Federal Scholarship Tax Credit Overview

Landmark school choice legislation has been passed into law at the federal level. Congress has enacted a federal tax credit beginning in 2027, which will provide a dollar-for-dollar federal income tax credit for taxpayers who make a contribution to Scholarship Granting Organizations (SGOs), like GOAL, to fund K-12 education expenses, including private school tuition. This new tax credit has many similarities to the Qualified Education Expense (GOAL) Tax Credit here in Georgia.

This is a wonderful opportunity to provide more financial assistance to families seeking the best educational environment for their children and GOAL will be a strong advocate for and administrator of this new program. We will provide updated communication leading up to the effective date of January 1, 2027 of this new credit as we learn more about the process, rules, and regulations.

Here's what you need to know:

Tax Credit for Individuals

• Taxpayers will receive a 100% non-refundable federal income tax credit for individual donations to Scholarship Granting Organizations (SGOs) like GOAL
• There is a limit of $1,700 that can be contributed for a tax credit per taxpayer per year ($3,400 for married couples) 
• The tax credit is available to taxpayers in all 50 states
• Corporations cannot participate
• There is no national aggregate cap on total contributions
• Taxpayers can participate in both Georgia GOAL and this new federal tax credit by making a contribution for each

State-Level Participation

• States must formally opt in for SGOs in that state to offer scholarships under the program. GOAL will be working with the Governor’s office and potentially Georgia lawmakers to ensure that Georgia is a participating state
• SGOs may only issue scholarships to families within their own state

Family and Student Eligibility

• Scholarship recipients must come from households earning up to 300% of area median income. The legislation currently bases the ‘area median income’ on HUD, which is either your county or metropolitan area: https://www.huduser.gov/portal/datasets/il/il2025/select_Geography.odn
• Eligible expenses are the same as those allowed through Coverdell Education Savings Accounts, including:
• Tuition and fees
• Books, supplies, and equipment
• Academic tutoring
• Special needs services for special needs beneficiaries
• Possible other expenses, with further stipulations, including transportation, extended day programs, and computer equipment

Requirements for Scholarship Granting Organizations (SGOs)
GOAL meets all of the following requirements 

• Must be a 501(c)(3) nonprofit, not a private foundation
• Must provide scholarships to 10+ students attending different schools
• Must spend at least 90% of the income received on scholarships
• Cannot earmark funds for specific students

What’s Next?

• Rules and Regulations for the program must be produced by the US Treasury
• GOAL will be working with Governor Kemp’s office to ensure that Georgia opts IN for the program
• Expect to receive more direct communication from GOAL in 2026 about this opportunity