EFTC in Indiana

Indiana 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: Mike Braun; Republican
Status: Opted in; As of 2026-01-22
Program begins: January 1, 2027; Federal tax credit live

Thank Governor Braun

What EFTC means for Indiana

Because Governor Mike Braun has opted Indiana into EFTC, families in Indiana will be eligible for scholarships funded through the program when it goes live on January 1, 2027. Designated Scholarship Granting Organizations (SGOs) in Indiana will receive donations from federal taxpayers and distribute them as scholarships to qualifying K-12 students.

Donors in Indiana, 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.

Indiana's participation means federal tax dollars contributed by Indiana residents stay in Indiana, supporting families here rather than flowing to scholarship organizations in other states.

Frequently asked questions about EFTC in Indiana

Does Indiana participate in EFTC?

Yes. Governor Mike Braun has opted Indiana into the program (decision: 2026-01-22), making Indiana families eligible for scholarships when the program begins on January 1, 2027.

Who is the governor of Indiana and what is their position on EFTC?

Governor Mike Braun (Republican) has opted the state in.

Can Indiana 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. Indiana residents can give to SGOs in Indiana and the scholarships will fund Indiana 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 Indiana

To operate as a Scholarship Granting Organization (SGO) in Indiana under the federal Education Freedom Tax Credit, an organization must meet the §25F requirements that apply in every participating state, plus anything Indiana adds on top. Here is the current picture.

Certification status: Not yet published, awaiting federal guidance

Administered by: Office of the Governor

How Indiana opted in: Gov. Braun's executive advance election (January 22, 2026)

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.

Indiana-specific requirements

Indiana 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 Indiana’s application window to open after that.

Indiana has already pre-named several existing state-certified SGOs (Institute for Quality Education, Sagamore Institute, Lutheran SGO of Indiana, and others) as expected participants, suggesting it will build on its existing state SGO infrastructure.

Sources: Gov. Braun opts Indiana into the federal tax credit (January 22, 2026)

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 Indiana

10 Scholarship Granting Organizations currently serve Indiana through state tax-credit scholarship programs and national networks, the organizations most likely to administer the federal EFTC here once official §25F lists are certified.

Browse SGOs in Indiana →