the Federal Scholarship Tax Credit?

The federal scholarship tax credit is a nonrefundable federal income tax credit of up to $1,700 for individual taxpayers who give cash to a qualifying scholarship granting organization, starting with gifts made on or after Jan. 1, 2027. The tax code calls it Section 25F. Treasury calls it the Education Freedom Tax Credit.

Treasury's Oct. 1 release stated that "eligible taxpayers may claim an annual credit of up to $1,700 for qualifying contributions, or up to $3,400 for married couples filing jointly." Treasury's release also notes that Section 25F was enacted in 2025. The joint figure comes with a condition. The proposed rules allow a couple "to potentially claim up to $3,400 on their joint tax return provided that each spouse has made qualified contributions of up to $1,700." (Source: Federal Register)

Here's the part families mix up. The school doesn't receive the credit, and families don't claim it. A donor gives to an SGO, a nonprofit that pools gifts and awards scholarships. The donor claims the credit on their federal return. The family applies to the SGO for a scholarship.

Your school's job is to explain that chain in one breath.

Which Students Can Receive a Federal Tax Credit Scholarship?

A student can receive a scholarship if they're eligible to enroll in a public school and live in a household at or under 300% of area median gross income. The proposed rule's preamble measures that income for the calendar year before the application. Because the cutoff follows the local median, it varies by area.

Scholarships can go toward tuition and other qualified costs, with the official list of qualifying expenses still to come. The Treasury Department and the IRS "intend to issue that guidance as soon as possible so that taxpayers may rely on it," according to the Federal Register notice, which ties the pending guidance to "qualified expenses and schools."

Don't guess which of your families will qualify. That call belongs to the SGO, and a wrong guess from admissions is worse than none.

Does Your State Have to Opt In for SGO Scholarships in 2027?

Yes. Scholarships go only to students in states that opt in, even though donors in every state can claim the credit. The IRS list dated Sept. 14, 2026 names 30 states, including North Carolina and Texas. Check the live list before you repeat a count, because the list can change.

The donor side works across state lines. Treasury's release on the proposed rules reports that "Taxpayers may contribute to an eligible SGO regardless of their state of residence." A donor in a state that didn't opt in can still give to an SGO in a state that did. Families in the donor's own state, though, can't receive these scholarships.

If your state is on the list, one proposed provision matters to faith-based and independent schools alike. The Federal Register text states that a state "may not require SGOs to operate in a manner that is more restrictive than the requirements set forth in section 25F(c)(5)... such as by limiting the type of school that scholarship recipients may attend." That's proposed § 1.25F-5(e)(2), and it's still a proposal.

If your state isn't on the list, say so plainly on your website. Families would rather hear "not here, not yet" from you than from someone else.

What Did the Proposed Rules Settle, and What's Still Open?

The proposed rules settled the credit's size, its start date, the joint-filer treatment, and how long unused credit lasts. They left three things open: the final rules, guidance on which expenses and schools qualify, and each opt-in state's list of SGOs. Until final rules arrive, taxpayers, SGOs, and states can rely on the proposed rules for 2027 gifts.

That reliance comes straight from the rule. "Taxpayers, organizations, and States may rely on these proposed regulations for qualified contributions made on or after January 1, 2027," until final regulations are published. (Source: Federal Register notice of proposed rulemaking) Here's where things stand as of Oct. 13, 2026:

Treasury's announcement confirms the $1,700 cap, the $3,400 joint figure, the Jan. 1, 2027 launch, the five-year carryforward for unused credit, donors' ability to rely on an organization's inclusion on the IRS SGO list, and the proposed bar on states imposing SGO requirements stricter than section 25F.

On the open items, the rule's DATES section sets a comment deadline of Dec. 1, 2026, and a public hearing on Dec. 15, 2026, which is canceled if no one asks to speak. For state lists, the Federal Register notice says a participating state must send its SGO list to Treasury "with respect to the 2027 calendar year, as early as practicable." Until your state's list is posted, you can't tell families which SGO to apply to.

What Will Families Ask About the Federal Tax Credit Scholarship This Fall?

Families will ask three things: whether they can use it for tuition, how much they'll get, and whether your school takes it. Your admissions team needs one honest answer to each, given the same way by every staff member. Each answer should say what's known, what isn't, and when you'll know more.

Here are three-sentence answers your staff can adapt.

Can I Use the Federal Credit for Tuition?

"Scholarships from this program can go toward tuition and other qualified costs, but the federal guidance on exactly which expenses and schools qualify hasn't been released yet. The scholarship would come from a scholarship organization, not from our school. We'll update our tuition page as soon as that guidance is out."

How Much Scholarship Money Will I Get?

"There's no set amount, because each scholarship organization decides its own awards. We don't know yet what the organizations serving our state will offer for 2027. In the meantime, our own financial aid process works the same way it always has."

EdChoice's program summary backs up that answer: "These SGOs determine scholarship amounts, which may vary depending on the SGO to which a student applies for a scholarship."

Does Your School Take the Federal Tax Credit Scholarship?

