Bills in both chambers would drop the state opt-in from §25F and write a $3,400 joint cap into the law

Rep. Adrian Smith of Nebraska introduced two §25F bills on September 16, 2026, with Reps. Burgess Owens (R-UT) and Tim Walberg (R-MI), chairman of the House Education and Workforce Committee, as cosponsors. Both went to the Ways and Means Committee. Sen. Bill Cassidy (R-LA), one of the provision's Senate authors, filed the Senate versions the next day, and both went to the Finance Committee. Smith's office calls the pair the “Educational Opportunities Expansion Package.” The American Federation for Children, EdChoice, Agudath Israel of America, the Invest in Education Coalition and the Federal Scholarship Tax Credit Coalition Steering Committee endorsed it. Rep. Julia Letlow (R-LA) is also listed as a cosponsor of the joint-return bill.

The opt-in bill: H.R. 10412 and S. 5421. Today a gift earns the credit only if the organization is on the list a participating state sends the IRS. The bill text deletes that machinery from §25F. It strikes the definition of a “covered State,” removes the requirement that a scholarship granting organization appear on a state's list, and repeals subsection (g), the section that has governors elect in and send the Secretary a list of qualifying organizations. Where the statute now says an organization's scholarships must go to students “solely within the State in which the organization is listed,” the bill substitutes “located.” The change would apply as if it had been part of the original 2025 law.

In practice, a qualifying 501(c)(3) in any state, including the 20 states and DC that are not on the IRS's list of 30, could take gifts that earn the federal credit, as long as it meets the federal requirements in subsection (d) and funds students in its own state. The state's role would disappear with it. The application processes states are now building under Treasury's temporary rules (we track every state's list) exist because subsection (g) exists. With no state list, checking that an organization qualifies would fall to the IRS, and the bill adds no new process for that.

The joint-return bill: H.R. 10413 and S. 5420. This one is a single line. It adds “(200 percent such amount in the case of a joint return)” after the $1,700 cap in §25F(b)(1), for tax years beginning after December 31, 2025. Treasury's proposed rules already get married couples to $3,400 by a different route: they treat each spouse as a separate taxpayer with a $1,700 cap of their own, so a couple reaches $3,400 when each spouse gives $1,700. The bill would put the $3,400 in the statute, where it would not depend on the proposed rules being finalized. Read plainly, the cap would attach to the joint return, so it would no longer matter which spouse wrote the check. It is not the first bill on this point. Sen. Cindy Hyde-Smith's S. 5322 doubles the joint cap and also indexes the $1,700 to inflation.

What happens next. As of October 6, the latest action on all four bills is the referral to committee; none has had a hearing or a vote. A change to §25F needs a tax bill that can pass both chambers, which is also why the repeal bills from the other direction have not moved. Until something passes, the law that applies to 2027 is the one on the books: a state opts in, its SGO list reaches the IRS by February 15, 2027, and a gift counts only if the organization is on it. That is why the undecided governors still decide where the credit works next year.

For organizations. Plan around current law. In a participating state, that means getting on the state's list; each state's process and deadline is on our official-lists page, and our free SGO Builder covers the federal requirements every list checks. If you run a scholarship program in a state that has not opted in, the opt-in bill is the one to watch. It would let you take credit-eligible gifts without your state opting in.