Source documents

The federal individual income tax credit for cash contributions to scholarship granting organizations. Donor cap $1,700 per taxpayer (Treasury's October 2026 proposed rules treat each spouse on a joint return as a separate taxpayer), 5-year carryforward, 90% SGO spending requirement, K-12 income-eligible students at or below 300% AMGI.

Scholarships received from a qualifying SGO are excluded from gross income. Neither the student nor the parent owes federal income tax on the scholarship amount.

The expense list referenced by §25F: tuition, fees, tutoring, special-needs services, books, supplies, room and board, uniforms, transportation, computer technology, and supplementary services at K-12 schools. Under Treasury's October 2026 proposed rules, its definition of "school" also governs the 10-students-not-all-at-one-school test; Treasury says separate §530 guidance on expenses and schools is a high priority.

When ECCA / FSTC takes effect: §25F applies to taxable years ending after December 31, 2026; §139K applies to amounts received after that date.

First formal IRS guidance step. Treasury and IRS asked the public to comment on how to implement state SGO certification, the 90% income spending rule for multi-state SGOs, donor substantiation, and income verification. Comment period closed December 26, 2025. The October 1, 2026 proposed and temporary regulations now govern these topics.

The exclusive method for a state to make an Advance Election to be a “covered State” for calendar year 2027, using Form 15714. No alternative method or altered form is accepted for 2027. Treasury's October 2026 temporary regulations now set the dates: a first-year state must file Form 15714 on or before January 1, 2027 and submit its SGO list on or before February 15, 2027, or no organization in the state qualifies for 2027.

The IRS's official hub for the §25F credit. It explains that states must opt in and submit an SGO list before donors can claim the credit, links Form 15714 (the state advance election), and is where the IRS will post Form 8525 (the donor claim form named in Treasury's October 2026 proposed rules) and its instructions when released.

Treasury's June 2026 preview of the §25F proposed regulations, which were released October 1, 2026. Covers the 90% test and its segregated-account safe harbor, the “located in” standard, the multistate SGO path, the §530-based definition of school, income-verification safe harbors, annual audits, the unique-donor-number system, and a planned IRS SGO portal. The October 2026 proposed regulations set the safe harbor at 85% of activities and limited categorical income eligibility to five federal programs.

The press release in which Treasury officially branded the §25F program the “Education Freedom Tax Credit,” committed to proposed regulations by the end of September 2026, and said states, SGOs, and taxpayers could rely on them for tax year 2027. Includes Secretary Bessent's statement. The proposed regulations were released October 1, 2026.

Treasury's plain-English fact sheet on the Education Freedom Tax Credit: a $1,700 federal credit (dollar-for-dollar, 5-year carryforward) for cash gifts to SGOs, the four-step state opt-in → SGO list → contribution → claim flow, 300% AMGI student eligibility, the 90% SGO income test, eligible §530 expenses, and impact estimates ($24B/year; 77,000 tuition or 300,000+ tutoring scholarships per $1B). Archived as released in June 2026; Treasury's October 2026 update adds the $3,400 joint-return figure and the 2027 deadlines.

The release that accompanied the §25F proposed regulations (REG-117199-25) and temporary regulations (T.D. 10057). It states the $3,400 joint-return figure, the bar on state SGO restrictions, the 85% safe harbor, the state-credit ordering rule, and the 2030 estimates: 600 to 700 SGOs, 11 million donors, $26 billion a year.

Treasury's updated plain-English fact sheet: up to $1,700 per individual and $3,400 on a joint return, the 2027 state deadlines (Form 15714 by January 1, SGO lists by February 15), the state-credit ordering, about 95% of children under the income limit, and the 2030 estimates.

The regulatory-planning record for the §25F rules. Two paired entries, proposed regulations and temporary regulations, both at final rule stage with a timetable action of Interim Final Rule. An interim final rule takes effect without first being proposed for comment. On October 1, 2026 the temporary regulations issued that way (T.D. 10057) and the rest as proposed regulations (REG-117199-25).

Treasury's full proposed rulebook for the §25F credit (181 pages): who can claim it and how much, what an SGO must do to qualify and stay listed, and what a state must certify. Not final, but taxpayers, SGOs, and states may rely on it for contributions made on or after January 1, 2027.

The companion rules that take effect without a comment period: SGO registration in an IRS portal, donor acknowledgments by January 31 and IRS reporting by February 28, and the procedures for state elections and SGO lists. They apply from September 1, 2026 and expire October 1, 2029.

The proposed regulations name the donor claim form: Form 8525, Federal Scholarship Tax Credit (or successor form), attached to Form 1040. Donors will list the unique donor number from each SGO they gave to. The IRS has not yet released the form or its instructions.