Federal Scholarship Tax Credit 2027: What Is Decided

Form 15714 runs a single page above its instructions, and one of its six parts exists only so a state can confirm that it did not attach anything.

That part is numbered V, and it reads: "I hereby confirm that this Advance Election does not include any attachments, including any list of scholarship granting organizations or information relating to such organizations." Part IV asks who is signing — the governor, or an individual designated under state law to make elections on the state's behalf with respect to federal tax credits. Part VI is a penalties-of-perjury statement. That is the whole ceremony by which a state joins the new federal scholarship tax credit, and it tells a parent almost nothing about applying for anything, because the list of organizations that would actually hand out money is expressly not in the envelope.

This is the layer families keep collapsing. The federal credit is not a state program, and it is not the state tax-credit scholarship your neighbor's kids are on. Different money, different reviewer. Which machine you are standing in front of is worth settling before you read another word here, because the answer changes who takes your paperwork.

Everything below is federal statute and Treasury or IRS material as I read it on August 22, 2026. Proposed regulations had not been published on that date. I am a parent working from the code and agency documents, not an attorney or a tax preparer, and this is not tax advice.

What Congress already decided, in July 2025

Internal Revenue Code §25F was added by section 70411(a)(1) of Public Law 119-21, enacted July 4, 2025. It applies to taxable years ending after December 31, 2026. None of what follows is waiting on a regulation.

The credit belongs to a donor, not to a family. A taxpayer who makes a qualified contribution — cash, to a scholarship granting organization on a participating state's list — gets a credit against federal income tax. It is capped at $1,700 for the taxable year, it is nonrefundable, and unused amounts carry forward no further than the fifth taxable year after the one in which the credit arose, first in first out. The credit is reduced by any state credit claimed for the same contribution, and a contribution run through §25F cannot also be deducted under §170.

The student test has two halves. An eligible student is in a household whose income for the calendar year before the scholarship application is not greater than 300 percent of area median gross income, the term as it is used in §42, and is eligible to enroll in a public elementary or secondary school. Not enrolled. Eligible to enroll.

The expense list is the Coverdell list. §25F(c)(4) borrows §530(b)(3)(A), which covers tuition, fees, academic tutoring, special needs services for a special needs beneficiary, books, supplies and other equipment incurred in connection with enrollment or attendance at a public, private or religious school; room and board, uniforms, transportation and supplementary items required or provided by the school; and computer technology, equipment or internet access used by the student and the family during the school years, with software for sports, games or hobbies carved out unless it is predominantly educational.

The scholarship is not taxable to you. New §139K excludes it from gross income, for amounts received after December 31, 2026.

The organizations are fenced in. An SGO must be a 501(c)(3) that is not a private foundation, must keep qualified contributions in one or more separate accounts, must serve ten or more students who do not all attend the same school, must spend at least 90 percent of its income on scholarships for eligible students, must verify household income and family size, must give priority first to students it funded the previous school year and then to their siblings, and must not earmark contributions for any particular student. That last requirement disposes of the question families ask first: a contribution cannot be steered to a particular child, including your own.

Your state's part is two filings, not one

The advance election is only half of it. Revenue Procedure 2026-6, issued December 12, 2025 alongside IR-2025-121, lets a state declare itself in before it names any organizations, so SGOs have time to organize. Section 4.01 of that procedure leaves no side door: "No alternative method of making an Advance Election, and no alteration of Form 15714, will be accepted for calendar year 2027."

The second filing is the one that matters at your kitchen table. Under §25F(g), a participating state provides the Secretary a list of the scholarship granting organizations located in the state, with a certification that whoever submits it — the governor, or the individual, agency or entity designated under state law — has the authority to do so. That list is due not later than January 1 of each calendar year, and for this first year "as early as practicable." Until that list exists, no organization in that state can take a contribution that earns the credit. Section 3.02 of the revenue procedure states the failure mode without softening it: if a state that made an advance election does not submit its list by the deadline, "no organization in that State would qualify as an SGO under § 25F for calendar year 2027." No list, no contributions, no pot of money, no applications.

Thirty states had made the advance election when I read the IRS Federal Scholarship Tax Credit page on August 22, 2026. The page stamps its own currency date, and that day it read "as of July 24, 2026," last reviewed July 27. Archived captures of the same page show the list filling in a state at a time: twenty-seven as of April 15, twenty-eight as of June 22 when North Carolina appeared, twenty-nine as of July 6 with Kansas, thirty as of July 24 with Kentucky. It moves, and it is the only version worth citing.

If your state is not on it, the geography bites harder than people expect. A qualified contribution is one the organization uses to fund scholarships for eligible students solely within the state in which the organization is listed. Once Texas names its organizations, a relative living there will be able to donate to one of them and claim the credit. That does nothing for a child living in a state that never filed the form.

