How the EFTC Works

The Education Freedom Tax Credit

Starting in 2027, a new federal tax credit lets eligible donors fund a scholarship for a child and claim up to $1,700 back, or $3,400 for married couples filing jointly, dollar for dollar. Here’s exactly how it works.

Check My Eligibility

Make a Donation

Starting in 2027, make a charitable contribution to a qualified SGO like the AFC Scholarship Fund.

AFC Issues a Scholarship

The SGO awards a scholarship to a student who needs it.

A student gets funded

Funds help cover real education costs — tuition, tutoring, books, and more — putting educational opportunity within reach.

Up to $3,400 Tax Credit

Eligible donors can claim a dollar-for-dollar federal tax credit: up to $1,700 for individuals, or $3,400 for married couples filing jointly.

VIDEO OVERVIEW

Illustration representing a taxpayer contributing to K-12 scholarships through the Education Freedom Tax Credit

What Is the Education Freedom Tax Credit?

The first federal school choice tax credit in American history allows eligible taxpayers to give to a qualified scholarship organization and reduce their federal tax bill dollar-for-dollar. Here’s everything donors need to understand before they give.

Illustration of a taxpayer donating to a Scholarship Granting Organization

How the Education Freedom Tax Credit Works: A Step-by-Step Guide

Five steps from first dollar to federal tax credit. Here’s the complete, plain-English breakdown of how the EFTC works — and what donors need to do to make the most of it.

Illustration of a donor's calendar marking key EFTC dates from 2027 donation to 2028 filing

What Happens After I Donate? Your EFTC Timeline from Gift to Tax Filing

You’ve heard about the Education Freedom Tax Credit. You’re ready to give. But what happens next? Here’s every step — from writing the check to seeing the credit on your tax return.

Who Can Fund a Scholarship? 172 Million Taxpayers Can Give Through the Education Freedom Tax Credit

I find that 172 million taxpayers, nearly three of every four people who file a federal return, can give to a scholarship granting organization and claim a dollar-for-dollar credit under Education Freedom Tax Credit (EFTC) starting in 2027. In contrast to the rules on student eligibility which require that students live in states that have opted in to the EFTC, donors face no such restriction. Any taxpayer with federal tax liability is eligible to give and receive a dollar-for-dollar federal tax credit: up to $1,700 for individuals, or up to $3,400 for married couples filing jointly. As of September 2026, 31 states have opted in or signaled their intent to opt in to the EFTC. The catch for those remaining 19 states plus D.C. is that eligible donors in those states can still make donations for scholarships, but only to scholarship granting organizations (SGOs) in states that have already opted in.

The Education Freedom Tax Credit: The Complete 2027 Guide

Starting January 1, 2027, Americans will be able to do something they've never been able to do before: donate to a scholarship granting organization that funds K-12 scholarships and receive a dollar-for-dollar federal tax credit.

The Education Freedom Tax Credit Starts at $1,700. Your Impact Doesn’t Stop There

Ask most people what they know about the Education Freedom Tax Credit (EFTC) and you'll hear one number: $1,700. It shows up in headlines, ads and donation pages across the industry, and it's often the first thing people learn about this federal scholarship tax credit.

Find out if you qualify for the Education Freedom Tax Credit

Check now for free

K-12 Scholarships for Military Children: How the Two-State Rule Works

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K-12 Special Education Scholarships: A State-by-State Guide

A common argument against school choice is that private schools would leave children with disabilities behind. But groundbreaking new research says the opposite is happening.

Married Couples and the Education Freedom Tax Credit: Two Credits, Billions More for Kids

Treasury’s new guidance means both spouses can claim the Education Freedom Tax Credit. Here’s why that matters for kids.

U.S. Department of the Treasury building, source of new Education Freedom Tax Credit guidance

Treasury’s Education Freedom Tax Credit Guidance Explained

The U.S. Department of the Treasury released new guidance for the new federal Education Freedom Tax Credit. There is a lot of good news to report — here’s what it means in plain English.

