The Education Freedom Tax Credit (EFTC)

$1,700 back on your federal taxes, for a gift that becomes a scholarship.

Any taxpayer, in 31 states, starting January 1, 2027. Tennessee is one of them.

State count: eftccredit.com state tracker, as of October 20, 2026. The IRS table lists 30, as of September 14, 2026; New York announced October 9, 2026 and is not on it yet.

Page updated October 22, 2026, against the Treasury regulations of October 1, 2026.

What a parent needs to hear

  1. Giveup to $1,700 to a scholarship organization on your state's list.
  2. Claimit on your federal return. It comes back dollar for dollar.
  3. A childat a school like yours gets a scholarship.

That is the whole message. The rest of this page is for the people who have to deliver it.

Gifts begin to qualify on January 1, 2027.

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This page is the credit. EFTC Readiness is the work.

In 30 seconds

Six things to know.

  • A credit, not a deduction.

    A $1,700 gift means $1,700 less owed in federal tax.

    To a parentIf you give $1,700 and owe $1,700 in federal tax, you owe nothing.

  • Nearly every family qualifies.

    Households under 300% of area median income. The Treasury estimates about 96% of children.

    To a parentThese scholarships are for families like yours, not only families in need.

  • The school never touches the money.

    Individuals give to a scholarship organization on the state's list. It awards the scholarships and pays tuition straight to the school.

    To a parentYou give to the scholarship organization. It funds scholarships for schools like ours. We help you apply.

  • It renews every year.

    $1,700 per taxpayer, every year, for as long as the law stands.

    To a parentThis is not a one-time ask. It is every year.

  • Some families cannot use it.

    The credit applies after the Child Tax Credit. Ask before you ask them.

    To a parentIf you have several children and a modest income, talk to us before you give. The credit may not reach you.

  • February 15 is the real deadline.

    States file their lists of scholarship organizations by February 15, 2027. No list, no credit in that state.

For one household

What comes back, and when.

Put in a household's numbers and see the credit, how much of it can be used this year, and what waits for a later year. This is the question a family will ask you at the parent night.

Filing status

What comes back

Your federal credit
$3,400
Estimated federal income tax, after the Child Tax Credit
$2,040
Credit you can use this year
$2,040
Carried forward, up to five years
$1,360
What the gift costs you this year, after the credits
$1,360

About $1,360 of this credit waits for a later year. Ask before you give, or size the gift to the tax you owe.

Not tax advice. Confirm with your return or a tax professional. For the school's side of this: EFTC Readiness. For your own families: Begin the Conversation.

Read this before you trust the number

  1. This is an estimate for planning, not a return. It uses the 2026 federal brackets and standard deduction (the 2027 figures are not published yet), assumes you take the standard deduction, and ignores the alternative minimum tax, capital gains rates, and state income tax.
  2. The credit applies after the Child Tax Credit and other nonrefundable credits. If those already take your federal income tax to zero, there is nothing left for this credit to offset this year.
  3. Withholding does not matter. What matters is your total federal income tax for the year, not whether you get a refund or write a check in April. On last year's Form 1040, line 22 is your tax after credits; that is roughly the most this credit can offset.
  4. A married couple can claim up to $3,400 on a joint return only when each spouse makes their own gift. One $3,400 gift from one spouse earns $1,700. That is Treasury's position in the proposed regulations of October 1, 2026, which are not yet final.
  5. Unused credit carries forward up to five years, oldest first. The part of a gift above the cap does not become credit later; it may be deductible if you itemize, but the dollars that earned the credit cannot also be deducted.
  6. Only cash counts (check, card, bank transfer, payroll deduction), given to a scholarship organization on the IRS list for your state and designated as a Section 25F gift when you make it.
  7. If your state gives its own tax credit for the same gift, the federal credit is the lesser of the gift minus the state credit, or $1,700.
  8. You never give the scholarship organization your Social Security number. By January 31 it sends you a letter with the year's gifts and a donor number; that number goes on Form 8525 with your return. Keep the letter.

The calendar

December 1, 2026
Public comments due on the proposed Treasury regulations.
December 15, 2026
Public hearing on the proposed regulations.
January 1, 2027
The credit begins. Gifts made on or after this date qualify.
January 1, 2027
States must have opted in and filed their election with the IRS. 30 have filed; New York has announced.
February 15, 2027
States submit their lists of approved scholarship organizations. For a school, this is the real deadline.
January 31, 2028
Each scholarship organization sends every giver a letter listing the year's gifts and a donor number. Keep it.
Spring 2028
Givers claim the 2027 credit on Form 8525 with their federal return, using that donor number. No Social Security number ever goes to the scholarship organization.
December 31, 2028
Scholarship organizations must have spent 90% of their 2027 receipts on scholarships.

