Federal Tax Credit Bill Has Passed!
On Friday, July 4, President Donald Trump signed legislation that offers the nation’s first national education choice scholarship program.
The signing comes a day after the U.S. House approved the Senate-backed version of the federal budget reconciliation package in time for an Independence Day signing ceremony. Within the bill is what was formerly known as the Educational Choice for Children Act (ECCA), the federal education choice expansion, which includes a dollar-for-dollar federal tax credit on donations made to Scholarship Granting Organizations like APESF.
The information below is subject to change. This page will be updated as additional details become available.
The federal tax credit will be available beginning January 1, 2027 for individuals who donate to Scholarship Granting Organizations (SGOs) like APESF, which provide tuition assistance for K–12 students attending private schools. This program allows donors to receive a dollar-for-dollar credit on their federal taxes, making it a powerful way to support educational choice while reducing your tax liability.
This federal program provides the opportunity to:
Make a donation to a qualified Scholarship Granting Organization (SGO), such as APESF, in a participating state.
Claim a federal income tax credit up to $1,700, per person, reduced by any state-level tax credit received for the same donation.
Carry forward any unused portion of the credit for up to five years, if it exceeds your federal tax liability.
Ensure your donation supports need-based K–12 scholarships through an SGO that meets federal eligibility standards.
Allow students to receive scholarship funds without those funds being counted as taxable income.
Recommend a school, but not an individual student with your donation.
Benefit from a program that has no expiration.
Support students from households earning at or below 300% of the area median gross income, as determined by HUD — which includes approximately 85–90% of K–12 students.
Begin making donations for the 2027 tax year starting in January 2027.
More Scholarships Available – With more donors able to give through a federal tax credit, SGOs like APESF can award more scholarships to more students.
Support for Families in Every State – Even if your state doesn’t offer a school choice program, the federal credit allows SGOs to help families nationwide, not just locally.
Income-Based Fairness – Scholarships funded through this program are need-based, meaning families with lower or middle incomes have priority access to support.
Greater School Choice Access – More funding means more children can attend the school that fits them best – whether it’s faith-based, specialized, or academically rigorous.
No Cost to Families – The program increases support without adding cost or complexity for families – you still apply through APESF!
Consistency and Stability – This federal program has no expiration date, meaning SGOs can continue helping families year after year with reliable, long-term support.
More Ways to Invite Donors – Families now have an additional giving option to share with potential supporters, helping expand the impact of personal networks.
Broader Awareness and Advocacy – National recognition of the program means more people are talking about educational freedom, which helps strengthen support for school choice overall.
Empowers Families Nationwide – Children thrive when families are free to choose the education that best fits their values, needs, and learning styles. This program gives more families real options — regardless of income or ZIP code.
Extends Arizona’s Leadership in School Choice – Arizona has long been a national leader in educational freedom. This federal program allows our state to help set the standard for how local innovation can shape national policy.
Protects State and Local Control – It respects state, school, and family autonomy – including homeschool protections.
Delivers a Lifeline to Students in Restrictive States – Many families live in states that refuse to adopt school choice policies. This program offers these children a path to educational opportunity – no matter their state’s political stance.
Encourages Private Support for Public Good – Through a federal tax credit, individuals can invest directly in education while receiving meaningful tax relief. This creates a sustainable, non-government funding model for educational opportunity.
Supports Educational Equity Without New Spending – The program helps low- and middle-income families access to private education without increasing federal education spending, making it a fiscally responsible solution.
Builds Momentum for a National Education Freedom Movement – A successful federal tax credit signals broad public support for school choice and can open the door for future reforms that expand opportunity for all students.
