Federal Scholarship Tax Credit: Taxpayer Federal Credit
The Federal Scholarship Tax Credit program (FSTC) offers a unique dollar-for-dollar federal tax credit for any taxpayer who wants to donate some of the money they’d pay in taxes to a scholarship granting organization instead. A tax credit reduces the amount of taxes you owe the government. A tax deduction reduces the amount of your income that you are taxed on. So how does the federal scholarship tax credit work?
Any taxpayer, regardless of if they have children or not, can make a donation of up to $1,700 to an approved Scholarship Granting Organization (SGO) anytime during the calendar year starting in 2027. When they go to file their federal income taxes in the spring of 2028 they can claim a dollar-for-dollar tax credit for the amount they donated.
For example, let’s say you donate $1,000 to an approved SGO in March of 2027. When you file your taxes in April of 2028 you can claim a tax-credit of $1,000.
Taxpayers can donate more than $1,700 to a SGO if they choose to do so, but the maximum that can be claimed on their tax return is $1,700.
Frequently Asked Questions
In Your State
Governor Kay Ivey has indicated she will opt the state of Alabama into the Federal Scholarship Tax Credit program through an executive order signed in January of 2026.
What does this mean for Alabamians? Starting in January of 2027 taxpayers in Alabama can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
In January of 2026, Governor Mike Dunleavy indicated that he will be opting the state of Alaska into the program.
What does this mean for Alaskans? Starting in January of 2027 taxpayers in Alaska can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
The Governor approved the state’s first 20 SGOs on October 2, 2026, and plans to submit a final 2027 SGO list to the IRS in early December. The list of the initial 20 SGOs is available here.
Arizona has not yet made a decision about its participation in the Federal Scholarship Tax Credit program.
If the state chooses not to participate in the program, families can still receive the tax credit by donating to an approved SGO in another state. Stay tuned for a list of approved SGOs!
Governor Sarah Huckabee Sanders opted the state of Arkansas into the Federal Scholarship Tax Credit program through an executive order in January of 2026.
What does this mean for Arkansans? Starting in January of 2027 taxpayers in Arkansas can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
California has not yet made a decision about its participation in the Federal Scholarship Tax Credit program.
If the state chooses not to participate in the program, families can still receive the tax credit by donating to an approved SGO in another state. Stay tuned for a list of approved SGOs!
Colorado Governor Jared Polis announced in December of 2025 that he plans to opt Colorado into the Federal Scholarship Tax Credit program.
What does this mean for Coloradans? Starting in January of 2027 taxpayers in Colorado can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
Connecticut has not yet made a decision about its participation in the Federal Scholarship Tax Credit program.
If the state chooses not to participate in the program, families can still receive the tax credit by donating to an approved SGO in another state. Stay tuned for a list of approved SGOs!
The School + State Finance Project released a FAQ document regarding the FSTC program and what that means for the state of Connecticut.
Delaware has not yet made a decision about its participation in the Federal Scholarship Tax Credit program.
If the state chooses not to participate in the program, families can still receive the tax credit by donating to an approved SGO in another state. Stay tuned for a list of approved SGOs!
D.C. has not yet made a decision about its participation in the Federal Scholarship Tax Credit program.
If D.C. chooses not to participate in the program, families can still receive the tax credit by donating to an approved SGO in another state. Stay tuned for a list of approved SGOs!
Governor Ron DeSantis announced at the end of January 2026 that he plans on opting Florida into the Federal Scholarship Tax Credit program.
What does this mean for Floridians? Starting in January of 2027 taxpayers in Florida can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
Governor Brian Kemp announced in January of 2026 that he is opting the state of Georgia into the Federal Scholarship Tax Credit program.
What does this mean for Georgians? Starting in January of 2027 taxpayers in Georgia can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
Governor Josh Green’s office told EdWeek that he is not opting Hawaii into the Federal Tax Credit program in January of 2026; however, no official decision has been made.
If Hawaii does not opt into the program, families can still receive the tax credit by donating to an approved SGO in another state. Stay tuned for a list of approved SGOs!
A spokesperson for Governor Brad Little shared in January of 2026 that the governor plans to opt Idaho into the Federal Scholarship Tax Credit program through an executive order.
What does this mean for Idahoans? Starting in January of 2027 taxpayers in Idaho can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
Illinois has not yet made a decision about its participation in the Federal Scholarship Tax Credit program.
