The federal scholarship credit, animated
Short explainers built from the same verified research as our written guides, the mechanics, the math, the maps, and the fine print of the Education Freedom Tax Credit.
Free to use. Embed any of these on your school’s or scholarship fund’s site, play them at a parent night, or send them to donors. The Share button on each video gives you the embed code. Please keep them unedited, and credit eftccredit.com when you can.
Start here
EFTC, FSTC, ECCA, §25F: four names, one tax credit
Four names, one tax credit. ECCA, the Educational Choice for Children Act, was the bill in Congress. Section 25F is where it landed in the tax code. Federal Scholarship Tax Credit is the title of the tax form.
Read the full guideWhat is the Education Freedom Tax Credit?
The Education Freedom Tax Credit is a new federal tax credit for gifts to K-12 scholarship funds. Congress created it in the 2025 tax law, as Section 25F of the tax code.
Read the full guideWhat is the Federal Scholarship Tax Credit?
Federal Scholarship Tax Credit is the name you'll see on the tax form. Treasury's rules call for a new Form 8525, titled Federal Scholarship Tax Credit, filed with your return. On it, you list the donor number from each scholarship fund you gave to.
Read the full guideThe $1,700 Education Freedom Tax Credit, explained
Up to $1,700 of federal tax you already owe, sent to a student's scholarship instead: how the credit works, the math on your return, $3,400 for married couples under Treasury's proposed rules, and which states are in.
Read the full guideExplain the Education Freedom Tax Credit in three sentences
Need to explain the credit to your community? It takes three sentences. One: up to $1,700 of the federal tax you already owe can go to a K-12 scholarship fund instead. Two: you get it back dollar for dollar, so it costs you nothing extra.
Read the full guideTreasury's October 2026 §25F rules: what they settled and what's still open
On October 1, 2026, Treasury released its rules for the credit. Here's what they settled, and what's still open. Settled, as proposed: married couples filing jointly can claim up to $3,400 when each spouse gives.
Read the full guideDonors
December 2026 or January 2027? Timing a gift for the federal scholarship credit
Give in December 2026, or wait until January 2027? Three weeks apart, the same gift is treated very differently. A December gift is an ordinary charitable gift. It may be deductible under the usual rules, but it earns no credit.
Read the full guideStacking a state scholarship tax credit with the federal credit
Already get a tax credit from your state for scholarship gifts? The federal credit stacks on top. Under Treasury's proposed rules, the credit from your state comes off the gift first, and the federal credit applies to what's left, up to $1,700. Give $2,500.
Read the full guideHow to claim the $1,700 federal scholarship tax credit
Claiming the credit is a short errand, and it starts the moment you give. Give cash to a fund on a participating state's list, and designate the gift for this credit when you make it. That choice can't be undone.
Read the full guide529 plans vs. state scholarship credits vs. the federal Education Freedom Tax Credit
A 529 plan, a state scholarship credit, and the new federal credit. Three different tools, and they stack. A 529 is your own savings for your own child. The 2025 law raised its K-12 limit to $20,000 a year. State credits vary by state.
Read the full guideCan you direct your scholarship tax credit gift to your school? The rule
Want your credit gift to help the school down the street? There's a right way to do it. Many scholarship funds let you point a gift at a school. That's allowed. What's never allowed is pointing it at a student.
Read the full guideThe federal scholarship tax credit for tax professionals: four rules
For tax professionals: four rules decide what a client's credit is actually worth. One: it's $1,700 per taxpayer. Under Treasury's proposed rules, spouses filing jointly can claim $3,400 if each gives.
Read the full guideSee the scholarship tax credit in your paycheck: the W-4 move
No need to wait for a refund to see the credit. You can see it in your paycheck. The W-4 you give your employer has a line for credits you expect to claim. Account for the credit there, and less tax comes out of each check. Give first, then adjust.
Read the full guideFamilies
What the federal scholarship tax credit means for private schools
If you run a private school, here's the first thing to know: the scholarship follows the student, not the school. A fund awards a scholarship to an eligible student, and pays tuition straight to the school that student attends.
Read the full guideWhat can an Education Freedom Tax Credit scholarship pay for?
These scholarships go well beyond private-school tuition. Treasury's own examples include tuition and fees, academic tutoring, special-needs services, extended-day programs, books, supplies and computers.
Read the full guideWho qualifies for an Education Freedom Tax Credit scholarship? The three tests
Three tests decide whether a student can get one of these scholarships. One: the student is in kindergarten through twelfth grade, or eligible to enroll in public school.
