President Trump signed the One Big Beautiful Bill Act on July 4, 2025, and buried in it, as section 70411, was §25F, the first-ever federal tax credit for scholarship donations. One year later, 30 states are on the participation map, Treasury has previewed the rules, and the first dollar-for-dollar donations are six months out. Here is where the credit stands on its first birthday.
One year ago today, on July 4, 2025, President Trump signed the One Big Beautiful Bill Act (Public Law 119-21) into law, and with it delivered something the school-choice movement had worked toward for a generation: section 70411 created a new §25F of the Internal Revenue Code, the first federal tax credit in American history for donations to K-12 scholarship organizations. The design is elegant. A donor anywhere in the country can give up to $1,700 to a qualified Scholarship Granting Organization (SGO) and claim the full amount back as a dollar-for-dollar federal credit, turning what would have been a tax payment into a scholarship for a child in their own community. On its first birthday, the credit has gone from a single provision in a long bill to a national program that 30 states have already joined, with the first donations now just six months away.
The pace of adoption has outrun nearly every early prediction. On signing day, not one state had opted in; twelve months later, 30 are on the participation map. Nebraska led the way, with Gov. Jim Pillen signing on September 29, 2025, before the IRS had even released the form states would use. Virginia became the first to complete the formal federal election in January 2026, and a broad wave followed through the winter and spring. The momentum proved strong enough that states came in even where their own governors had hesitated. By this summer the IRS's official roster listed 28 states with completed advance elections, while our own participation map counts 30 (Kansas and Kentucky are in by state action and have simply not yet filed their formal federal election). For a program that began the year at zero, that is an extraordinary run, and several of the remaining states are visibly weighing the same move.
The federal rules came into focus alongside the state wave. The IRS published the advance-election form in December 2025 and its official roster of participating states in June 2026. Then, on June 10, 2026, the Treasury Department released a preview of the forthcoming §25F regulations that handed operators their first real blueprint: a clean 90%-of-income test measured against a dedicated account, an annual audit, and a unique-donor-number system so an SGO never handles a Social Security number. Treasury also said states, SGOs, and taxpayers can rely on the coming rules for the 2027 tax year, which is why tax advisers spent the following weeks telling clients to start building now rather than wait. The proposed regulations themselves are due by the end of September 2026.
That September date is the last gate before the program goes live, and the states are staged and ready for it. SGO certification has not opened anywhere yet, and that is by design, not delay: the rules that govern it were sensibly held for the September regulations, and several states have already moved as far as they can in the meantime. Alabama has published its certification criteria, Idaho and Kentucky have named the offices that will run their lists, and Virginia has gone furthest of all, submitting an early roster of organizations to Treasury. The moment the rules land, the certification windows open and the runway to launch is short and clearly marked.
What stands out most at one year is how broad the credit's appeal turned out to be. Colorado's Gov. Jared Polis became the first Democratic governor to opt in, and the reason the map filled the way it did is practical rather than ideological. §25F does not spend a state's own money; it lets a state's residents redirect federal tax they would otherwise owe into scholarships for local children. A state that participates keeps those federal dollars working for its own families, and a state that sits out simply sends them to families elsewhere. Seen that way, opting in is less a political statement than a decision not to leave money on the table, which is exactly how a growing number of governors across the spectrum have come to treat it.
Year two is when the credit becomes real for families. The path from here is short and clear: the proposed regulations at the end of September, a fourth-quarter stretch in which states open SGO applications and certify their lists, and then January 1, 2027, when the first donations can be made and the first scholarships awarded. For anyone thinking about starting or running an SGO, this anniversary is the moment to move: the roughly six months between now and launch are the window to stand up a 501(c)(3), build a donor base that stays comfortably inside the 10% administrative cap, and choose the software to run a compliant program. Our guide to starting an SGO lays out what can be done today, the participation map tracks every state, and the directory maps the field already forming. One year after a president's signature, the first federal scholarship tax credit has gone from an idea to a near-certainty with a launch date on the calendar, and its best year is the one just ahead.
