Learn the EFTC
The Education Freedom Tax Credit (EFTC) is the first federal tax credit scholarship program in U.S. history. It begins January 1, 2027. Treasury’s proposed regulations, released October 1, 2026, fill in how it works. Choose your track below, whether you’re learning about the program or running a scholarship organization.
Understanding EFTC
How the Education Freedom Tax Credit works, who qualifies for scholarships, and how families and donors participate.
- VIDEOAdvocates, SGO operators, donors, journalists, and policymakers
The real obstacle isn't politics, it's adoption
Once a state opts in and the program is live, the question that decides whether the Education Freedom Tax Credit works isn't political, it's whether ordinary taxpayers actually claim a credit that pays them back dollar-for-dollar. History says free money gets left on the table: workers skip employer 401(k) matches, and the no-cost presidential campaign checkoff fell from 29% participation to about 4%. The four frictions that suppress uptake (awareness, paperwork, cash-flow timing, and trust), why each one is fixable, and why adoption is won at the operator layer, not in the political fight.
Read · 10 min - VIDEODonors, employees, and their tax advisors
Get the credit in your paycheck, not the refund
Most people assume a January 2027 donation means waiting until the April 2028 refund to see the $1,700 back, roughly 16 months. It doesn't have to. The §25F credit is earned in the 2027 tax year, and federal withholding is adjustable in real time: with a corrected Form W-4, you recover the credit across your 2027 paychecks instead of lending it to the IRS interest-free. How the paycheck route works, why it's fully allowed (the W-4 is built to account for credits, and Treasury's October 2026 rules leave withholding to ordinary tax law), the three guardrails that keep it clean (you need the tax liability, you must actually make and designate the gift, and you should run the numbers with a preparer), how a two-earner couple plans for up to $3,400, why an after-tax payroll deduction counts as a cash gift, and a step-by-step for donors and their accountants.
Read · 14 min - VIDEOCPAs, enrolled agents, and tax advisors
The CPA's guide to §25F
A practitioner's reference to IRC §25F (the EFTC / ECCA / FSTC) and Treasury's October 2026 proposed and temporary regulations: the $1,700 dollar-for-dollar credit, why it works for standard-deduction clients, what binds and what clients may rely on, the §25F(e) double-benefit bar, the state-credit reduction applied before the cap, AMT and the §26(a) ordering, the 5-year FIFO carryforward, up to $3,400 on a joint return when each spouse gives, the cash and designation rules, the partnership and S corporation rule, the IRS SGO list, the unique donor number and Form 8525, and year-end planning pointers, each rule cited to the statute or the regulation paragraph.
Read · 23 min - VIDEODonors and their advisors planning charitable gifts
Year-end planning: which December matters
The Education Freedom Tax Credit takes effect January 1, 2027, which turns the usual year-end playbook upside down for one transition year: a cash gift to an SGO in December 2026 earns no federal credit, while the identical gift three weeks later, designated as a §25F gift, comes back dollar-for-dollar, up to $1,700 per taxpayer ($3,400 for a married couple when each spouse gives). What a 2026 gift is still worth (the §170 deduction, state scholarship credits), why to check the IRS SGO list before a January 2027 gift, why December 31, 2027 becomes the first real EFTC deadline, the cash-only and designation rules, the no-double-benefit rule, the five-year carryforward, the paperwork Treasury's October 2026 rules require, and a planning checklist by calendar.
Read · 13 min - VIDEOParents, community members, and anyone sharing the program
The EFTC, explained for your community
A plain-language, forward-it-to-anyone explainer of the new federal scholarship tax credit: what it is (up to $1,700 per person off your federal taxes, dollar for dollar, for donating to a scholarship organization, or $3,400 for a married couple who each give), when it starts (January 1, 2027), who qualifies, how to check your state, the four steps to actually do it, whether you can support your own school, and the honest fine print. Written for parent lists, congregation emails, and community group chats.
Read · 8 min - VIDEODonors, schools, and SGO operators
Designating your gift to a school
Section 25F bans earmarking a donation for any particular student, and that ban is student-level, not school-level. Treasury's October 2026 proposed rules restate it but say nothing about school preferences, which remain common practice in state scholarship-credit programs. What donors can and cannot direct, the §25F and state designations the rules do require, the disqualified-person limits on donors' own families, and the award rules the SGO must still follow.
