How to become an SGO in Idaho

1.Be a 501(c)(3) public charity

The IRS has to recognize you as a 501(c)(3), and you can't be a private foundation. Idaho accepts nonprofits whose Form 1023 is still pending. Under Treasury's temporary regulations, a state can list a nonprofit whose Form 1023 is still pending only if the exemption, once granted, takes effect by January 1 of the list year. For 2027, that means the nonprofit has to be incorporated by December 31, 2026. (An exemption reaches back to the date you incorporated if you file Form 1023 within 27 months.)

2.Register in Idaho

Treasury's rules count you as "located in" Idaho if you're authorized to do business there and follow its charity laws. You don't need an office or staff there. If you're incorporated in another state, you register with the Idaho Secretary of State ($100). Idaho doesn't register charities. You'll also need a registered agent with a Idaho address.

3.Open a separate bank account for Idaho

Gifts for the credit go into an account that holds nothing else. If you're on more than one state's list, you keep one account per state and donors pick the state.

4.Put the §25F rules in your bylaws and policies

A new nonprofit has no track record, so the state reads its documents, and a promise to "follow the law" isn't enough. They have to require each rule: at least 90% of your income goes to scholarships, scholarships go to at least 10 students who aren't all at the same school, you verify household income, past recipients come first and then their siblings, no donor can earmark a gift for a particular student, and no scholarships go to insiders.

5.Register in the IRS SGO portal when it opens

Treasury asks every SGO to register in the IRS portal, ideally before a state lists it. The portal gives you the donor-number format your receipts use. It hasn't opened yet.

6.Apply to Idaho by January 1, 2027

Apply through the Idaho Department of Education's online SGO application, linked from its Education Freedom Tax Credit page. The form asks for the name your nonprofit registered under with the Idaho Secretary of State, your EIN, and whether you're a multi-state SGO; written answers on your work with Idaho schools or districts, how you'll handle marketing, financial transparency and reporting, and how you'll verify family income; and uploads of your IRS 501(c)(3) determination letter (or pending application), a signed copy of the department's SGO assurances letter, and your latest annual report or audit if you have one. The department's page says an SGO must serve more than one school and at least 10 students. Some assurances, such as a 10% cap on administrative costs, are not in §25F, and Treasury's temporary regulations bar a state from requiring SGOs to operate more restrictively than §25F, so ask the department how they apply before you sign. Idaho law has the department accept submissions year-round and submit its list by January 1. The department says it will post approved SGOs on its Education Freedom Tax Credit page as it approves them.

7.After you're listed

Send each donor a written acknowledgment by January 31 and report the gifts to the IRS by February 28. Under Treasury's proposed regulations, which you can rely on for 2027, you also file a yearly certification and report (with a copy to every state that lists you), get a yearly audit, and spend at least 90% of each year's income on scholarships by the end of the next year.