Where it applies

31 states are in for 2027.

The IRS keeps the official list, 30 states as of September 14, 2026. New York announced October 9, 2026 and is not on the IRS table yet. Minnesota and Oregon have said no for 2027. In Arizona and Wisconsin the governor vetoed the opt-in bill. A state stays on the 2027 list only if it files its list of approved scholarship organizations with Treasury by February 15, 2027.

The IRS list The state tracker
Where the Education Freedom Tax Credit applies in 202730 states on the IRS list, shown in gold. New York announced and not yet listed, shown hatched. Arizona, Wisconsin: the governor vetoed an opt-in bill, shown dotted. Minnesota, Oregon have said no for 2027, shown cross-hatched. The rest, undecided, are dark.Alabama: on the IRS list for 2027Alaska: on the IRS list for 2027Arizona: the governor vetoed the opt-in bill in April 2026Arkansas: on the IRS list for 2027California: undecidedColorado: on the IRS list for 2027Connecticut: undecidedDelaware: undecidedDistrict of Columbia: undecidedFlorida: on the IRS list for 2027Georgia: on the IRS list for 2027Hawaii: undecidedIdaho: on the IRS list for 2027Illinois: undecidedIndiana: on the IRS list for 2027Iowa: on the IRS list for 2027Kansas: on the IRS list for 2027Kentucky: on the IRS list for 2027Louisiana: on the IRS list for 2027Maine: undecidedMaryland: undecidedMassachusetts: undecidedMichigan: undecidedMinnesota: the governor said no in March 2026Mississippi: on the IRS list for 2027Missouri: on the IRS list for 2027Montana: on the IRS list for 2027Nebraska: on the IRS list for 2027Nevada: on the IRS list for 2027New Hampshire: on the IRS list for 2027New Jersey: undecidedNew Mexico: undecidedNew York: announced October 9, 2026, not on the IRS table yetNorth Carolina: on the IRS list for 2027North Dakota: on the IRS list for 2027Ohio: on the IRS list for 2027Oklahoma: on the IRS list for 2027Oregon: the governor said no in June 2026Pennsylvania: undecidedRhode Island: undecidedSouth Carolina: on the IRS list for 2027South Dakota: on the IRS list for 2027Tennessee: on the IRS list for 2027Texas: on the IRS list for 2027Utah: on the IRS list for 2027Vermont: undecidedVirginia: on the IRS list for 2027Washington: undecidedWest Virginia: on the IRS list for 2027Wisconsin: the governor vetoed the opt-in bill in March 2026Wyoming: on the IRS list for 2027
On the IRS list for 2027 (30) Announced, not listed yet (1) Governor vetoed the opt-in bill (2) Governor said no for 2027 (2) Undecided (16, counting D.C.)

If your state is in, this is for your school.

The credit is the easy part. The work is a family list built, a letter sent, a parent night held, and a board that said yes. Thirty minutes with us and you will know exactly what your school has to have ready.

Begin the ConversationEFTC Readiness

The readiness checklist

Twelve things that have to be true for your school to receive the credit well.

The checklist covers your state, the scholarship organization, your family list, the letter to your families, the donor ask, your board, and your calendar. One page. Free. We will also send you the tax credit updates we send our own clients, and nothing else.

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The checklist is the first hour of EFTC Readiness.

The whole thing

  • EFTC Readiness, the programLive
  • How it worksBeing written
  • Should we do this in 2027?Being written
  • The timeline, 2026 to 2028Being written
  • TennesseeBeing written
  • Estimate what your families could giveBeing written
  • Questions boards actually askBeing written
  • For your families: the page you can send themBeing written

These sections are being written now. The checklist signup above is the way to hear when each one is live.

The schools that outlast us are also the hardest to build. You don't have to figure that out alone.

We have opened, led, and steadied schools in their hardest seasons. When you're ready to talk, we're ready to listen.

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New for 2027: EFTC Readiness We get schools ready.

This page is general information, not tax or legal advice. The Education Freedom Tax Credit is new, and Treasury is still finalizing its rules. Whether a family can use the credit depends on their own return. Talk with your tax professional about your situation.