Federal Scholarship Tax Credit

 

Expanding  Access to Catholic Education Through the New Federal Scholarship Tax Credit

The One Big Beautiful Bill Act (OBBBA) established a federal tax credit for donations to scholarship-granting organizations (SGOs) that provide funding for students to access tuition assistance and other education-related expenses at K-12 public, private, or charter schools. Beginning in 2027, donors across the country can make a gift to a qualified SGO like the Catholic Schools Foundation and receive a dollar-for-dollar federal income tax credit of up to $1,700, offsetting their tax liability. Each state must opt in to allow SGOs to participate in the federal tax credit program.

Who Can Give?

  • Any U.S. taxpayer can donate up to $1,700 annually to an eligible 501(c)(3) SGO and receive a dollar-for-dollar federal tax credit.
  • This credit is a direct reduction of your tax owed, making it more valuable than a deduction.

Will Massachusetts Participate?

  • At this time, it is not clear whether Massachusetts will opt into the program. Participation depends on the decision by the Governor. CSF is ready to serve more students if the state participates.
  • If Massachusetts does not participate, taxpayers are still eligible to claim the tax credit through a qualified SGO in another state.

Who Can Receive a Scholarship?

  • Students from households earning less than 300% of their area’s median income (HUD guidelines show this includes roughly 85–90% of households).
  • Additional eligibility rules are determined by each SGO.
  • Scholarship must be used in the state where the SGO is located.

 Is there a limit to how many tax credits are available?

  • No. There is no national cap, all qualifying donations are eligible for the credit.

How Are SGOs Approved?

  • Governors in each state decide which SGOs are eligible to receive donations and award scholarships. The details of how this will work are not yet defined.

Why give through the Catholic Schools Foundation?

CSF is the largest K–12 Scholarship Granting Organization in Massachusetts. For over 30 years, CSF has led the charge in providing scholarship aid to families, providing in-need students with a high-quality Catholic education.   CSF’s strong track record of success, financial transparency, and commitment to student achievement position us as the state’s premier scholarship-granting organization. Your donation will directly help students access a life-changing education.