A Senate bill would give joint filers a $3,400 §25F credit and index the cap to inflation

The most common question donors ask about the Education Freedom Tax Credit is whether a married couple gets $1,700 or $3,400. The statute caps the credit at $1,700 “to any taxpayer for any taxable year” and says nothing specific about joint returns, and Treasury has not ruled on it. On August 6, 2026, Sen. Cindy Hyde-Smith (R-MS) introduced a bill that would answer the question in the statute itself. Her office announced S. 5322, the Federal Tax Credit Scholarship Improvement Act, on August 13, and the bill was referred to the Senate Finance Committee.

The bill is short. It replaces §25F(b)(1) with three subparagraphs. The first says the credit for any taxpayer for any taxable year may not exceed the “applicable amount (twice such amount in the case of a joint return).” The second sets the applicable amount at $1,700. The third indexes it to inflation for taxable years beginning after December 31, 2026, using the same cost-of-living adjustment that indexes the tax brackets with 2025 as the base year. Each increase is rounded to the nearest $50, and Treasury must publish the next year's limit by November 1. The bill would apply to taxable years beginning after December 31, 2025.

The “twice such amount” language is the most important part of the bill, and it cuts in two directions. Congress uses that phrase when it wants a joint return to get double a figure. Its absence from current §25F is the main reason the prevailing reading, and ours, is $1,700 per return. The senator's office describes the current law the same way, calling $3,400 double the $1,700 limit that existing law allows. The bill would not settle anything unless it passes, though. Until Congress acts or Treasury rules, donors should plan on $1,700 per return and treat $3,400 for joint filers as unsettled. The §25F regulations now under White House review are the nearer place an answer could appear.

Here is where the bill stands. The introduced text lists no cosponsors, it has had no committee action, and the 119th Congress ends in January 2027, when unpassed bills die. Changes to tax credits usually travel inside larger tax packages rather than as standalone bills, so the realistic path for S. 5322 is as language someone lifts into a later vehicle. It is also not the only §25F bill in the Senate: a repeal bill introduced in April would go the opposite way, and the credit remains law as enacted.

For SGOs, the bill mainly signals what a mature version of the program could look like. Inflation indexing matters over time: a fixed $1,700 buys less each year, and this is the same approach the tax code already takes with brackets and the standard deduction. A doubled joint-return cap would roughly double the ask an SGO can make of a married household. None of that changes 2027 planning yet. Build donor materials around $1,700 per return, and we will report if S. 5322 moves or if Treasury's rules address joint filers first.