Read · 14 min - VIDEOPublic-school families, advocates, journalists, and SGO founders
EFTC and public-school students
The Education Freedom Tax Credit (§25F) is often described as a private-school program, but its eligibility is student-based, not school-based, and it defines qualified expenses by reference to the IRC §530(b)(3)(A) Coverdell list, which covers academic tutoring, special-needs services, books, supplies, and computer technology. A public-school student from a qualifying household can receive scholarship support, and Treasury's October 2026 fact sheet lists tutoring for students attending a local public school as an example. What the statute and Treasury's proposed rules allow, including a safe harbor for school-based tutoring in low-income areas, what happens in practice today, and the honest limits.
Read · 11 min - VIDEODonors, tax advisors, SGO founders and operators
The §25F donor number
Treasury's §25F regulations (previewed in June 2026, issued October 1, 2026) set up a unique donor number for the federal Education Freedom Tax Credit: the Scholarship Granting Organization issues each donor a number on a written acknowledgment, reports contributions to the IRS under it, and the donor reports it on Form 8525, so the IRS can match a claimed credit to a real donor and a real SGO without the donor ever handing the SGO a Social Security number. What the number is, how it flows, and what it means for donors and SGO operators.
Read · 9 min - VIDEOAnyone new to the program, donors, families, schools, operators
What is the Education Freedom Tax Credit?
The Education Freedom Tax Credit (EFTC) is the new federal tax credit for donations to K-12 scholarship organizations, worth up to $1,700 per taxpayer ($3,400 for a married couple who each give, under Treasury's proposed rules) and starting January 1, 2027. What the credit does, what Treasury's October 2026 rules settled for donors, where the name comes from, what it means for donors, families, schools and scholarship organizations, and where each state stands.
Read · 11 min - VIDEOTaxpayers, CPAs, tax advisors, anyone researching the IRS term
What is the Federal Scholarship Tax Credit?
Federal Scholarship Tax Credit (FSTC) is the term the IRS uses for the federal K-12 scholarship donation credit at IRC §25F. What the credit is, why the IRS uses this name, how it behaves as a tax item (non-refundable, five-year carryforward, cash only, no double benefit), and what tax professionals need to know before the 2027 tax year.
Read · 9 min - VIDEOAnyone new to the program, parents, donors, educators, advocates
What is ECCA?
A complete guide to the Educational Choice for Children Act (ECCA), also known as the Federal Scholarship Tax Credit (FSTC) and codified at IRC §25F. How the federal scholarship tax credit works, who qualifies, when it begins, and what state participation means.
Read · 10 min - VIDEODonors, taxpayers, accountants
The federal tax credit, explained
How the Education Freedom Tax Credit (EFTC / §25F) works for donors: $1,700 per taxpayer ($3,400 for a married couple who each give, under Treasury's proposed rules), 5-year carryforward, non-refundable, cash only, no double-deduction with §170, plus worked examples.
Read · 15 min - VIDEOParents and guardians of K-12 students
Scholarship eligibility
Which K-12 students qualify for EFTC scholarships, the income limits, what schools and educational expenses are covered, and how families apply through a Scholarship Granting Organization (SGO).
Read · 17 min - VIDEOAdvocates, voters, legislators, journalists, and state officials
When a state opts out, the money leaves
The Education Freedom Tax Credit is federal, so residents can claim up to $1,700 each whether or not their state opts in, by giving to an SGO in any participating state. But under Treasury's October 2026 rules, scholarships go only to students who live in a participating state. Opt out, and your residents fund students elsewhere. The math, the stakes, and why opting in costs the state nothing in scholarship money.
Read · 6 min - VIDEOAdvocates, voters, legislators, journalists
How states opt in
How a state opts in to the federal EFTC scholarship program under Treasury's October 2026 temporary regulations: the election by the governor or a state-law designee, Form 15714 by January 1, 2027 and the SGO list by February 15, 2027, what the state must certify, why it must list every qualifying SGO, legislative vs. executive paths, what citizens can do, and what happens when a state doesn't participate.
Read · 13 min - VIDEOParents of K-12 students with disabilities or IEPs
EFTC for special-needs families
How families of K-12 students with disabilities can use EFTC scholarships for special-needs services, tutoring, private-school tuition, and assistive technology under Treasury's October 2026 proposed regulations: the low-income-area safe harbor for school-selected services, need-based priority, how providers get paid, and what still awaits Treasury's §530 guidance.
Read · 9 min - VIDEOHomeschool, microschool, hybrid-school families
EFTC for homeschool & microschool
Whether and how homeschool, microschool, learning-pod, and hybrid-school families can use EFTC scholarships under Treasury's October 2026 proposed rules: the state-law "school" test, which expenses qualify, how SGOs must pay, and how to find an SGO that supports your educational model.
