On January 22, 2026, Gov. Mike Braun announced Indiana would opt into the new federal Scholarship Tax Credit, letting Hoosiers claim a nonrefundable credit of up to $1,700 for donations to qualified SGOs starting January 1, 2027. The state named five Indiana SGOs already planning to participate.
On January 22, 2026, Indiana announced it would opt into the new federal Scholarship Tax Credit (FSTC / ECCA / IRC §25F), an announcement made by Gov. Mike Braun (R) and posted to the State of Indiana's official events listing. Under the program, individual taxpayers can claim a nonrefundable federal credit of up to $1,700 for donations to qualified scholarship granting organizations (SGOs), with the credit becoming available January 1, 2027. Unused credit carries forward for up to five years. What set Indiana's announcement apart from earlier opt-ins was specificity: the state named five Indiana SGOs already planning to participate. You can track Indiana's status on our Indiana state page and the national participation map.
The five organizations the state identified are the Institute for Quality Education, Inc.; the Sagamore Institute Scholarship for Education Choice; the Lutheran Scholarship Granting Organization of Indiana, Inc.; the School Scholarship Granting Organization of Northeast Indiana, Inc.; and the Legacy Foundation. Naming participating SGOs at the moment of the announcement, rather than leaving families and donors to wait for a later certification round, is unusual. Indiana already runs a state-level SGO ecosystem, so several of these groups have years of experience administering scholarships, vetting eligibility, issuing donor receipts, and disbursing funds, the same operational machinery the federal credit will require.
The federal credit is designed to layer on top of Indiana's existing 50% state SGO tax credit, with the two running in parallel. The state credit carries no contribution limits, while the federal credit is capped at $1,700 per individual per year and is nonrefundable, meaning it offsets federal tax liability rather than generating a refund beyond it. For Indiana donors, that combination is unusually generous: a contribution to a participating SGO can earn a state credit and a federal credit on the same dollars, subject to each program's own rules. For SGOs, the practical question is operational readiness, because a group must be positioned to accept credit-eligible federal donations, track them separately, and report to the U.S. Treasury once the program launches.
Indiana's announcement did not specify the legal instrument it used to join, whether an IRS advance election, an executive action, or legislation, and the state's materials describe the move as opting in without naming the mechanism. That distinction matters because states have arrived at §25F by different roads: some by gubernatorial election like Virginia, Colorado, and Florida, and a few only after legislatures overrode their governors' vetoes. The IRS has documented the formal advance-election path in Form 15714, and the credit cap itself is fixed in statute, as our explainer on why the figure is $1,700, not $3,400 lays out.
The work between now and the January 1, 2027 launch is operational, not political. Indiana's named SGOs, and any others that join, must build out the donor-facing intake, eligibility verification, scholarship disbursement, and Treasury reporting that credit-eligible contributions require. Operators standing up or expanding a §25F program can review how the credit works in our explainers and see the broader national field in the SGO directory; running a compliant program end to end (donor receipts, eligibility checks, disbursement, federal reporting) is exactly the workload software built for §25F is designed to carry. How quickly Indiana's organizations stand up that infrastructure, not the opt-in itself, will determine when Hoosier families actually see scholarships and when donors can begin claiming the credit.
