Federal Scholarship Tax Credit Calculator
From 2027, a gift to a scholarship organization can come back as a federal tax credit of up to $1,700. See what your gift earns, or whether your child could receive a scholarship.
Cash, check, card or payroll deduction, marked as a qualified contribution when you give.
Leave empty if your state gives none. A state deduction does not count here.
The credit can't go below zero tax. What doesn't fit carries forward up to 5 years.
Federal tax credit for 2027
$1,700
Dollar for dollar off your federal income tax, up to $1,700 per person. Not refundable.
| Gift | $1,700 |
|---|---|
| State tax credit on the same gift | $0 |
| Credit (capped at $1,700) | $1,700 |
| Federal credit | $1,700 |
This is an estimate, not tax advice. It uses the published rules for the tax year shown and leaves out situations a short form cannot ask about. For a decision, check with the IRS, your state, or a tax professional.
How this is calculated
The credit is section 25F of the tax code, added by the 2025 budget law. The IRS proposed its rules on October 2, 2026; taxpayers may rely on them for gifts made from January 1, 2027. The credit equals your gift to a scholarship granting organization, minus any state tax credit you get for the same gift, up to $1,700. Under the proposed rules, spouses on a joint return each have their own $1,700, so $3,400 if both give. The credit does not create a refund; what you can't use carries forward for up to 5 years.
Only organizations on the list of a state that opted in count. You can give to an organization in any participating state, wherever you live. The claim goes on your 2027 return with the new Form 8525, using the donor number the organization sends you by January 31, 2028.
Who can receive a scholarship
A student whose household income in the year before the application is not more than 300% of the area median income, and who can enroll in a public elementary or secondary school. The law adjusts the limit for household size with the same factors HUD uses. Example: with an area median of $100,000 the limit is:
| Household | Factor | Limit at $100,000 median |
|---|---|---|
| 1 person | 0.70 | $210,000 |
| 2 people | 0.80 | $240,000 |
| 3 people | 0.90 | $270,000 |
| 4 people | 1.00 | $300,000 |
| 5 people | 1.08 | $324,000 |
| 6 people | 1.16 | $348,000 |
| 7 people | 1.24 | $372,000 |
| 8 people | 1.32 | $396,000 |
Each person beyond 8 adds 0.08 to the factor.
Dates
| Date | What happens |
|---|---|
| December 1, 2026 | Temporary regulations TD 10057 take effect; comments on proposed regulations due |
| December 15, 2026 | Public hearing on proposed regulations (cancelled if no outlines by 2026-12-01) |
| January 1, 2027 | States: advance election for 2027 on Form 15714 (2027 only); first day qualified contributions can be made |
| February 15, 2027 | States: submit State SGO list for 2027 (perfects advance election); otherwise no SGO in that State qualifies for 2027 |
| January 31, 2028 | SGOs: written acknowledgement with unique donor number for 2027 contributions |
| February 28, 2028 | SGOs: report 2027 qualified contributions to IRS |
Participating states as of September 14, 2026 (30): Alabama, Alaska, Arkansas, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, North Dakota, North Carolina, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, Wyoming.
Sources
Checked against the sources below on .
- 26 U.S. Code § 25F (Cornell LII)
- Federal Scholarship Tax Credit, NPRM REG-117199-25, 91 FR 62818 (2026-10-02), proposed 1.25F-2(a)(2)
- Federal Scholarship Tax Credit, Temporary Regulations TD 10057, 91 FR 62655 (2026-10-02), 1.25F-5T(c)(3)
- Treasury press release sb0641 (2026-10-01)
- Treasury/ED Education Freedom Tax Credit fact sheet and FAQ (PDF, 2026-10-01)
- IRS: Federal Scholarship Tax Credit (FSTC), page updated 16-Sep-2026
- 26 U.S. Code § 530(b)(3)(A) (Cornell LII)
- HUD Income Limits FY2026 dataset page
- HUD FY2026 Income Limits Methodology
- HUD Section8-FY26.xlsx, Field_Descriptions
- IRS information collection notice, Form 15714 (2026-10-21)
- ED press release 2026-01-27 (historical: 23 states)
Questions people ask
How much is the federal scholarship tax credit?
Up to $1,700 per taxpayer per year, dollar for dollar against federal income tax. Married couples filing jointly can claim up to $3,400 if each spouse makes a gift, under the proposed rules.
When can I give to get the credit?
Gifts made on or after January 1, 2027 count. The credit is claimed on your 2027 federal return, filed in 2028.
Does a state tax credit reduce the federal credit?
Yes. A state tax credit for the same gift is subtracted before the $1,700 cap. A state deduction does not reduce it.
Which states participate?
30 states had opted in as of September 14, 2026. A state can still opt in until January 1, 2027, and must send its list of scholarship organizations by February 15, 2027.
What is the income limit for families?
Household income in the prior year of no more than 300% of the area median income, adjusted for household size. For a family of four in an area with a $100,000 median, that is $300,000.