Treasury Department / IRS · expected by end of September 2026
Proposed Regulations under §25F
Not yet published
After Notice 2025-70's comment period, Treasury will publish proposed regulations covering the 90% spending test, multistate SGOs, income verification, audits, and donor reporting. Treasury previewed the framework on June 10, 2026, see the Guidance Preview document, leaving joint-filer cap treatment and AMT coordination among the items still to be settled in the published rule.
Expected:No later than the end of September 2026 (per Treasury's June 10, 2026 announcement); reliable for tax year 2027
Following IRS Notice 2025-70 (which closed for public comment on December 26, 2025), Treasury and the IRS will issue proposed regulations to implement §25F. On June 10, 2026, Treasury committed to publishing them no later than the end of September 2026 and said states, SGOs, and taxpayers will be able to rely on them for tax year 2027. Treasury also previewed much of their content, see the full text of the guidance preview. Based on that preview, the proposed regulations are expected to address:
- The 90% spending test, measured against total receipts, with a segregated-account safe harbor (applied per state-specific account for multistate SGOs)
- What “located in” a state means, and a path for multistate SGOs (separate §25F account per state)
- The definition of “school” (consistent with §530, including home schools recognized under state law and tribal schools)
- Income verification methodology for the 300% AMGI threshold (direct documentation, categorical eligibility, foster-child safe harbor)
- Annual audit requirements (independent third party, with a streamlined internal-committee option for smaller SGOs)
- Donor substantiation via a unique-donor-number acknowledgment and IRS matching system
- A planned IRS portal for SGO administration and reporting
Items the preview did not resolve, and that remain to be settled in the published rule or later guidance:
- Joint-filer cap treatment ($1,700 vs. $3,400 question)
- AMT coordination for the §25F credit
- State SGO-list deadline mechanics for the 2027 startup year
- Trust and estate eligibility for the credit
- Scope of eligible expenses under §530 (tutoring, special-needs services), a separate workstream to follow the §25F regulations
This page will be updated with the verbatim regulatory text and a plain-English summary as soon as Treasury publishes the proposed regulations.
