TL;DR
- §25F does not define its own expense list. It defines a qualified elementary or secondary education expense by reference to IRC §530(b)(3)(A), the same list used for Coverdell education savings accounts.
- The core list covers tuition and fees, academic tutoring, special-needs services, books, supplies, and equipment at a public, private, or religious K-12 school.
- It also reaches computer technology, equipment, and internet access for the student and family, and, in narrower circumstances, room and board, uniforms, transportation, and school-provided supplementary services.
- Because eligibility is student-based, not school-based, this list can apply to a public-school student, a homeschooled student, or a private-school student alike, subject to state law and the SGO's own policies.
- Each Scholarship Granting Organization (SGO) chooses which of these federally permitted categories it actually funds. The statute sets the ceiling; the SGO sets what it will pay for.
Most descriptions of the federal Education Freedom Tax Credit (also called ECCA or the Federal Scholarship Tax Credit, FSTC) treat it as a private-school tuition program. That is one use of scholarship funds, not the definition of the program. §25F borrows its expense list wholesale from an existing statute, and that list is considerably broader than tuition.
How §25F defines a qualified expense
§25F(c)(4) is short: a “qualified elementary or secondary education expense” is “any expense of an eligible student which is described in section 530(b)(3)(A).” Rather than writing a new definition, Congress pointed to the expense list already used for Coverdell education savings accounts (§530), a decades-old savings vehicle for K-12 and college costs. You can read the full text of §25F and the §530(b)(3) expense text directly.
This matters because a §530 expense is not the same as a §529 college-savings expense or a state ESA's own expense list. Each of those programs defines “qualified expense” separately, and they do not automatically line up. Do not assume something allowed under a state ESA, or under a §529 plan, is automatically allowed under §25F. §25F's authority is §530(b)(3)(A), full stop.
The core list: tuition, tutoring, books, special-needs services
§530(b)(3)(A)(i) covers expenses “incurred in connection with the enrollment or attendance” of the student as a K-12 student at a public, private, or religious school:
- Tuition and fees
- Academic tutoring
- Special needs services, for a special-needs student
- Books, supplies, and other equipment
This is the plainest, least ambiguous part of the list, and the part every SGO that funds anything at all is likely to fund. “Fees” is broad enough that many SGOs and families treat standardized testing fees (SAT, ACT, AP, state assessments) as falling within it, though the statute does not name testing fees individually, so confirm the specific fee with your SGO rather than assuming.
Room, board, uniforms, and transportation (a narrower category)
§530(b)(3)(A)(ii) adds a second category that is easy to over-read:
- Room and board
- Uniforms
- Transportation
- Supplementary items and services, including extended-day programs
Computers, internet access, and technology
§530(b)(3)(A)(iii) covers “the purchase of any computer technology or equipment or Internet access and related services,” for use by the student and the student’s family during any year the student is in school. §530(b)(3)(C) further defines “computer technology or equipment” to include computer software, computer or peripheral equipment, and fiber-optic cable related to computer use.
The one written carve-out: software designed for sports, games, or hobbies does not qualify, “unless the software is predominantly educational in nature.” A laptop, home internet service, and educational software are squarely inside the list; a general-purpose game console is not.
Public-school students can qualify too
Because the §530(b)(3)(A) list is not written around private-school tuition, and §25F eligibility itself turns on the student, not the school, a student enrolled in a public school and living in an income-eligible household can, in principle, receive scholarship support for tutoring, special-needs services, technology, and test fees, without transferring anywhere. See EFTC for public-school students for the full argument, and scholarship eligibility for the income and enrollment tests themselves. Today, most SGOs still fund mainly private tuition because they grew out of older state tuition-scholarship programs, not because federal law confines them there.
Homeschool and microschool families
§530(b)(3)(A) ties expenses to enrollment or attendance at a “school,” and §530(b)(4) defines “school” as any school providing K-12 education “as determined under State law.” Whether homeschooling counts as school attendance for this purpose is therefore a state-by-state question, not a single national answer. Some states have homeschool statutes that satisfy this; some effectively fold homeschooling into private-school law; others do not formally treat it as school enrollment at all. Curriculum, tutoring, and technology can be covered where the state and the SGO recognize the model; transportation and uniforms are a weaker fit outside a school setting for the reason described above. Read EFTC for homeschool and microschool families and the state-by-state homeschool breakdown before assuming your state works the way a neighboring state does.