If the state chooses not to participate in the program, families can still receive the tax credit by donating to an approved SGO in another state. Stay tuned for a list of approved SGOs!
Governor Mike Braun announced in January of 2026 that he is opting Indiana into the Federal Scholarship Tax Credit program.
What does this mean for Hoosiers? Starting in January of 2027 taxpayers in Indiana can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
Gov. Kim Reynolds released a statement announcing she will opt Iowa into the Federal Scholarship Tax Credit in January of 2026.
What does this mean for Iowans? Starting in January of 2027 taxpayers in Iowa can donate to an approved scholarship granting organization (SGO) and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
Gov. Laura Kelly vetoed legislation opting Kansas into the Federal Tax Credit Program and lawmakers overrode the veto in April of 2026, opting Kansas into the program.
What does this mean for Kansans? Starting in January of 2027 taxpayers in Kansas can donate to an approved scholarship granting organization (SGO) and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
The Kentucky legislature overrode Gov. Andy Beshear’s veto and passed legislation that opts Kentucky into the Federal Tax Credit Program.
What does this mean for Kentuckians? Starting in January of 2027 taxpayers in Kentucky can donate to an approved scholarship granting organization (SGO) and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
Governor Jeff Landry stated in December of 2025 that he will opt Louisiana into the Federal Scholarship Tax Credit program.
What does this mean for Louisianians? Starting in January of 2027 taxpayers in Louisiana can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
Maine has not yet made a decision about its participation in the Federal Scholarship Tax Credit program.
If the state chooses not to participate in the program, families can still receive the tax credit by donating to an approved SGO in another state. Stay tuned for a list of approved SGOs!
Maryland has not yet made a decision about its participation in the Federal Scholarship Tax Credit program.
If the state chooses not to participate in the program, families can still receive the tax credit by donating to an approved SGO in another state. Stay tuned for a list of approved SGOs!
Massachusetts has not yet made a decision about its participation in the Federal Scholarship Tax Credit program.
If the state chooses not to participate in the program, families can still receive the tax credit by donating to an approved SGO in another state. Stay tuned for a list of approved SGOs!
Michigan has not yet made a decision about its participation in the Federal Scholarship Tax Credit program.
If the state chooses not to participate in the program, families can still receive the tax credit by donating to an approved SGO in another state. Stay tuned for a list of approved SGOs!
Minnesota Governor Tim Walz has indicated that he will not opt the state into the Federal Scholarship Tax Credit Program.
Even if the state chooses not to participate in the program, families can still receive the tax credit by donating to an approved SGO in another state. Stay tuned for a list of approved SGOs!
Governor Tate Reeves announced in January of 2026 that he will opt Mississippi into the Federal Scholarship Tax Credit program.
What does this mean for Mississippians? Starting in January of 2027 taxpayers in Mississippi can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
Governor Mike Kehoe announced in his 2026 State of the State address that he will opt Missouri into the Federal Scholarship Tax Credit program.
What does this mean for Missourians? Starting in January of 2027 taxpayers in Missouri can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
Governor Greg Gianforte stated that he had opted Montana into the Federal Scholarship Tax Credit program in January of 2026.
What does this mean for Montanans? Starting in January of 2027 taxpayers in Montana can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
Governor Jim Pillen signed an executive order in September of 2025 indicating the state’s intent to opt into the Federal Scholarship Tax Credit program.
What does this mean for Nebraskans? Starting in January of 2027 taxpayers in Nebraska can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
Governor Joe Lombardo stated in January of 2026 that Nevada is opting into the Federal Scholarship Tax Credit program.
What does this mean for Nevadans? Starting in January of 2027 taxpayers in Nevada can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
Governor Kelly Ayotte announced in January of 2026 that New Hampshire is opting into the Federal Scholarship Tax Credit program.
What does this mean for New Hampshirites? Starting in January of 2027 taxpayers in New Hampshire can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
New Jersey has not yet made a decision about its participation in the Federal Scholarship Tax Credit program.
If the state chooses not to participate in the program, families can still receive the tax credit by donating to an approved SGO in another state. Stay tuned for a list of approved SGOs!
New Mexico has not yet made a decision about its participation in the Federal Scholarship Tax Credit program.
If the state chooses not to participate in the program, families can still receive the tax credit by donating to an approved SGO in another state. Stay tuned for a list of approved SGOs!
New York Governor Kathy Hochul indicated in May of 2026 that she intends to opt New York into the Federal Scholarship Tax Credit program.
