Some of these rules are proposed, not final. Treasury released the §25F regulations on October 1, 2026, in two parts. The temporary regulations are binding rules, not proposals, and apply from September 1, 2026: registering in the IRS SGO portal, donor acknowledgments and IRS reporting, and how states build their SGO lists. Most of the rest, including the 85% safe harbor, the details of the 90% test, income verification, payment rules, disqualified persons, and the annual certification and audit, comes from the proposed regulations. Taxpayers, SGOs, and states may rely on those for 2027 contributions if they follow them in full, but comments are open until December 1, 2026 (hearing December 15) and the final rules could change them. Items tagged Proposed rule rest on that part; we re-verify each one when the final regulations publish, and our news feed tracks every change.

First, the fork that matters

§25F’s hardest rule for an existing organization is 90/10, and Treasury’s proposed regulations (October 2026, which you may rely on for 2027) turn it into an 85% question. By default, at least 90% of your organization’s total gross receipts from all sources (not just §25F gifts) must go to scholarships. But if at least 85% of your activities are scholarship granting (your state tax-credit scholarship work counts), a single-state SGO can apply the 90% test to its segregated §25F account alone. An organization that is already (mostly) a scholarship fund clears that line and can retrofit and sail. An organization with other real programs, a food pantry, a school, a community center, will usually fall below 85%, so every non-scholarship dollar would have to fit in the 10%, and it could be on only one state’s list. Treasury itself says the safe harbor “may require the formation of new organizations,” and for those organizations the honest answer is a fresh, separate SGO entity instead: start stage 1 from scratch (it’s faster than untangling a mixed budget) and let your existing organization keep doing what it does.

The audit: check off what you already have

These are the same checkboxes as the from-scratch path, so ticking them here fills in your dashboard and every stage page. The amber box under each is the gap existing organizations typically need to close.

  1. Incorporation gave you all four stage-1 prerequisites.

    Check two things: your registered agent is current with the state (stale agents get corporations administratively dissolved), and your board has at least three members with no family or business ties to each other: §25F bars scholarships to insiders and their families (under Treasury’s proposed regulations, every director, officer, and selection-committee member, with spouses, parents, children, siblings, and more), and a related board makes that rule near-impossible to honor. Save your details in step 1 so the templates and later filings prefill.

  2. The corporation exists; nothing to re-file.

    The common gap: older articles often lack the 501(c)(3) purpose clause and dissolution clause the IRS requires in the articles themselves, and no existing nonprofit’s articles mention §25F. Read yours; if a clause is missing, file a certificate of amendment with your state (small fee, same portal you filed through) using the exact language in step 2.2.

  3. Every operating nonprofit does.

    Save it in step 3 (with the CP 575 letter if you can find it) so later filings prefill.

  4. Standard governance documents most nonprofits adopted at formation.

    The big one. Under Treasury’s temporary regulations (binding rules that apply from September 1, 2026), your state must determine that your governing documents and policies expressly require each §25F operating rule, beyond a general promise to follow the law; generic bylaws fail that check. Amend yours to add our template’s Article VIII (the §25F article) by your bylaws’ own amendment vote. No conflict-of-interest policy? Adopt the IRS sample at the same meeting.

  5. Your organizational meeting happened years ago.

    You still need one meeting: the board votes the articles amendment, the bylaws amendment (Article VIII), the conflict-of-interest adoption, and the segregated-account authorization, recorded in minutes. Run it exactly like step 5 (the agenda scripts adapt: “amend” instead of “adopt”).

  6. Your exemption is done; no new IRS application.

    Verify the classification: §25F requires a public charity, not a private foundation. Your determination letter says which you are (or check IRS Tax Exempt Organization Search). Private foundation? Talk to counsel about converting or forming a fresh entity; retrofitting alone won’t get you listed.

  7. Operations exist.

    One addition: open a separate account used exclusively for §25F contributions (the statute requires qualified contributions in segregated accounts); see step 7. Under Treasury’s proposed regulations every designated gift goes into it, and an SGO on more than one state’s list keeps one per state.

Then continue like everyone else

With the gaps closed, you’re exactly where a from-scratch builder stands at the end of stage 1: qualify under the §25F operating rules (stage 2), confirm your charitable-solicitation registration (stage 3) (many established nonprofits already have this one), and get on your state’s list (stage 4).

Questions existing organizations ask

We’re already an approved SGO/STO in our state’s own tax-credit program. Are we set?

You’re the best-positioned org in the country, but state program approval is not §25F listing: the federal credit has its own tests (governing documents that expressly require the federal rules, the 90% test, the federal award and income-verification rules) and its own state list submitted to the IRS. Your state scholarship work counts as scholarship granting for the 85% activity test, so if it is most of what you do, the safe harbor lets you apply the 90% test to your §25F account alone. Run the audit above (your gaps are usually the bylaws article and the segregated account), register in the IRS SGO portal once it opens, then watch stage 4 for your state’s §25F filing.

Do we have to re-apply to the IRS?

Not for exemption. Your 501(c)(3) determination carries over; the retrofit is state-level paperwork (articles amendment) and internal governance (bylaws amendment, policy adoption, new account). Amending your articles’ purposes doesn’t require a new exemption application when the new language stays within 501(c)(3) exempt purposes, which our clauses do. The one new IRS step is registering in the IRS SGO portal before you solicit §25F gifts, which Treasury’s temporary regulations require of every SGO; the IRS has not opened the portal yet.

We’re a private foundation. Can we retrofit?

Not directly: §25F requires a public charity. Converting a private foundation is a real legal project (termination or 60-month conversion), so for most foundations the practical path is funding or forming a separate public-charity SGO. Talk to counsel before choosing.