On October 1, 2026, Treasury and the IRS released proposed regulations for a new federal tax credit for individuals who donate to scholarship granting organizations (SGOs) that fund K-12 scholarships.

Key points

• Credit amount: a nonrefundable federal income tax credit of up to $1,700 per individual per year, or up to $3,400 for married couples filing jointly.
• Start date: qualified cash contributions made on or after January 1, 2027.
• State participation: states choose whether to opt in. Donors can give to an SGO in any participating state, no matter where they live.
• How scholarships can be used: tuition, tutoring, special-needs services, books, and similar education costs.

How we can help: If you plan to give to education charities in 2027, we can help you weigh this credit against a regular charitable deduction. Contact Teddy Accounting Services to talk it through.

Source: IRS news release IR-2026-117