TL;DR

  • There is no federal tax credit for paying your own child’s private school tuition.
  • The 2025 tax law created a $1,700 federal tax credit for donors who give to scholarship granting organizations (SGOs). The SGOs turn those gifts into K-12 scholarships that can pay private school tuition.
  • Scholarships go to students in households at or below 300% of area median income, in states that participate. That covers most families.
  • Parents can donate and claim the credit too, but they can’t earmark the gift for their own child.
  • It starts January 1, 2027. Separately, a 529 plan can now pay up to $20,000 a year of K-12 costs tax-free.

The short answer

If you are searching for a federal private school tax credit because you pay tuition, the honest answer is that federal law does not give you one. There is no federal credit or deduction for tuition you pay for your own child at a K-12 private school.

What people are usually hearing about is the Education Freedom Tax Credit, also called the Federal Scholarship Tax Credit or §25F, created by the One Big Beautiful Bill Act in July 2025. It does help pay private school tuition, but indirectly: the tax credit goes to donors, and the money reaches families as scholarships.

How the $1,700 credit pays for tuition

  1. A taxpayer donates cash to a scholarship granting organization on a participating state’s list and designates the gift as a §25F contribution.
  2. The donor gets a federal tax credit of up to $1,700 ($3,400 on a joint return when each spouse gives, under Treasury’s proposed rules). A credit cuts the tax owed dollar for dollar, so if you owe at least that much federal tax, a $1,700 gift costs you nothing. How donors claim it.
  3. The SGO awards scholarships to eligible K-12 students. At least 90% of its income has to go to scholarships.
  4. The scholarship pays education costs: tuition, fees, books, supplies, tutoring, uniforms, transportation and the other expenses that §530 lists, at a public, private, or religious school.
The credit is not limited to private schools. The same scholarships can pay qualifying costs for students in public school, such as tutoring or special needs services. What it means for public-school students.

How a family gets a scholarship

  • Check that your state participates. Scholarships funded by the credit reach only students who live in a participating state. See your state.
  • Check income. The household must be at or below 300% of the area median gross income, and the student must be eligible to enroll in a public school. Three times the local median income is a high bar, so most families qualify. Eligibility in detail.
  • Apply to an SGO on your state’s list. The SGO verifies income and decides the award. It must fund at least 10 students who do not all attend the same school, so one school’s families can’t be its only recipients. Find SGOs by state.
  • The SGO pays the school or a vendor, or reimburses you, for qualifying costs, with records for each payment.

Can parents give and claim the credit?

Yes. A parent can donate to an SGO and claim the $1,700 credit like any other taxpayer. What the law forbids is earmarking: an SGO may not set aside a contribution for any particular student, so a parent cannot route their gift to their own child’s scholarship.

A child of a donor is not automatically barred from receiving a scholarship from the same SGO. The limit is the substantial-contributor rule in Treasury’s proposed regulations: a donor who gives more than $5,000 in the SGO’s year, if that is also more than 2% of what the SGO received, is a disqualified person, and the SGO cannot award scholarships to that donor’s children or other listed relatives. What donors can and can’t direct.

The other federal change: 529 plans

The same 2025 law made a separate change that does reach your own child’s tuition. A 529 plan can pay K-12 tuition tax-free, and the law raised the annual limit on K-12 withdrawals from $10,000 to $20,000 per beneficiary and added expenses such as curriculum, tutoring and test fees. A 529 is savings for your own child, and its federal tax treatment doesn’t depend on your state participating in the scholarship credit. The credit, 529 plans and Coverdell accounts compared.

State private school tax credits

Many states run their own private school choice programs: state tax-credit scholarships, education savings accounts and vouchers, and some give parents a state credit or deduction for tuition. Those are separate from the federal credit, with their own rules and deadlines. A gift that earns a state scholarship credit can also be a federal §25F gift; under Treasury’s proposed rules the state credit comes off first, before the $1,700 cap. How state programs and the federal credit stack.

When it starts

Gifts made on or after January 1, 2027 earn the credit, and donors claim it on their 2027 returns, on Form 8525. States decide every year whether to participate. The IRS's published list names 30 states (as of September 14, 2026), and our tracker counts 31: those 30 plus New York (announced October 9, 2026), where the governor has decided to participate but the advance election is not on the IRS list yet.

FAQ

Is there a federal tax credit for private school tuition?

Not for tuition you pay yourself. Federal law has no credit or deduction for paying your own child's K-12 private school tuition. What the 2025 tax law (the One Big Beautiful Bill Act) created is a credit of up to $1,700 for people who donate to scholarship granting organizations (SGOs), which then award K-12 scholarships that can pay private school tuition. It is called the Education Freedom Tax Credit, the Federal Scholarship Tax Credit, or §25F, and it starts January 1, 2027.

Who can get a scholarship for private school under the new federal credit?

A K-12 student who is eligible to enroll in a public school and whose household income is at or below 300% of the area median gross income, and who lives in a state that participates. Families apply to a scholarship granting organization on their state's SGO list; the SGO checks income and makes the award. The scholarship can also pay qualifying costs for students who attend public school.

Does the $1,700 credit go to parents?

It goes to whoever donates. Parents can donate and claim the credit like anyone else, but the gift cannot be earmarked for their own child. Families receive scholarships, not the credit. A parent who gives more than $5,000 to an SGO in a year, when that is also more than 2% of what the SGO received, becomes a disqualified person, and that SGO cannot then award scholarships to their children.

Is this the Big Beautiful Bill's school choice tax credit?

Yes. The One Big Beautiful Bill Act (P.L. 119-21), signed July 4, 2025, created the federal scholarship tax credit in section 70411, codified at Internal Revenue Code §25F. The same law separately raised the annual limit on 529 plan withdrawals for K-12 expenses from $10,000 to $20,000.

Can I use a 529 plan for private school?

Yes. A 529 plan can pay K-12 tuition tax-free, and the 2025 law raised the annual limit on K-12 withdrawals from $10,000 to $20,000 per beneficiary and added expenses such as curriculum, tutoring and test fees. A 529 is savings for your own child; the scholarship credit funds other families' children. A family can use both, as long as the same expense is not paid twice.

Does my state have to opt in?

For scholarships, yes. Students can receive scholarships funded by the credit only if their state participates, because SGOs must be on a participating state's list and serve students who live there. Donors can claim the credit wherever they live, by giving to an SGO in any participating state.

When can I get a private school scholarship from the federal credit?

Donations that earn the credit start January 1, 2027, so SGOs can begin awarding §25F-funded scholarships after they receive those gifts. Each SGO sets its own application window. Check your state's page and its SGO list for timing.