A New Federal Tax Credit Could Help Pay for Your Child's School Scholarship

What this new credit is about

The IRS has published proposed rules for a new Federal Scholarship Tax Credit. It is a tax credit for people and groups that donate money to certain nonprofits called scholarship granting organizations.

These organizations use the donations to fund scholarships for elementary and secondary (K-12) school education. In plain terms, the credit is meant to encourage donations that pay for student scholarships.

This is a proposed rule, which means it is not final yet. The government is still taking public comments before the rules are set.

Who this affects

According to the IRS, the proposed rules affect three main groups. First, taxpayers who make qualified contributions to these scholarship organizations. Second, states that choose to take part by certifying which organizations qualify. Third, the organizations themselves once a state has certified them.

If you are a parent hoping your child could get a scholarship, the scholarships come from these certified organizations, not from the IRS directly. The details on how families apply will depend on the organizations and the states that participate.

The credit described in the rule is nonrefundable. That means it can lower the tax a donor owes, but the IRS describes it as a credit against taxes rather than a cash refund.

The timeline you should know

The proposed rule was published in the Federal Register on October 2, 2026. The public comment period ends on December 1, 2026.

The IRS is also holding a public hearing on Tuesday, December 15, 2026, at 10 a.m. Eastern Time. Anyone can read the rule and submit a comment for free through Regulations.gov.

Because this is still a proposal, the exact amounts and application steps for families are not final. We will only share figures once they appear in official IRS guidance.

How to stay informed for free

You do not need to pay anyone to follow this rule or to comment on it. The official Federal Register and Regulations.gov pages are free to use.

Watch for your own state to decide whether it will take part. Scholarships will flow through state-certified organizations, so your state's education department is a good place to check later.

OpenFinancial is not a government agency. We point you to the official, free sources so you can act with confidence.

Frequently asked questions

Can I get a scholarship for my child right now?

Not yet. This is a proposed rule, not a final program. Scholarships would come from state-certified organizations once the rules are final and your state chooses to take part.

Does it cost money to read or comment on the rule?

No. The Federal Register and Regulations.gov are free to use. You never have to pay anyone to read a federal rule or submit a comment.

Is the tax credit the same as a cash payment to families?

No. The IRS describes it as a nonrefundable credit for donors who give to scholarship organizations. Families would benefit through scholarships from those organizations, not a direct check from the IRS.

When will the final rules take effect?

The IRS has not set a final date. The comment period ends December 1, 2026, with a hearing on December 15, 2026. Final rules come later.