EFTC in Colorado
Colorado is participating in the federal Educational Choice for Children Act scholarship program. Also known as the Federal Scholarship Tax Credit (FSTC), the program was enacted as IRC §25F and takes effect January 1, 2027.
- Governor
- Jared Polis
- Democrat
- Status
- Opted in
- As of 2025-12-05
- Program begins
- January 1, 2027
- Federal tax credit live
What EFTC means for Colorado
Because Governor Jared Polis has opted Colorado into EFTC, families in Colorado will be eligible for scholarships funded through the program when it goes live on January 1, 2027. Designated Scholarship Granting Organizations (SGOs) in Colorado will receive donations from federal taxpayers and distribute them as scholarships to qualifying K-12 students.
Donors in Colorado, and anywhere else in the country, can claim a federal income tax credit of up to $1,700 per tax return for contributions to a qualifying SGO, beginning January 2027. The credit is non-refundable and capped, but it lets taxpayers redirect federal income tax that would otherwise go to the U.S. Treasury into scholarships for students in their own community.
Colorado's participation means federal tax dollars contributed by Colorado residents stay in Colorado, supporting families here rather than flowing to scholarship organizations in other states.
Frequently asked questions about EFTC in Colorado
Does Colorado participate in EFTC?
Yes. Governor Jared Polis has opted Colorado into the program (decision: 2025-12-05), making Colorado families eligible for scholarships when the program begins on January 1, 2027.
Who is the governor of Colorado and what is their position on EFTC?
Governor Jared Polis (Democrat) has opted the state in. Polis called opting in a "no-brainer" and said he would "be crazy not to" take the federal credit for Colorado families.
Can Colorado residents donate to an SGO and claim the federal tax credit?
Beginning January 1, 2027, any U.S. taxpayer can claim a federal income tax credit of up to $1,700 per tax return for donations to a qualifying Scholarship Granting Organization, regardless of the state they live in. Colorado residents can give to SGOs in Colorado and the scholarships will fund Colorado students.
When does the EFTC program begin?
The Educational Choice for Children Act program begins on January 1, 2027. Donations made on or after that date are eligible for the federal tax credit. Each participating state's governor must submit a list of qualifying Scholarship Granting Organizations to the U.S. Treasury by January 1 of each participating year.
Becoming an SGO in Colorado
To operate as a Scholarship Granting Organization (SGO) in Colorado under the federal Education Freedom Tax Credit, an organization must meet the §25F requirements that apply in every participating state, plus anything Colorado adds on top. Here is the current picture.
How Colorado opted in: Gov. Polis's executive advance election (January 2026), the first Democratic governor to opt in
Federal requirements (apply in every state)
- Be a 501(c)(3) nonprofit that is not classified as a private foundation.
- Spend at least 90% of the income you receive on scholarships, the remaining 10% is the only budget for all administration, including fundraising.
- Award scholarships to 10 or more students who attend more than one school.
- Do not earmark or reserve contributions for a specific, named student.
- Serve students in households at or below 300% of area median gross income.
- Appear on your state's certified SGO list, which the state submits to the U.S. Treasury.
Colorado-specific requirements
Colorado has not published SGO requirements beyond the federal rules yet. Certification mechanics are gated on Treasury’s proposed §25F regulations, expected by the end of September 2026, so watch for Colorado’s application window to open after that.
The Department of Revenue will compile Colorado's SGO list and has said it does not plan to issue separate state guidance, so it is waiting on the federal rules.
Sources: Colorado Department of Revenue: Scholarship Granting Organizations
Full walkthrough: how to start an SGO. The intake, income verification, receipting, and disbursement a compliant program needs can run on software built specifically for the §25F workflow.
Scholarship Granting Organizations in Colorado
Our directory tracks the Scholarship Granting Organizations running today’s state tax-credit scholarship programs, the organizations most likely to administer the federal EFTC once official §25F lists are certified.
Browse the national SGO directory →Other states with the same status
States that have also opted in.
Recent Colorado EFTC / FSTC news
Coverage of Colorado’s Federal Scholarship Tax Credit decisions and developments.
- State action · May 9, 2026Colorado Gov. Polis publicly defends his FSTC opt-in at Denver event
- State action · April 30, 2026Colorado lawmakers kill their own bill to put state guardrails on the §25F SGO list
- State action · December 5, 2025Colorado Gov. Polis opts Colorado into the Federal Scholarship Tax Credit
Learn more about EFTC
In-depth guides on how the program works, who qualifies, and how to participate.
- The real obstacle isn't politics, it's adoptionOnce a state opts in and the program is live, the question that decides whether the Education Freedom Tax Cred…
- Get the credit in your paycheck, not the refundMost people assume a January 2027 donation means waiting until the April 2028 refund to see the $1,700 back, r…
- The CPA's guide to §25FA practitioner's reference to IRC §25F (the EFTC / ECCA / FSTC): the $1,700 dollar-for-dollar credit, why it w…
- Year-end planning: which December mattersThe Education Freedom Tax Credit takes effect January 1, 2027, which turns the usual year-end playbook upside …
- The EFTC, explained for your communityA plain-language, forward-it-to-anyone explainer of the new federal scholarship tax credit: what it is (up to …
- Designating your gift to a schoolSection 25F bans earmarking a donation for any particular student, and that ban is exactly as wide as it sound…
Thank Governor Polis for opting Colorado in
A short note of thanks from a constituent goes a long way, and reinforces that participation matters to families in your state.
Contact Governor Polis →
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