EFTC in South Carolina

South Carolina 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: Henry McMaster; Republican
Status: Opted in
Program begins: January 1, 2027; Federal tax credit live

Thank Governor McMaster

What EFTC means for South Carolina

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

Donors in South Carolina, 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.

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

Frequently asked questions about EFTC in South Carolina

Does South Carolina participate in EFTC?

Yes. Governor Henry McMaster has opted South Carolina into the program, making South Carolina families eligible for scholarships when the program begins on January 1, 2027.

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

Governor Henry McMaster (Republican) has opted the state in.

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

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

Certification status: Not yet published, awaiting federal guidance

SGO-list deadline: January 1, 2027 (stated by the governor's office)

How South Carolina opted in: Gov. McMaster's executive advance election (early 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.

South Carolina-specific requirements

South Carolina 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 South Carolina’s application window to open after that.

The governor's office says it is too early to know which organizations will be on South Carolina's list.

Sources: The Post and Courier: South Carolina and the federal tax-credit scholarship

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 South Carolina

3 Scholarship Granting Organizations currently serve South Carolina 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 South Carolina →