Skip to content
ChoicePaid
Menu
PlatformFor schoolsFor familiesProgram guidesStatesDirectoryCompareGuidesPricingDevelopersProgram finder (families)Application deadlinesAmounts by stateInvoice checker (any program)Payment checker (Odyssey CSV)Offering checkerMulti-state application plannerApplication checklistPayout trackerReceipt checkerInvoice builder (6 states)Sign inGet started

What a scholarship gift is worth to you in 2027

Starting January 1, 2027, a gift to a scholarship granting organization can earn up to $1,700 a year in federal tax credit. Estimate yours.

An estimate, not tax advice. Rules cited to Public Law 119-21 and the IRS, checked Oct 15, 2026.

Estimated federal credit

$1,700

  • The part of the gift that earns this credit can't also be deducted as a charitable gift.
  • If your tax is less than the credit, the rest carries forward for up to five years.

The rules behind the number

  • Starting January 1, 2027, individual taxpayers can claim a federal tax credit of up to $1,700 a year for cash contributions to Scholarship Granting Organizations (SGOs).1
  • The credit is reduced by any state tax credit the taxpayer claims for the same contributions.2
  • A contribution that earns the credit can't also be deducted as a charitable contribution.3
  • Unused credit carries forward for up to five years.4
  • A state only takes part if it elects to: the Governor (or whoever state law designates) gives the IRS a list of qualifying SGOs located in the state, by January 1 of each year. Contributions must fund scholarships solely within the state where the SGO is listed.4
  • It can't earmark contributions for a particular student. It gives priority to last year's recipients, then to their siblings, and can't award scholarships to disqualified persons (rules like those for private foundations' insiders).3

Questions

How much can I claim?

Up to $1,700 a year in federal tax credit for cash gifts to scholarship granting organizations (SGOs), starting January 1, 2027. A state tax credit for the same gift reduces the federal credit.

Can I also deduct the gift?

Not the part that earns the federal credit. A contribution that earns the credit can't also be deducted as a charitable contribution.

What if my tax bill is smaller than the credit?

Unused credit carries forward for up to five years.

Can I choose which student gets my gift?

No. An SGO can't earmark contributions for a particular student.

Which organizations qualify?

Only SGOs on a participating state's list, which the state sends the IRS by January 1 each year. 30 states had opted in as of September 14, 2026.

See which states are in, or what the scholarships mean for families.

Sources

  1. 1. Federal Scholarship Tax Credit (FSTC), Internal Revenue Service, updated Sep 16, 2026
  2. 2. Public Law 119-21, sec. 70411 (26 U.S.C. 25F and 139K), Library of Congress (enrolled law), p. 145, updated Jul 4, 2025
  3. 3. Public Law 119-21, sec. 70411 (26 U.S.C. 25F and 139K), Library of Congress (enrolled law), p. 146, updated Jul 4, 2025
  4. 4. Public Law 119-21, sec. 70411 (26 U.S.C. 25F and 139K), Library of Congress (enrolled law), p. 147, updated Jul 4, 2025