Starting Jan. 1, 2027, families in more than thirty states will be able to apply for a federal scholarship that helps cover private school tuition, homeschooling costs, tutoring, special‑education therapies and other education‑related expenses. The program, called the Federal Scholarship Tax Credit, was proposed by the Trump administration and is expected to benefit roughly 96% of schoolchildren in participating states.
How the tax credit works
Taxpayers who donate to a state‑run scholarship organization can claim a federal tax credit equal to the amount of their contribution. Individuals may donate up to $1,700, while married couples filing jointly can claim up to $3,400. The credit is designed to encourage private donations that fund scholarships for families who qualify.
Eligibility and use
Scholarship organizations in each participating state will determine award amounts based on available funds and student need. Children from kindergarten through high school whose families earn up to three times the area’s median income may qualify. The credit can be used for a wide range of expenses, including religious or private school tuition, homeschooling supplies, tutoring, special‑education therapies, books, computers and other costs tied to enrollment or attendance.
Unlike many state voucher programs, the federal plan does not require students to leave public school to receive the scholarship. Public‑school students could apply the funds toward supplemental services such as tutoring or speech therapy. The Treasury Department has not yet released a detailed list of eligible expenses.
Making it easier for low‑income families
Regulators propose that families participating in government assistance programs be allowed to use proof of that participation instead of traditional income documentation. Foster children would also be exempt from income verification, simplifying the application process for some of the most vulnerable students.
State participation
As of mid‑September, the following states have signed on: Alabama, Alaska, Arkansas, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia and Wyoming. Governors in Arizona, Minnesota, Wisconsin and Oregon have announced they will not join, citing concerns that the program could divert resources from public schools. New York’s Democratic governor, Kathy Hochul, has expressed support and is expected to participate.
Potential impact
The Treasury and IRS project that, once taxpayer donations increase, the program could direct nearly $26 billion annually toward an estimated 2.2 million scholarships. Proponents argue the influx of private‑school funding will give families more choice and help address gaps in public‑school services, especially for students who need extra tutoring or speech therapy.
Critics, however, warn that large‑scale voucher programs have contributed to enrollment pressures in public schools in states like Florida and Arizona. They contend that directing federal money to private education could exacerbate funding shortfalls for public‑school districts.
Public comment period
The proposed regulations are open for public comment for 60 days, giving educators, parents and advocacy groups an opportunity to weigh in on the program’s design and implementation.
The Federal Scholarship Tax Credit reflects President Trump’s broader education agenda, which emphasizes parental choice, school‑choice flexibility and reduced federal involvement in local education decisions.
Original reporting: KTBS 3 (Shreveport) — read the source article.