Read · 9 min - VIDEOHomeschool families, SGOs, policy advocates, journalists
Homeschool eligibility by state
Nearly every K-12 child can be an eligible student under the federal Education Freedom Tax Credit (EFTC / §25F). But the scholarship can only pay for expenses tied to a “school,” and the law, and Treasury’s October 2026 proposed rules, send that word back to each state. An interactive 50-state + DC map: where homeschoolers can likely use the scholarship, where they likely can’t, and the 29 states where it comes down to one box on a form.
Read · 8 min - VIDEODonors and families in states with their own scholarship credits
EFTC vs. state scholarship tax credits
How the federal EFTC tax credit compares to existing state-level scholarship tax credit programs, whether donors can stack the two, and what families should know about each.
Read · 9 min - VIDEOFamilies and donors weighing K-12 education funding options
EFTC vs. 529 plans & ESAs
The Education Freedom Tax Credit (EFTC / §25F), 529 plans, and Coverdell ESAs are three different federal K-12 tax benefits, and the same 2025 law (the One Big Beautiful Bill) both created the EFTC and expanded 529 plans. How each one works, who it's for, and how one family can use more than one.
Read · 7 min - VIDEOAnyone confused by the program's many names
One program, four names
EFTC, FSTC, ECCA and §25F all name the same federal K-12 scholarship tax credit. Treasury's press releases and advocacy groups say EFTC; the IRS, Treasury's October 2026 regulations and Form 8525 say Federal Scholarship Tax Credit (FSTC); Congress passed it as ECCA; and tax professionals cite §25F. Which name to use, who uses which, and how to tell they are the same thing.
Read · 8 min - VIDEODonors, families, SGOs, and advocates tracking the rollout
EFTC timeline & key dates
A dated roadmap of the federal Education Freedom Tax Credit (EFTC / ECCA / §25F), each date marked done or upcoming: enactment, the advance election, Treasury's October 1, 2026 proposed and temporary regulations, the December 1 comment deadline and December 15 hearing, the January 1, 2027 launch and state election deadline, February 15, 2027 state SGO lists, and the 2028 acknowledgment, IRS reporting, filing, and 90% spending dates.
Read · 9 min - VIDEOPrivate, faith-based, and independent school leaders
EFTC for private & faith-based schools
How private, religious, and independent K-12 schools can benefit from the Education Freedom Tax Credit (EFTC / ECCA / §25F): how scholarship dollars reach your school through SGOs, what families need to qualify, and how to prepare for the January 2027 launch.
Read · 9 min - VIDEOFamilies, donors, advocates
SGO scholarships vs. ESAs vs. vouchers
The three main ways policy funds private education, tax-credit scholarships from SGOs (including the federal §25F / EFTC), education savings accounts (ESAs), and vouchers, compared on who funds them, who holds the money, eligibility, and how the federal credit fits and stacks.
Read · 8 min - VIDEODonors, SGO operators, tax advisors
The federal SGO list
For a donation to earn the §25F credit, the scholarship granting organization must be on the list its state submits to the federal government. How an organization gets on that list, what makes it a qualifying SGO, why the IRS list can run behind a state's own roster, and how a donor confirms an organization qualifies before giving.
Read · 15 min - VIDEOFamilies, donors, schools, SGO operators
Qualified expenses
§25F does not define its own expense list. It borrows the Coverdell education savings account list at IRC §530(b)(3)(A), and Treasury's October 2026 proposed regulations keep that cross-reference while its separate §530 guidance is still pending. The list reaches far beyond private-school tuition: tutoring, special-needs services, books, supplies, computers, and internet access. What a §25F scholarship can and cannot pay for, why states cannot narrow it, and how the money gets paid.
Read · 14 min
Running an SGO
What it takes to become a designated Scholarship Granting Organization, from formation to compliance to operations.
- VIDEONonprofits, schools, donors, families
Scholarship Granting Organizations
What an SGO is, how organizations get designated by their state, the 90/10 rule, what compliance looks like, and how donors and families choose between SGOs.
Read · 11 min - VIDEOFirst-time founders, nonprofit leaders, schools, community groups
How to start an SGO
The complete, start-from-nothing guide to launching a Scholarship Granting Organization (SGO) for the federal Education Freedom Tax Credit (EFTC / ECCA / §25F): incorporating a nonprofit, getting an EIN, filing for 501(c)(3) (Form 1023 vs 1023-EZ, real fees and timelines), opening the required separate bank accounts, registering to fundraise, meeting every §25F operating rule, getting on your state's list, and a step-by-step checklist, written for founders with zero nonprofit experience.