Read the full guideCan homeschoolers use the Education Freedom Tax Credit? Where it stands
Can a homeschooled child use one of these scholarships? It's the most asked question about the credit, and the honest answer is: not settled yet. The law ties the word school to state law, and Treasury says separate guidance on schools and expenses is coming.
Read the full guideEducation Freedom Tax Credit scholarships for students with learning differences
For a child with a learning difference, this may be the most flexible scholarship money yet. Treasury's examples of what it can pay for include special-needs services and academic tutoring, not just tuition.
Read the full guideCan public school students get Education Freedom Tax Credit scholarships?
No, this isn't private-school only. Students in public school can get these scholarships too. Not for tuition, which public school doesn't charge, but for what's around it: tutoring, special-needs services, extended-day programs, supplies.
Read the full guideRunning an SGO
Can an existing nonprofit become an SGO? The 85 percent question
Already run a nonprofit? You may be able to grant these scholarships, but the rules depend on how much of your work is scholarships. You'll need to be a 501(c)(3) public charity, not a private foundation, with a separate account for credit gifts.
Read the full guideHow to start a scholarship granting organization (SGO) for 2027
Want to run a scholarship fund in 2027? The calendar is already short. Start with a nonprofit corporation, and file for 501(c)(3) status on time, so the exemption reaches back to the day you formed.
Read the full guideThe SGO 90 percent rule under Treasury's proposed regulations
One rule shapes every scholarship fund: at least 90 percent of its income has to go out as scholarships. Under Treasury's proposed rules, income means everything the organization takes in, from every source, not just credit gifts.
Read the full guideWhich scholarship funds qualify? The state and IRS SGO lists
A gift only earns the credit if the fund is on the list. Here's how that list works. Each participating state sends the IRS its list of qualifying funds. It has to include every qualifying fund that asks.
Read the full guideHow a scholarship fund pays out: schools, vendors, reimbursements, wallets
How scholarship money actually moves from the fund to a student's education. Tuition, fees, room and board: paid straight to the school.
Read the full guideFour ways an SGO verifies a family qualifies
Every scholarship fund has to confirm a family qualifies. Treasury's proposed rules give four ways to do it. One: check the income itself, with tax returns, pay stubs, or IRS transcripts.
Read the full guideRecruiting donors for your scholarship fund under the federal credit
Asking for a credit gift isn't asking for new money. It's asking someone to redirect taxes they already owe. Your donors can live anywhere. Anyone can give to a fund on a participating state's list.
Read the full guideWhat a scholarship granting organization (SGO) does under the federal tax credit
Every dollar of the Education Freedom Tax Credit passes through one kind of organization: a scholarship granting organization, or SGO. An SGO is a 501(c)(3) charity that takes cash gifts from donors and turns them into K-12 scholarships.
Read the full guideThe SGO compliance calendar: what a scholarship fund files and when
Running a scholarship fund under this credit is mostly paperwork. Here's the calendar Treasury's rules set out. By January 31, an acknowledgment to every donor, with a donor number and the amount they designated.
Read the full guidePolicy
How a state opts in to the Education Freedom Tax Credit, every year
The credit is federal, but whether scholarships reach a state's students is that state's call, and it's made one year at a time. The governor, or whoever state law names, makes the election.
Read the full guideVoucher vs. ESA vs. scholarship tax credit: how they differ
Is this a voucher? No. Here's the difference, in one picture each. A voucher sends public money from the state budget to a school. A state education savings account puts state money in an account a family spends. This credit works differently.
Read the full guideWhat happens when a state opts out of the federal scholarship tax credit
What happens when a state sits the credit out? The money doesn't stay home. It leaves. People in that state can still claim the credit, by giving to a fund in a state that opted in. But scholarships only go to students who live in participating states.
Read the full guideFive dates that decide the first year of the Education Freedom Tax Credit
Five dates decide how the first year of the credit plays out. January 1, 2027: credit gifts start counting, and states must file their election for the year. February 15, 2027: states send their lists of scholarship funds to the IRS.
Read the full guideHow big could the Education Freedom Tax Credit get? Treasury's 2030 estimates
How big could this get? Treasury's own estimates, for 2030. Between 600 and 700 scholarship funds. More than 11 million taxpayers. Nearly $26 billion a year. Up to 2.2 million scholarships a year.
Read the full guide
Get EFTC updates in your inbox
Stay updated on opt-in votes, guidance, and deadlines as the January 2027 launch approaches.