South Carolina Gov. Henry McMaster opted the state into the federal §25F scholarship tax credit, his office confirmed in late January 2026. Donors can give to in-state SGOs and claim the dollar-for-dollar federal credit of up to $1,700 starting January 1, 2027.
South Carolina has decided to participate in the federal Scholarship Tax Credit (FSTC / ECCA / §25F), Gov. Henry McMaster's office confirmed in late January 2026. As reported by the Post and Courier on January 28, a spokesman for the governor said McMaster opted the state in, clearing the way for South Carolina donors to give to qualifying in-state Scholarship Granting Organizations (SGOs) and claim a dollar-for-dollar federal tax credit of up to $1,700. The credit becomes available January 1, 2027, the same date by which states' lists of qualifying SGOs are due to the federal government, so the practical effect of the decision lands at the start of next year rather than immediately. McMaster, a Republican who has led the state since 2017, has been a consistent supporter of expanding private-school choice in South Carolina.
The mechanics are what set §25F apart from a deduction. A taxpayer who donates to a qualifying SGO claims the contribution back as a credit, not a write-off, meaning the federal government effectively offsets the gift up to the $1,700 ceiling. The donated dollars then fund scholarships that families can use for tuition and other qualifying education expenses. South Carolina's participation is best understood as an opt-in decision confirmed by the governor's office rather than a fully executed formal filing: the cited reporting describes a decision to join, and South Carolina now appears on the IRS roster of participating states. Families become scholarship-eligible if their income falls under 300 percent of their area's gross median income, a threshold that varies by region. The Post and Courier noted that in parts of Charleston that ceiling reaches roughly $300,000, an illustration of how high the cap can run in higher-cost areas, not a flat statewide eligibility number.
For SGOs and donors in South Carolina, the timeline now matters more than the headline. Because scholarships do not flow until 2027 and SGO lists are due to the federal government by January 1 of that year, the months ahead are the window in which organizations get qualified, donors plan their giving, and families learn whether they fall under the income threshold. Operators weighing whether to stand up or expand a qualifying organization can review how the program works in our explainers and see the current national field in the SGO directory; the donation-and-scholarship machinery can run on software built specifically for §25F. South Carolina's status, including what families need to know locally, is tracked on our South Carolina state page.
South Carolina joins a growing roster of states that have committed ahead of the 2027 launch. Virginia was first to opt in, and other Republican governors have followed, including Florida, where Ron DeSantis signed on the same week. The IRS has confirmed that more than half the states have signed up, and the agency's own roster of participating states now includes South Carolina. How quickly the state builds out its SGO network, and how many donors take advantage of the credit in its first year, will determine how much the decision actually delivers for South Carolina families. The full national picture is mapped on our state participation map.
