Tax information for federal, state and local governments

Recent developments

Changes to guidance, law and procedures that affect federal, state and local governments.

Federal Scholarship Tax Credit for Donations to Scholarship Granting Organizations (Internal Revenue Code section 25F)

Beginning Jan. 1, 2027, individual taxpayers may be able to claim a Federal Scholarship Tax Credit, commonly known as the Education Freedom Tax Credit, for up to $1,700 for charitable contributions of cash to certain public charities that grant scholarships for qualifying educational expenses (Scholarship Granting Organizations, or SGOs). A state or the District of Columbia (state) must choose to participate and provide a list of SGOs in that state to the IRS before an individual taxpayer can contribute to an SGO within that state and claim the tax credit.

The IRS will be launching a new online portal for states to submit their SGO lists for the 2027 calendar year.

In preparation for the launch of the State Portal this fall, the IRS is verifying the point of contact each electing state provided when they submitted their Form 15714, Advance Election to Participate under Section 25F.  Establishing and maintaining a current point of contact is important to allow the IRS to keep each electing state informed as the launch date for the State Portal approaches. A state can use Form 15714 to update the state’s point of contact, submitting it as described in the instructions.

To date, 30 states have elected to participate in the Federal Scholarship Tax Credit. States that have not yet elected to participate may still do so by submitting Form 15714 as described in the Instructions. Doing so now will give the IRS contact information to allow the IRS to keep new electing states informed of important developments.

Participating states for 2027 under Section 25F