Idaho opens its §25F SGO application, and its assurances letter goes beyond the federal rules

Idaho is taking applications. On October 7, 2026, the Idaho Department of Education posted an online application for organizations that want to be on the state's list of scholarship granting organizations (SGOs) under the federal Education Freedom Tax Credit, IRC §25F, together with an "SGO Assurances" letter every applicant signs. Idaho joins Kentucky and Alaska, which opened their processes in July and August, and Montana, where the Department of Revenue has been asking organizations since September 1 to contact it for verification. Tennessee opened a preliminary interest form the same day.

Who the department has in mind. Idaho's page speaks directly to public schools: "Participating public schools and school districts may benefit from scholarship funds distributed through approved Scholarship Granting Organizations." It says community education foundations and other nonprofits may qualify if they are 501(c)(3) organizations, serve more than one school and at least 10 students, can manage scholarship funds, and are approved by the department. The application asks which kinds of scholarships an organization plans to offer, with choices that run from academic tutoring and afterschool programs to private school tuition and fees.

What the application asks for. The organization's name as registered with the Idaho Secretary of State, its EIN, a description of its work with Idaho schools or districts, how it will handle marketing, financial transparency and reporting, how it will verify applicants' eligibility and family income, its IRS 501(c)(3) determination letter or application, its most recent annual report or audit if it has one, and the signed assurances letter.

The assurances. The letter asks an organization to confirm, among other things, that it has policies for criminal background checks on all employees and board members; will contract with an independent CPA for an annual financial audit, give it to the department, and make it available to the public on request; "will allow taxpayers to designate a participating school for which the taxpayers' contribution must be used"; will use "no more than ten percent (10%) of the total amount of contributions for administrative costs"; will distribute "one hundred percent (100%) of any income earned on contributions as scholarships"; and will give donors receipts that name the school they designated. The department may suspend or terminate an organization's certification for intentional or substantial noncompliance, and may audit it.

How that lines up with the federal rules. Several of these are not in §25F. The statute's spending test is that at least 90 percent of the organization's income goes to scholarships; it does not cap administrative costs as a share of contributions, and it says nothing about donors directing gifts to a school (it bars earmarking a gift for a particular student). Treasury's temporary regulations, which take effect without a comment period and apply from September 1, 2026, require a participating state to impose application, documentation and financial reporting requirements "reasonably tailored" to confirming the federal tests and preventing fraud, and an annual audit fits that description. They also say a state "may not require SGOs to operate in a manner that is more restrictive than" §25F (§ 1.25F-5T(e)), and an administrative-cost cap or a school-designation rule is a rule about how an SGO operates (one national standard). If you plan to apply, ask the department how it applies those assurances before you sign. Its page also says further Treasury guidance "will inform Idaho's approval process," so the terms may change.

The calendar. Idaho Code 33-144, enacted as HB 731, directs the department to accept submissions throughout the year and to submit and publish its list no later than January 1 each year. The federal deadline for 2027 lists is February 15, 2027, but Idaho's own law sets the earlier date, so plan around January 1. Under Treasury's proposed regulations, an Idaho-listed SGO funds scholarships for students who live in Idaho, and donors anywhere can give to it and claim up to $1,700 per taxpayer. To be "located in" Idaho, an organization must be authorized to do business there and comply with its charity laws; no Idaho headquarters is required.

For organizations. Start with the Idaho Secretary of State registration the form asks for, then gather the documents: your 501(c)(3) letter, your latest financials, and a written plan for verifying family income. Our free SGO builder walks through each step, our Idaho page tracks the state's process, and every state's official list is in one place.