"Families don't use the credit directly; donors claim the credit, and families apply to a scholarship organization. Our state is on the IRS participation list, and we're watching for its list of approved scholarship organizations. Once that list is posted, we'll tell you which ones families here can apply to."

Swap the middle sentence if your state isn't on the list. Then put all three answers into your inquiry response playbook so a family gets the same answer by phone, by email, and on a tour.

Why Say Anything Before the Rules Are Final?

Families will hear about the federal scholarship tax credit somewhere, and your school is one of the places they'll look. Families who use choice programs "most frequently learned about them through relatives or friends, the Internet, the private school directly, or from their public district school." (Source: EdChoice) Silence doesn't keep the question away. It hands the answer to someone else.

Awareness is the real gap. In a 2021 Ohio survey, EdChoice found that 36% of parents who never enrolled a child in one of that state's private school choice programs said they didn't know the programs existed. Cost sits near the center of what drives school choice, so a dated note on affordability options earns its place. The Dec. 1 and Dec. 15 dates are already public.

What Should Your School Do Before January 1?

Do five things before Jan. 1, 2027: find the SGO or SGOs that serve your state, add a dated section to your tuition and financial aid page, train admissions on one consistent answer, tell your donor base, and plan a January family email. None of these needs a new budget line, and most fit inside October.

Find the SGOs That Serve Your State

Start with the IRS participation page and your state's education or revenue agency. If your state already runs a tax-credit scholarship program, the organizations that administer it are your first calls. Ask each one whether it plans to seek a spot on your state's 2027 list.

Add a Dated Section to Your Tuition and Financial Aid Page

Put a short, dated block on the page families already use to estimate cost. For layout ideas, see our tuition page strategies that convert. Here's a version a school in a participating state could adapt:

Federal scholarship tax credit (updated Oct. 13, 2026). Starting with gifts made on or after Jan. 1, 2027, donors may be able to claim a federal tax credit for gifts to approved scholarship organizations, which award scholarships to eligible students. Our state is on the IRS list of participating states for 2027. Final federal rules, guidance on qualifying schools and expenses, and our state's list of scholarship organizations are still pending. We'll update this page as each one is published. Questions? Contact our director of admissions.

Keep the block near your aid information, not buried in a news post. If your tuition page already struggles to turn visits into inquiries, our guide to improving tuition page conversions covers the fixes worth making while you're in there.

Train Admissions on One Consistent Answer

Write your answers to the three family questions on one page and give a copy to anyone who answers the main phone line. Then log every family that asks. An optional "Interested in scholarship programs?" checkbox on your inquiry form builds that list for you.

Tell Your Donor Base

Your donors will hear about the federal credit from tax preparers and SGOs. Tell them first, briefly, and send every tax question to their own adviser. For the wider relationship, see our guide to donor relationships that work. Whether a donor can claim the full credit depends on that donor's tax situation, so "everyone gets $1,700 back" is a promise your school shouldn't make.

Plan a January Family Email

Draft the email now and send it after the next update lands: the final rules, the expense guidance, or your state's SGO list. Send it to every family that asked, plus current aid families. Pair it with the tuition incentives you already offer, so families see the full affordability picture.

What Should Your School Avoid Saying About the Credit?

Avoid four claims: a scholarship amount per student, the word "voucher," a state count with no date, and any line that says the credit is available now. Each one is either inaccurate today or likely to be wrong by spring, and families who act on a wrong claim will remember who made it.

The $1,700 figure is a donor's maximum credit, not a scholarship award. This program runs on private donations to nonprofit SGOs, which award the scholarships, so "voucher" describes it inaccurately and invites a debate your admissions office doesn't need to host. A state count without a date goes stale the day another state joins. And gifts made before Jan. 1, 2027 don't qualify under the proposed rules, so "now available" on a fall 2026 page isn't true yet.

What Does This Look Like at a 260-Student College Prep?

For a K-12 independent college prep with 260 students and tuition between $15,000 and $25,000, getting ready takes a few staff hours in October, a board update in November, and one email in January. In this example, the school's state is on the IRS list, and its admissions office is two people.

In October, the admissions director finds the state's existing scholarship organizations and calls two of them. The head of school approves a dated block of about 90 words for the tuition page, and the three family answers go into the inquiry playbook. In November, the head of school brings the board a one-page summary built from the Known and Not Yet Known table, and the development office sends donors a short note. In January, after the next federal update, the family email goes to everyone who checked the box.

What changes by January? Probably not enrollment, given how slowly new tax-credit scholarship programs ramp up. What changes is that the tuition page tells the truth, every staff member gives the same answer, the board isn't surprised, and the school has a list of families to call the day the state's SGO list appears.

Get Your Tuition Page Ready Before the January Rush

The federal scholarship tax credit applies to gifts made on or after Jan. 1, 2027, but the rules are still proposed, and your state's SGO list may not exist yet. The schools that handle this well won't make the boldest promises. They'll say what's known, date it, and update it on schedule.

For the rest of next year's planning, our 2027 planning overview covers the other changes worth budgeting for.

If you want a second set of eyes on your tuition page and inquiry flow before families start asking, let's talk. I'll review both and send back the changes I'd make first, with no contract and no pitch.

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