
Tax Credit vs. Tax Deduction: What’s the Difference—and Why It Matters
Tax credits and tax deductions aren’t the same. Learn the key differences, how each affects your tax bill, and why the Education Freedom Tax Credit matters.
Tommy Schultz is the CEO of the American Federation for Children (AFC), the nation's largest school choice advocacy organization dedicated to empowering families — especially lower-income families — with the freedom to choose the best K-12 education for their children.
Under his leadership, AFC has helped advance school choice legislation in over a dozen states and launched the AFC Scholarship Fund, a federally qualified Scholarship Granting Organization built to serve donors and students through the Education Freedom Tax Credit.

Tax credits and tax deductions aren’t the same. Learn the key differences, how each affects your tax bill, and why the Education Freedom Tax Credit matters.

The Education Freedom Tax Credit allows taxpayers to receive a dollar-for-dollar federal tax credit—up to $1,700 per taxpayer—when they donate to a qualified scholarship granting organization (SGO). Those donations are then used to provide private K–12 scholarships to families, helping students access the education that’s right for them.

For most people, the answer feels inevitable. Taxes go in; government programs come out, and individual taxpayers rarely get a say where their dollars actually land.
But a new federal policy—the Education Freedom Tax Credit (EFTC)—challenges that assumption in a subtle but powerful way. It doesn’t ask Americans to give more. It asks them to choose differently.

At five o’clock in the morning, most teenagers are asleep. Bo Bassett is already working. Before the sun rises over Johnstown, Pennsylvania, Bo has finished his first workout of the day. By the time his classmates arrive at school, he’s already trained his body and sharpened his focus—because for Bo…

The Federal Scholarship Tax Credit (FSTC) introduces a new idea: the ability to direct some of those dollars toward K–12 education—specifically, scholarships for students.

What’s the Difference and Why It Matters to You.