Direct Your Federal Taxes Toward Educational Freedom

The Education Freedom Tax Credit allows taxpayers to receive a federal tax credit of up to $1,700 for charitable contributions made to a Scholarship Granting Organization (SGO). Unlike a deduction, a tax credit reduces your federal income tax owed dollar-for-dollar. Any U.S. citizen or resident in a state or D.C. who makes a qualifying contribution to an SGO may claim the credit. Contributions open January 1, 2027.

An SGO is a nonprofit charity that uses at least 90% of its income to fund scholarships for eligible K–12 students seeking education choice options. SGOs must be listed on a participating state's official SGO list and are prohibited from funding anything other than qualified elementary or secondary education expenses.

First, a state governor opts in, making it a "covered state" and publishing an official SGO list. Second, a donor makes a cash contribution to an SGO on that list. Third, when filing their federal income tax return, the donor claims a dollar-for-dollar credit of up to $1,700. If the full credit cannot be used in one year, the unused portion carries forward for up to five years.

Students who are eligible to enroll in a public elementary or secondary school and whose household income does not exceed 300% of the area's median gross income qualify for scholarships. Most students in participating states will be eligible, meaning the more donors who participate, the more students can be served. See income eligibility levels by state →

Scholarships can cover any qualified K–12 education expense — including tuition at a private or charter school of choice, academic tutoring, classroom supplies, fees, equipment, uniforms for career training programs, and after-school enrichment. Scholarship amounts are not capped at $1,700; the SGO determines the award based on its mission and available funds.

No. Any U.S. citizen or resident can donate to an SGO and claim the federal tax credit regardless of their state's participation. State opt-in only determines whether families within that state can receive scholarship funds. You can donate from any state and still receive your $1,700 credit.

No. This program does not divert money from local or state taxes, which make up the large majority of public school funding. Instead, it encourages voluntary charitable giving from taxpayers. The federal tax credit offsets federal income taxes — it does not redirect any local or state education funding.

In December 2025, the Treasury Department and IRS issued a request for comments and guidance allowing states to declare advance intent to participate for 2027. Final implementing rules and guidance for taxpayers, charities, and states are expected to be issued in 2026. The credit becomes available for contributions made on or after January 1, 2027.

A recent report estimates the Education Freedom Tax Credit could generate an additional $24 billion in education funding annually. Every $1 billion in scholarships could fund private school tuition for approximately 77,000 students, or cover tutoring services for more than 300,000 students.

Research strongly supports it. Among 16 randomized controlled trial evaluations of school choice on academic achievement, 10 found positive impacts. Of 33 empirical studies on the competitive effects of school choice on public school achievement, 31 found positive outcomes. And 25 of 28 studies examining fiscal effects found that education choice policies saved taxpayer money.

In most cases, yes — if your federal tax liability is equal to or greater than your donation, you receive a dollar-for-dollar credit. For example, a $1,700 donation reduces your federal tax bill by exactly $1,700, making your net out-of-pocket cost $0. Because this is a nonrefundable credit, it cannot exceed your total tax owed — so your benefit depends on your individual tax situation. Use our out-of-pocket cost calculator → to see exactly how it works for your numbers.

No. Federal law prohibits Scholarship Granting Organizations from earmarking or setting aside contributions for a specific student. This rule applies to all SGOs participating in the Education Freedom Tax Credit program and is designed to ensure that scholarships are awarded fairly and impartially, based on eligibility criteria rather than donor preference. When you donate to Accord Kids, your contribution goes into a scholarship fund that benefits eligible students broadly — not any one individual.

No. The Education Freedom Tax Credit is a nonrefundable tax credit. This means it can reduce your federal income tax liability dollar-for-dollar down to zero — but it cannot produce a refund beyond that. If your EFTC credit exceeds your tax liability for the year, you do not lose the unused portion: it carries forward for up to five years and can be applied against future tax bills. Use our tax scenario calculator to see how it applies to your situation.

It depends on your underlying tax liability — not your refund. A refund simply means you overpaid your taxes during the year through withholding or estimated payments. What matters for the EFTC is your total federal income tax owed before those payments. For example, if your tax bill is $2,000 but you had $2,500 withheld — giving you a $500 refund — you still have $2,000 in tax liability that the EFTC can offset. In that case, a $1,700 donation would generate a $1,700 EFTC, reducing your tax liability from $2,000 to $300 and increasing your refund from $500 to $2,200. The credit works against your tax liability, not your withholding — so being on track for a refund does not disqualify you.