What does this mean for New Yorkers? Starting in January of 2027 taxpayers in New York can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
Legislators in North Carolina enrolled the state into the Federal Scholarship Tax Credit program through a vote to override Gov. Josh Stein’s veto.
What does this mean for North Carolinians? Starting in January of 2027 taxpayers in North Carolina can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
Governor Kelly Armstrong stated in January of 2026 that North Dakota will participate in the Federal Scholarship Tax Credit program.
What does this mean for North Dakotans? Starting in January of 2027 taxpayers in North Dakota can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
Governor Mike DeWine has opted Ohio into the Federal Scholarship Tax Credit program.
What does this mean for Ohioans? Starting in January of 2027 taxpayers in Ohio can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
Governor Kevin Stitt has opted Oklahoma into the Federal Scholarship Tax Credit program.
What does this mean for Oklahomans? Starting in January of 2027 taxpayers in Oklahoma can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
In August of 2025 a spokesperson for Governor Tina Kotek stated that Oregon will not participate in the Federal Scholarship Tax Credit program.
Even if the state chooses not to participate in the program, families can still receive the tax credit by donating to an approved SGO in another state. Stay tuned for a list of approved SGOs!
Pennsylvania has not yet made a decision about its participation in the Federal Scholarship Tax Credit program.
If the state chooses not to participate in the program, families can still receive the tax credit by donating to an approved SGO in another state. Stay tuned for a list of approved SGOs!
Rhode Island has not yet made a decision about its participation in the Federal Scholarship Tax Credit program.
If the state chooses not to participate in the program, families can still receive the tax credit by donating to an approved SGO in another state. Stay tuned for a list of approved SGOs!
A spokesperson for Governor Henry McMaster stated in January of 2026 that the governor has opted South Carolina into the Federal Scholarship Tax Credit Program.
What does this mean for South Carolinians? Starting in January of 2027 taxpayers in South Carolina can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!
Governor Larry Rhoden announced that South Dakota will participate in the Federal Scholarship Tax Credit program in November of 2025.
What does this mean for South Dakotans? Starting in January of 2027 taxpayers in South Dakota can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!.
Tennessee Governor Bill Lee has indicated that he will opt the state into the Federal Scholarship Tax Credit program.
What does this mean for Tennesseans? Starting in January of 2027 taxpayers in Tennessee can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!.
In December of 2025 Governor Greg Abbott announced that Texas intends to opt into the Federal Scholarship Tax Credit program.
What does this mean for Texans? Starting in January of 2027 taxpayers in Texas can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!.
Governor Spencer Cox stated in January of 2026 that Utah is opting into the Federal Scholarship Tax Credit program.
What does this mean for Utahns? Starting in January of 2027 taxpayers in Utah can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!.
Vermont has not yet made a decision about its participation in the Federal Scholarship Tax Credit program.
If the state chooses not to participate in the program, families can still receive the tax credit by donating to an approved SGO in another state. Stay tuned for a list of approved SGOs!
Stay tuned for a list of approved SGOs!.
Governor Glenn Youngkin stated in January of 2026 that Virginia has opted into the Federal Scholarship Tax Credit program.
What does this mean for Virginians? Starting in January of 2027 taxpayers in Virginia can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!.
Washington has not yet made a decision about its participation in the Federal Scholarship Tax Credit program.
If the state chooses not to participate in the program, families can still receive the tax credit by donating to an approved SGO in another state. Stay tuned for a list of approved SGOs!
Governor Patrick Morrisey has opted West Virginia into the Federal Scholarship Tax Credit program.
What does this mean for West Virginians? Starting in January of 2027 taxpayers in West Virginia can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!.
Governor Tony Evers vetoed a bill that would have opted Wisconsin into the Federal Scholarship Tax Credit program.
Even if the state chooses not to participate in the program, families can still receive the tax credit by donating to an approved SGO in another state.
Stay tuned for a list of approved SGOs!.
Governor Mark Gordon has opted Wyoming into the Federal Scholarship Tax Credit program.
What does this mean for Wyoming residents? Starting in January of 2027 taxpayers in Wyoming can donate to an approved SGO and claim up to a $1,700 tax credit when they file their 2027 federal taxes.
Stay tuned for a list of approved SGOs!.
More Information:
Looking for more information about the education options or funding opportunities available to your family? Check out these resources:
Find out how your student can receive a scholarship funded through the Federal Tax Credit Scholarship program.
Learn more about the different school options available in your state.