Services for students with disabilities
“Special needs services in the case of a special needs beneficiary” sits in the same clause as tuition and tutoring, meaning it is one of the core, directly-named categories, not an edge case. In practice this has covered occupational, physical, behavioral, and speech-language therapies, assistive technology, and specialized instruction. A formal diagnosis or IEP is not a federal §25F eligibility requirement, though many SGOs prioritize special-needs applicants or run dedicated funding streams for them. See EFTC for special-needs families for the full picture, including how using a scholarship interacts with IDEA and IEP rights.
What is not a qualified expense
The statute is a list of enumerated categories, not a general education-spending account, so expenses outside those categories, or outside the “required or provided by the school” qualifier in clause (ii), are a weak fit. SGOs and the eventual Treasury regulations will draw finer lines, but based on the statutory text alone, expect these to fall outside the list:
- Family trips or outings framed as “field trips”
- General-purpose consumer electronics or gaming software not predominantly educational
- Everyday clothing or transportation the school does not require or provide
- Food, outside a school-required room-and-board arrangement
- Medical-only treatment unrelated to a child’s education, or durable medical equipment for non-educational use
None of these categories appear in §530(b)(3)(A), and an SGO that funded them would risk its own compliance with §25F(d)(1)(C), which bars scholarships for “any expenses other than qualified elementary or secondary education expenses.”
Who actually decides what's covered
§530(b)(3)(A) sets the federal ceiling, the outer boundary of what a §25F scholarship is legally allowed to fund. It does not require any single SGO to fund every category on the list. Each Scholarship Granting Organization sets its own covered-expense policy within that ceiling, some fund tuition only, others apply the list broadly. Before assuming a specific expense, tutoring, a laptop, a therapy, homeschool curriculum, is covered, confirm it directly with the SGO you are applying through. You can estimate your household's eligibility first with the scholarship eligibility calculator.
A reminder on the program itself: the federal credit is capped at $1,700 per taxpayer per year, eligibility requires household income at or below 300% of area median gross income, and the credit applies to taxable years ending after December 31, 2026, meaning scholarships cannot be funded before January 1, 2027. See scholarship eligibility for the full rules.
Frequently asked questions
What does the Education Freedom Tax Credit cover?
§25F does not write its own list of covered expenses. It defines a “qualified elementary or secondary education expense” by reference to IRC §530(b)(3)(A), the same expense list used for Coverdell education savings accounts. That list covers tuition and fees, academic tutoring, special-needs services, books, supplies and equipment, and, in narrower circumstances, room and board, uniforms, transportation, and computer technology and internet access.
Can an EFTC scholarship pay for tutoring?
Yes. Academic tutoring is named directly in §530(b)(3)(A)(i), the same clause that covers tuition and fees. It is one of the clearest, least ambiguous categories on the list.
Can an EFTC scholarship pay for a computer or internet access?
Generally yes. §530(b)(3)(A)(iii) covers computer technology or equipment and internet access and related services, for use by the student and the student's family during the school years. The one carve-out: software designed for sports, games, or hobbies does not count unless it is predominantly educational.
Can an EFTC scholarship pay for homeschool curriculum?
Often, but it depends on your state. §530(b)(3)(A) ties expenses to enrollment or attendance at a “school,” and “school” is defined by §530(b)(4) as whatever counts as a K-12 school “as determined under State law.” States differ on whether homeschooling qualifies as school attendance for this purpose. See our state-by-state homeschool breakdown before assuming your state's rules line up with a neighboring state's.
Is an EFTC scholarship only for private-school tuition?
No. That is the most common misconception about the program. Tuition is one category on the §530(b)(3)(A) list, not the whole list, and eligibility itself is tied to the student and household income, not to attending a private school. A public-school student from an income-eligible household can, in principle, receive scholarship support for tutoring, special-needs services, technology, and test fees.
Does a §25F scholarship cover services for a student with a disability?
Yes. §530(b)(3)(A)(i) explicitly lists “special needs services in the case of a special needs beneficiary” alongside tuition and tutoring. A formal diagnosis or IEP is not required for federal §25F eligibility itself, though individual SGOs may prioritize special-needs applicants.
Can a scholarship pay for transportation or a school uniform?
Only in a narrower circumstance than most people assume. §530(b)(3)(A)(ii) covers room and board, uniforms, transportation, and supplementary items and services, but only when those items are “required or provided by” the school in connection with the student's enrollment or attendance there. A family's everyday commute or an off-the-shelf backpack is not automatically a qualified expense just because the student is enrolled somewhere.
Who actually decides which expenses my scholarship can be used for?
The federal statute sets the outer boundary, but each Scholarship Granting Organization (SGO) decides which of the federally permitted expense categories it actually funds. Some SGOs fund only tuition; others apply the full §530(b)(3)(A) list, including tutoring, technology, and special-needs services. Ask your SGO directly which categories it covers before assuming any one is included.