Illustration of a tutor helping a child with schoolwork, with icons of a US map, question marks, and a school building symbolizing nationwide education support

EFTC State Tracker: Which States Have Opted In

See which states have opted in to the Education Freedom Tax Credit for 2027. Updated monthly with every state's status and what it means for you.

How Do I Donate to an SGO? The 5-Step Guide

Giving to a Scholarship Granting Organization takes a few minutes. Getting the details right is what makes your gift count toward the Education Freedom Tax Credit (EFTC). Here's exactly how it works.

Start With the Education Freedom Tax Credit. Then Go Further

Most people don't think of themselves as philanthropists. The word sounds like it belongs to someone with a building or monument named after them.

Strategic Giving and the Education Freedom Tax Credit: Find the Bottleneck Your Gift Can Remove

Every serious donor eventually asks the same question: where will my gift make the biggest difference?

The Education Freedom Tax Credit (EFTC) is a new federal tax credit that rewards taxpayers who donate to qualified scholarship granting organizations (SGOs). Here’s how it works. Give to a qualified Scholarship Granting Organization (SGO) and receive a dollar-for-dollar federal tax credit: up to $1,700 for individuals, or up to $3,400 for married couples filing jointly. You give first; the credit reduces your federal tax bill when you file. The EFTC takes effect January 1, 2027.

The AFC Scholarship Fund is a nonprofit scholarship granting organization (SGO) created to make the Education Freedom Tax Credit work on a national scale. It is affiliated with the American Federation for Children (AFC), the nation’s largest school choice organization. Our mission is to connect donors to students, making it as simple as possible for families to access the education that’s right for their children.

Here’s the process, step by step:
Step 1: You make a charitable contribution to a qualified scholarship granting organization (SGO).
Step 2: That contribution generates a dollar-for-dollar federal tax credit: up to $1,700 for individuals, or up to $3,400 for married couples filing jointly.
Step 3: The credit reduces what you owe the IRS when you file your federal taxes.

The EFTC is not a deduction. It is a direct reduction of your federal tax liability. You donate first; the credit follows at filing. The tax credit launches January 1, 2027.

Many charitable donations qualify for a tax deduction. These tax deductions simply reduce your taxable income, which means the actual savings are a fraction of what you gave.

For example, if you’re in the 24% tax bracket and claim a $1,700 deduction, you save about $408. That’s it.

A tax credit, on the other hand, reduces your actual tax bill, dollar for dollar. If you donate $1,700 to a qualified scholarship granting organization (SGO) and owe $2,000 in federal taxes, you now owe $300. Your tax liability decreases by $1,700, not $408.

Your state’s participation status does not affect your ability to claim the federal Education Freedom Tax Credit. The EFTC is a federal benefit. What matters is that the SGO you donate to is a qualified organization. Donors can contribute to SGOs in any participating state and still receive the federal credit, regardless of where they live. If your state has not opted in, you can still donate to a qualified SGO. Your federal credit applies all the same.

If your credit is more than you owe in federal taxes for the year, the unused amount can generally carry forward for up to five years.

The Education Freedom Tax Credit launches January 1, 2027, but families are counting on scholarship infrastructure being in place from day one. When donors register their interest now and commit early, they help scholarship granting organizations build the capacity to serve families quickly when the tax credit takes effect. Early participation also helps ensure that lower-income families, who need these scholarships most, have access from the start.

Approximately 90% of American students are eligible to receive EFTC scholarships through a qualified scholarship granting organization (SGO). Eligibility is based on household income relative to local area median income. Scholarships become available starting in 2027 when the Education Freedom Tax Credit takes effect.

If you’re wondering whether your family qualifies, register your interest and we’ll help you find out.

Scholarship applications are processed through scholarship granting organizations (SGOs) like the AFC Scholarship Fund. The tax credit takes effect on January 1, 2027.

Be Ready on Day One

The Education Freedom Tax Credit launches in 2027. Join the list and we’ll tell you the moment you can fund a scholarship and claim your federal tax credit.

Education Freedom Signup

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