Treasury Temporary Regulations under §25F, T.D. 10057 (State Elections, SGO Lists, and SGO Registration, October 2026)

“An organization is located in a State if the organization is authorized to do business in the State and is in compliance with the generally applicable State laws and requirements for charitable organizations in the State, including provisions for transparency, accountability, and fraud prevention.”

A cash contribution by an individual to an SGO, to the extent the donor designates it as a qualified contribution at the time of the gift, less the value of any goods or services provided. Cash includes checks, money orders, electronic transfers including card payments, and after-tax payroll deduction in U.S. dollars, and excludes digital assets.

A single-State SGO is on one covered state’s SGO list; a multistate SGO is on more than one. A multistate SGO’s donors can direct their gift to its §25F segregated account for one or more of the states that list it.

An organization that plans to solicit qualified contributions must register electronically in the IRS SGO portal, “as soon as possible and preferably before the organization appears on any State SGO list.” It provides its name, EIN, address, telephone number, year of formation, a contact person, and its taxable year. The IRS reviews the submission and provides instructions for creating a unique donor number in a uniform format used by all SGOs. The SGO also uses the portal to authorize its listing on the IRS SGO list.

For each calendar year, the SGO gives each donor a timely written acknowledgment with its EIN, the donor’s total designated qualified contributions, the unique donor number, whether any goods or services were provided, and a description and good-faith value of any that were. It is due by January 31 of the following year and may be delivered electronically if the donor consents.

For each unique donor number, the SGO reports the donor’s name and address and the year’s total qualified contributions, by February 28 of the following year, through the IRS SGO portal.

A participating state registers in an IRS State section 25F portal using a special-purpose EIN the IRS will assign or explain how to obtain. The governor, or whoever state law designates to make elections on federal tax benefits, may authorize up to two designated officials, each of whom must be an elected official, the Director of Taxation, or an appointed state official. The IRS says it is considering temporary alternative procedures for the first year so every state that wants to participate can register or otherwise submit its election and list.

“The State election is made only for a single calendar year, and all the requirements in this paragraph (c) must be satisfied for each year for which an election is made.” Treasury does not read §25F to allow revocation once a year’s election is completed, including a perfected advance election. A state that files an advance election and then does not submit its list is, in effect, out for that year.

For 2027, a state must submit an advance election on Form 15714 on or before January 1, 2027, and may perfect it by providing its SGO list on or before February 15, 2027. A first-year state cannot make its election just by submitting a list. If an advance election is not perfected in time, “no organization in that State would qualify as an SGO for the calendar year.” The IRS will publish the list of states that have made advance elections.

After 2027, an advance election is submitted through the portal between January 2 and September 30 of the preceding year, and is perfected by providing the SGO list between October 1 of the preceding year and January 1 of the election year. A state may also elect by submitting its list in that October 1 to January 1 window. “On or before January 1” means up to 11:59 p.m. on January 1, to accommodate a newly inaugurated governor. A state electing for the first time after 2027 follows future guidance.

The state certifies the authority of whoever makes the election (with the enabling law if it is not the governor), provides information and certifications for each listed SGO, describes any state tax credit for SGO contributions, and certifies that its list “includes every organization located in the State” that seeks inclusion and meets the requirements. For each SGO it certifies location in the state, a §25F segregated account with complete books, the operational requirements, whether the SGO is single-State or multistate, and review of the SGO’s audit and IRS filings.

For an organization without operating history, the state may rely on its governing documents, written policies and procedures, and other documentation, after determining that they expressly require compliance and show the ability and intent to comply. A state may also list organizations whose 501(c)(3) applications are pending, but only if it lists every pending applicant seeking inclusion, reviews each under the transition rule, and certifies that the exemption, if granted, will be effective on or before January 1 of the list year. The IRS adds them to the IRS SGO list once exemption is recognized and the organization consents.

A state may add to or replace its list until the deadline for completing the year’s election; later additions wait for the next year’s list. It may remove an SGO at any time, but only through a procedure providing due process, on a finding that the organization is not located in the state or does not meet the requirements, and must notify the IRS. An SGO that asks to be removed must be removed. The state certifies that its procedures before and after removal are fairly administered and afford due process.

A state must require SGOs to meet generally applicable charity rules and must also require applications, documentation, and financial reports reasonably tailored to the federal tests and to preventing fraud, including duplicate awards. But under the heading “Prohibition on additional State requirements or discretionary exclusions”:

“A State may not require SGOs to operate in a manner that is more restrictive than the requirements set forth in section 25F(c)(5), such as by limiting the type of school that scholarship recipients may attend or the types of qualified elementary or secondary education expenses for which scholarship funds may be used.”

State procedures are subject to federal review, and on finding a pattern of irregularities the IRS may require a state to change them.

The IRS publishes, on irs.gov, each SGO on a covered state’s list that has authorized disclosure. A removed SGO is shown in strike-through text with its removal date. The IRS removes an SGO that loses 501(c)(3) public-charity status, may remove one for failing §25F or reporting requirements (with review available from the IRS Independent Office of Appeals), and removes it from a state’s part of the list when that state removes it. A multistate SGO removed by one state stays listed for the others if it still qualifies there.