Between enactment and the program’s actual launch, a lot happens, mostly out of public view. Here is the dated roadmap, so donors, families, and Scholarship Granting Organizations (SGOs) know exactly where things stand and what’s still ahead.
July 2025 — Enactment
The Education Freedom Tax Credit (EFTC) was created as part of the One Big Beautiful Bill Act, adding a new federal tax credit for donors and a corresponding income exclusion for the students who receive scholarships.
Late 2025 — Rulemaking opens
The IRS issued formal notice opening rulemaking and requesting public comment on state certification, SGO requirements, donor substantiation, and income verification. Shortly after, Treasury and the IRS released the procedure and form that let states pre-commit to participating in 2027 through an advance election.
Throughout 2026 — States elect in, and guidance takes shape
Starting January 1, 2026, states have been able to file an advance election declaring their intent to participate in 2027. By early June 2026, dozens of states had completed that formal election, a number distinct from the larger count of states that have announced intent but not yet filed. On June 10, 2026, Treasury previewed the forthcoming proposed regulations, covering the 90% spending test, multistate operations, income verification, audits, and the donor-number reporting system. Full regulations are expected no later than the end of September 2026.
For this first program year, the usual calendar bends slightly. Rather than a strict January 1 deadline, the law directs states to submit their list of qualifying SGOs “as early as practicable” for the 2027 startup year, recognizing that this is a new program getting off the ground. In future years, the list is due by January 1.
January 1, 2027 — The credit goes live
Cash contributions made on or after this date to a qualifying SGO in a participating state can generate the federal credit. Donors anywhere in the country can give to an SGO in any participating state; the credit follows the SGO’s state, not the donor’s home address.
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.
Early 2028 — The first filing season
Donors claim their 2027 credits when filing their 2027 federal returns. The credit is non-refundable and capped at $1,700 (Treasury rules pending) per return, with unused amounts carrying forward for up to five years. The specific IRS form for claiming the credit is expected to be published ahead of that filing season.
After that — An annual cycle
Each year, states decide anew whether to participate, submit their SGO lists, SGOs raise and award funds throughout the year, and donors claim credits the following spring. A state that sits out one year remains free to join in a future year, and the reverse is also true.
Knowing this calendar matters most for one practical reason: patience now sets up real scholarships in 2027. There is meaningful groundwork happening in 2026, even though no donation yet qualifies for the credit until January 1, 2027. Groundwork organizations like AFC Scholarship Fund are already doing so they’re ready on day one.
January 1, 2027. Cash contributions made on or after that date to a qualifying SGO in a participating state can generate the credit.
On the federal return for the 2027 tax year, generally filed in early 2028.
The law has no scheduled end date, but each state decides annually whether to participate, and Congress could change the credit through future legislation. As of today, it remains on track for its January 2027 launch.
This article is for informational and educational purposes only and does not constitute tax, legal, or financial advice. Tax laws are subject to change. Please consult a qualified tax professional regarding your individual circumstances. The Education Freedom Tax Credit is effective January 1, 2027.
