Federal §25F Credit Could Be a Lifeline for Nevada's Starved Opportunity Scholarship Program

Gov. Joe Lombardo (R) opted Nevada into the federal Education Freedom Tax Credit (§25F) on Friday, January 23, 2026, filing an advance election with the IRS and Treasury via Form 15714. The move, confirmed by Fox5 Vegas and listed on the governor’s office press page, makes Nevada one of the states electing into a program that offers donors a dollar-for-dollar federal tax credit of up to $1,700 per taxpayer for gifts to scholarship-granting organizations (SGOs), with any unused credit carried forward up to five years. The federal credit applies to taxable years beginning after December 31, 2026, which means donations and scholarships do not begin flowing until January 1, 2027. Scholarship eligibility under §25F runs to households at or below 300 percent of area median income, a federal threshold we explain in our guide to how the credit works.

What makes Nevada’s election notable is the condition of its existing state program. Nevada already runs a tax-credit scholarship vehicle, the Opportunity Scholarship program, but lawmakers have steadily squeezed its funding: the annual cap now sits around $6.65 million, down from a peak of roughly $26 million in the 2017-2018 school year. The state’s SGOs cap individual awards at about $10,000 per year, though that figure is a program maximum rather than a typical grant. Reporting from The Nevada Independent indicates that actual average awards in 2023 ran closer to $4,000 to a little over $6,000, well short of the roughly $12,000 average private-school tuition in the state. The result is a program that reaches a limited number of families and rarely covers the full cost of attendance.

For Nevada SGOs and donors, the federal credit is significant precisely because of that gap. Advocates expect that §25F scholarships could be stacked on top of the existing Opportunity Scholarship awards, channeling new donor dollars through Nevada SGOs for the first time since the state program was constrained, though the exact stacking mechanics depend on Treasury regulations that are not yet final. It is worth keeping the two programs’ rules distinct: §25F eligibility is set at 300 percent of area median income under federal law, which is a different test than the income limits attached to the state Opportunity Scholarship program. We track how the federal floor interacts with state-level rules in our coverage of whether §25F is a floor or a ceiling for state restrictions, and the $1,700 per-taxpayer cap itself is settled, as we explain in what the statute already settles on the credit amount.

Nevada joins a growing roster of states that have made the election across party lines, including Virginia, Colorado, Florida, and Alaska, with the IRS publishing a consolidated list of advance-election states by mid-2026. Critics in Nevada have raised concerns that participation could tie the state’s hands on future education policy, a tension covered in the second of The Nevada Independent’s reports below. We follow Nevada’s status, the state of its Opportunity Scholarship program, and any further movement on our Nevada state page and on the national participation map.

The practical question now is how quickly Nevada SGOs can prepare for a 2027 launch. Running a §25F program is largely an operations and compliance build: verifying household income against the federal threshold, tracking donor receipts and carryforwards, and reporting qualified organizations to the IRS. A growing number of scholarship organizations are standing up donor-acquisition and award workflows on software written for the federal credit from the start, rather than retrofitting tools built for older state programs. Operators sizing up the opportunity can study participating organizations across the national SGO directory as Nevada moves toward its first cycle of stacked federal and state scholarships.