Treasury and IRS Propose Regulations for Federal School Choice Tax Credit

The U.S. Treasury and IRS have issued proposed regulations for the new Federal Scholarship Tax Credit, also known as the Education Freedom Tax Credit. This program, launching January 1, 2027, will offer federal tax credits up to $3,400 for contributions to Scholarship Granting Organizations (SGOs), which fund K-12 scholarships. The regulations aim to expand educational choice, with an estimated 96% of children in participating states eligible for funds.