It’s officially a new era in American education.
Starting on January 1, 2027, the Education Freedom Tax Credit (EFTC) lets any taxpayer help fund a scholarship for a child and receive up to $1,700 back as a federal tax credit. It’s the first credit of its kind in our nation’s history.
For most of American history, tax policy and school choice have lived in separate conversations. The EFTC brings them together in a way that’s simple enough to explain in two minutes, yet significant enough to reshape how millions of families think about both their taxes and their children’s education.
The video above walks through the basics. Below, we’ll go deeper: exactly how the credit works, who qualifies, and what it means once it’s actually in your hands or your child’s classroom.
The EFTC and Your Family
The video above walks through everything in under two minutes, but here’s the heart of it.
Effective January 1, 2027, you make a charitable contribution to a qualified Scholarship Granting Organization (SGO), a nonprofit that connects generous donors with students who need it.
That organization turns your gift into a scholarship for a child. Then, when you file your taxes, you claim a dollar-for-dollar federal tax credit of up to $1,700. It’s simple, and it’s personal: you give first, a child gets a chance to learn somewhere built for them, and the credit comes back to you at filing.
What “Dollar-for-Dollar” Actually Means
It helps to see the math side by side. A tax deduction lowers the income the IRS taxes you on, so the real savings depend on your tax bracket — for most filers, that’s a fraction of what they gave. A tax credit works differently: it comes directly off your tax bill, dollar for dollar.
Say you owe $2,000 in federal taxes for the year. Donate $1,700 to a qualified SGO, and you now owe $300 — not a discount, a direct, dollar-for-dollar reduction, up to the $1,700 cap.
Timing matters here too. Donations become eligible starting January 1, 2027, and the credit is claimed when you file your 2027 federal tax return in early 2028. The scholarship itself doesn’t wait on tax season, though. Once your contribution reaches the SGO, it can go to work for a student right away.
Why It’s Different
What sets the EFTC apart from state-level programs is scale.
Be the First to Know
Get notified when the Education Freedom Tax Credit launches so you don’t miss the opportunity to support K–12 students while benefiting from a federal tax credit.
For the first time, a taxpayer in a participating state can direct part of what they already plan to give to charity toward a scholarship for a child anywhere in the country.
It doesn’t raise anyone’s taxes or create a new government program. It simply lets a charitable dollar do double duty: funding a scholarship today and reducing what the donor owes the IRS at filing.
And it’s worth saying plainly: this is a tax credit, not a deduction, which is why it’s worth up to $1,700 back, dollar for dollar, rather than a smaller reduction in taxable income.
Who the EFTC Is For
The short answer: nearly everyone. On the giving side, any taxpayer in a participating state who wants their charitable dollars to go further can take part, and you don’t need to be a major donor to make a difference. Because the credit applies dollar for dollar up to $1,700, a family giving what they can comfortably afford gets the same proportional benefit as someone giving the maximum.
On the receiving side, the reach is just as broad. Scholarships funded through qualified SGOs can go toward private school tuition, tutoring, and other qualifying K-12 expenses, and approximately 90% of American students are eligible for a scholarship under the program. This isn’t a narrow pilot for a handful of families. It’s national infrastructure, built to serve students wherever they live and however their families already file taxes.
For a lot of parents, that finally answers a question they’ve been asking for years: is there a real way to afford the school that actually fits my child? Starting in 2027, for many families, the answer is yes.
Where the AFC Scholarship Fund Fits
The fund is preparing to serve donors and families in participating states when the program begins on January 1, 2027. Certification decisions belong to the states and to Treasury, not to us.
If you want to follow what your state does this fall, sign up for updates and find out more. The rules are still being written, and we will explain them as they arrive.
No. The credit is designed to be simple: you donate, receive documentation from your SGO, and claim the credit directly on your federal return. It isn't tied to itemizing deductions, though exact forms and instructions will follow official IRS guidance.
Your first $1,700 is matched dollar for dollar as a federal tax credit. Any contribution above that amount is treated as a standard charitable deduction, and there's no cap on total giving.
Yes. You can contribute to a qualified scholarship granting organization in any state, not just your own — one of the features that sets the EFTC apart from most state-level programs.
No. Your gift goes to a qualified scholarship granting organization (SGO) — a nonprofit that manages the funds and distributes scholarships to eligible students. It isn't a direct payment to any single school.
No. It's a new federal credit that runs nationwide, on top of any state-level program that may already exist. If your state already has its own scholarship tax credit, the EFTC doesn't replace it — it adds another way to give.