That gap is where the word "approved" does its damage. A state's advance election is a one-page form declaring an intention; it names no organization, and Part V exists precisely to certify that none is attached. A school newsletter or co-op announcement saying your state has been approved for the federal credit can therefore be entirely accurate and still tell you nothing about where to apply. On August 22, 2026 no state SGO list had been published, because the IRS had not yet said how a state submits one — so anything soliciting income documents for a federal scholarship application on that date was collecting them ahead of any list an organization could be on. Approval of a state's election and the existence of an organization that can take your application are two separate events, months apart, and on that date the second had not happened anywhere.

What was still unwritten on August 22, 2026

Treasury has put out exactly one document describing what the regulations will say: Preview of Forthcoming Section 25F Guidance, remarks delivered June 9, 2026 by Deputy Assistant Secretary for Tax Policy Kevin Salinger. It puts proposed regulations "no later than the end of September," says states, SGOs and taxpayers will be able to rely on them for tax year 2027, and carries a line worth holding on to while reading the rest: these items "remain subject to ongoing legal review." A preview is not a rule. Read it as a strong signal and nothing more.

What the preview says is coming, and what it leaves open:

• Homeschools. The proposed rules are expected to define school consistently with §530 and, in the department's own words, a home school "would be treated as a school if it is treated as a school under State law." That hands the question back to your state's classification — the same hinge that decides whether a 529 withdrawal works for a homeschooling family, and unresolved there too.
• Income verification. SGOs are expected to be allowed to verify household income through paystubs, tax returns, IRS transcripts, Forms W-2, or crediting agencies and commercial data sources; through categorical eligibility, meaning recent documentation that a household member participates in a needs-based federal, state or tribal program with income limits at or below the threshold; and foster children would satisfy the income requirement without separate verification.
• Double-dipping. Participating states would be expected to prevent duplicate awards to the same student for the same expense, possibly through a formal scholarship acceptance certifying that no other award has been received for that expense. If you already hold an ESA or a voucher, plan on being asked to attest expense by expense.
• The expense scope itself. Further §530 guidance on eligible expenses, including additive academic tutoring and special needs services, was described as a separate workstream that follows the §25F proposed regulations. Later, in other words.
• Donor mechanics. Each SGO would issue a written acknowledgment carrying a unique donor number generated under an IRS-provided method, report to the IRS using that number, and the taxpayer would report it on the federal return — a matching system built so that donors never hand an SGO a Social Security number. An IRS portal for SGO administration is contemplated, in phases rather than all at once.

Three things I could not resolve from published material at all. The deadline and procedure for perfecting an advance election by submitting the SGO list is still, in the agency's own word, "future guidance" — Notice 2025-70 (2025-50 I.R.B. 773, December 8, 2025) asked for comments on how states should submit those lists and the certifications that go with them, and no rule answering it had been published. Whether $1,700 is per return or per spouse on a joint return is not addressed anywhere I found; the statute says the credit "to any taxpayer" shall not exceed that amount, and I would put the question to a preparer rather than assume. And which published area median gross income figure applies, with what family-size adjustment, is not spelled out for §25F — the §42 figures live in HUD's Multifamily Tax Subsidy Projects income limits, whose 2026 tables took effect May 1, 2026.

Four things worth doing before January

None of these need a regulation to exist first.

1. Bookmark the IRS participating-states page and open it once a month. It is the only list that decides whether any of this reaches your state, and it gained three states between April and July.
2. Pull your 2026 household income figure now. The test looks at the calendar year before the application date, so a spring 2027 application is a 2026 income question. The documents likely to satisfy an SGO are ones you already have: the 2026 return, W-2s, an IRS transcript, recent paystubs. Families coming from a state program will recognize the exercise from what an ESA application asks for and when it closes.
3. Find your area's median gross income in the HUD tables and multiply by three, as a rough read on whether 300 percent is even a live constraint for your household. In most metropolitan areas it is a high ceiling. Treat the arithmetic as orientation and not as qualification until the regulations say which figure governs.
4. If ESA or voucher money is already paying your bills, start an expense-by-expense ledger. Whatever form the duplicate-award rule takes, it will ask which award paid which invoice, and reconstructing that in April 2027 out of a card statement is not something you want to attempt.

Two dates on the calendar, not one

End of September 2026: proposed regulations, which states, SGOs and taxpayers are expected to be able to rely on for tax year 2027. January 1, 2027: the date the credit switches on. The SGO list sits between them on a date nobody has published — §25F sets January 1 in the general case, but for this first year the statute says only "as early as practicable," and the operative deadline is one of the things future guidance is meant to supply.

Between those two dates is when applications actually appear, from organizations nobody can name yet. Write both dates down. When the second one passes, go looking for your state's list before you go looking for a form — the list is what makes the form real. And if your state's SGO list lands and something on this page has aged badly, send me the wording and the date it carries; the page gets corrected and re-dated when one arrives.