Read · 38 min - Existing 501(c)(3) leaders, school foundations, scholarship funds, church and community nonprofits
Retrofit an existing nonprofit into an SGO
You are already a 501(c)(3), so most of the formation work is behind you. What carries over (your exemption, EIN, and registrations), the one test that decides whether retrofitting is the right move (Treasury's 85% scholarship-activity safe harbor; below it, 90% of ALL gross receipts must go to scholarships), the five §25F gaps an existing organization has to close, the single board meeting that closes them, and when forming a separate entity is the honest answer instead.
Read · 16 min - VIDEOSGO operators, boards, nonprofit finance and compliance staff
The 90/10 rule & SGO compliance
A deep dive into the federal §25F rules every Scholarship Granting Organization must meet, updated for Treasury's October 2026 proposed regulations: the 90/10 rule (90% of income to scholarships, measured on total gross receipts or, under the 85% safe harbor, on the §25F account), the deadline to spend each year's income, the 10-student rule, renewal and sibling priority, anti-earmarking, disqualified persons, separate accounts, donor substantiation, and income verification.
Read · 16 min - VIDEOSGO founders and operators, donors, advisors, state officials
The proposed regulations, walked through
A practical walkthrough of the §25F (EFTC / FSTC) proposed regulations and temporary regulations Treasury and the IRS released October 1, 2026, organized for donors, families, SGO operators, and states: what is binding, what is proposed and can be relied on for 2027, and what is still open. Covers the $3,400 joint-return reading, state-credit ordering, the 90% test and 85% safe harbor, income verification, payments and audits, donor numbers and Form 8525, state election deadlines, key dates, and what changed from Treasury's June preview.
Read · 26 min - VIDEOSGO founders, operators, boards, nonprofit finance staff
SGO software
What SGO software does and why the federal §25F 90/10 rule makes it essential: donor onboarding and identity verification, payment processing, per-donor §25F receipts, family applications and income verification, an award engine with renewal and sibling priority, separate-account fund accounting, state reporting, and an audit trail. A buyer's checklist, a build-vs-buy guide, and the four buying-decision questions, pricing model, fund custody, disbursement controls, and data portability, to ask any vendor before you sign.
Read · 13 min - VIDEOSGO operators, boards, nonprofit finance and compliance staff
SGO compliance calendar
A milestone-by-milestone view of what a Scholarship Granting Organization must do to stay compliant with §25F: state list timing, the 90/10 test, annual third-party audits, donor acknowledgments and unique donor numbers, separate-account rules, and yearly renewals.
Read · 13 min - VIDEOSGO operators, boards, nonprofit finance staff
Disbursing scholarship funds
Money-out is the hardest part of running a Scholarship Granting Organization. The four payment routes Treasury's October 2026 proposed rules allow (school charges paid to the school, verified vendors, receipted family reimbursements, qualified digital wallets), why scholarship money must stay in the §25F segregated account, the record every disbursement needs, when a payment counts toward the 90% test, and the controls that keep disbursement audit-clean.
Read · 17 min - VIDEOSGO operators, program staff, boards
Income verification
Every §25F scholarship goes to a household at or below 300% of area median gross income, and the SGO must confirm it. How Treasury's October 2026 proposed rules define AMGI, the household, and household income, the four verification methods (direct documents, SNAP/TANF/WIC/Section 8/SSI award letters, the low-income tutoring and special-needs safe harbor, and foster children), how to size the award, and how to keep records that survive the annual audit.
Read · 17 min - VIDEOSGO founders, operators, boards, development staff
Recruiting donors
A §25F scholarship organization runs on donations, and the credit changes the pitch: a donor redirects up to $1,700 of federal tax they already owe ($3,400 for a married couple when each spouse gives, under Treasury's proposed rules). Who your donors are (anywhere in the U.S.), the dollar-for-dollar message that lands, what counts as a qualifying gift, how the 90% rule and the 85% safe harbor limit what you can spend to find donors, and a first-year acquisition plan.
Read · 16 min - VIDEOExisting state-program SGO operators, donors, advisors
State programs and the EFTC
Long before the federal Education Freedom Tax Credit, states ran their own tax-credit scholarship programs, Arizona, Florida, Pennsylvania, Indiana, Ohio, Georgia, Iowa and more. How those state programs work, how the new federal §25F credit interacts with them, whether a donor can use both, and what an organization already running a state program needs to know to add the federal layer.
Read · 15 min
Build your own SGO, free
These guides as a working checklist: 21 steps across 5 stages, your state’s filing specifics, and templates that fill themselves in from your answers.
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