IRC Section 25F
The Education Freedom Tax Credit
A new federal credit beginning in 2027 lets taxpayers direct part of what they already owe toward K-12 scholarships.
- Up to $1,700 per person
- Each individual can claim a credit of up to $1,700.
- $3,400 for married couples
- A married couple filing jointly can claim up to $3,400, but each spouse must make their own separate gift.
- It reduces tax you owe
- The credit reduces federal income tax owed. It only helps to the extent you owe federal tax.
- Unused credit carries forward
- Any unused credit carries forward for up to 5 years.
- Individuals only
- Businesses cannot claim this credit.
- No double benefit
- The same gift cannot also be deducted as a charitable contribution.
- Paperwork
- You'll receive an acknowledgment letter by January 31 with a unique donor number. Claim the credit on IRS Form 8525 with your tax return.
A simple example
You give $1,700.
Your federal tax bill goes down $1,700.
A child gets a scholarship.
This information is general and is not tax advice. Consult your tax advisor about your situation.