The U.S. Department of the Treasury has previewed forthcoming guidance for the new federal scholarship tax credit, known as the Education Freedom Tax Credit, which was enacted as part of the Working Families Tax Cuts. This initiative aims to expand educational opportunities by encouraging private contributions to scholarship-granting organizations.
Treasury Secretary Scott Bessent emphasized the significance of this step, saying, “Under President Trump’s leadership, we are taking a transformative step toward an education system that fits the student rather than the other way around.” He added, “At Treasury, we take seriously the work of implementing this federal tax credit faithfully and effectively. We are committed to providing certainty to states, scholarship-granting organizations, taxpayers, and families alike, as well as making certain that this process is easy to navigate.”
The guidance is designed to offer states, scholarship-granting organizations, taxpayers, and other stakeholders a clear framework for the credit's launch in January 2027. The Treasury expects to issue proposed regulations by the end of September, which can be relied upon for tax year 2027.
The new scholarship tax credit, under section 25F, supports K–12 education expenses. It allows participating states to opt into the program and provide lists of eligible scholarship-granting organizations. Taxpayers making qualified contributions to these organizations can then claim a federal tax credit, helping families access diverse educational options.