The §25F credit
How it works
The credit itself
Give $1,700. Your federal tax falls by $1,700.
Congress passed it in 2025. Give cash to an approved scholarship organization and you may take that amount off your federal tax bill, up to $1,700 a year, for gifts made on or after January 1, 2027. Three facts about it are worth knowing before anything else.
It is a credit, not a deduction
A deduction lowers the income you are taxed on, so what it saves depends on your bracket. A credit comes off the tax itself.
Owe at least $1,700, give $1,700, and your bill is $1,700 lower.
It is nonrefundable
It can take what you owe down to zero, and there it stops. Give more than your federal bill for the year and the excess does not come back as a refund.
You may carry it forward for up to 5 years.
It has three names
The newspapers call it the Education Freedom Tax Credit. The IRS calls it the Federal Scholarship Tax Credit. Tax practitioners say §25F. All three mean this one credit.
Giving through this site
Four steps. Your money never passes through our hands.
Step 01
Pick an organization
Browse by state, mission, school type or affiliation. Your own state does not limit you: §25F asks where the organization sits, not where you file, so every one of the 30 participating states is open to you.
Step 02
Choose an amount
We show what you have already given this year and what is left under the ceiling. If you want to give past it, you can. We will tell you plainly that the extra may not qualify, and then leave you to it.
Step 03
Pay the organization directly
Stripe takes your card and settles the payment into that organization’s own account. Your statement shows their name. At no point does the money sit in a Nostos balance, which is the whole reason the payments are built this way.
Step 04
Keep the paperwork
A receipt is written the moment you give and kept in your account. It carries the organization’s legal name and EIN, the amount, the date and the tax year. When the IRS settles the final acknowledgment format we reissue it, and the older version stays on file.
The conditions
Five things have to be true before a gift counts
- The organization is on a participating state's list
- 30 states have opted in for 2027. Each of them owes the IRS a list of its organizations before January 1, 2027, and none has filed one yet.
- It spends most of what it takes in on scholarships
- At least 90% of its income has to go back out as scholarships, to ten or more students who do not all attend the same school.
- Your gift was money
- Stock, property and volunteer hours sit outside this credit, whatever they are worth.
- You are not claiming it twice
- One contribution cannot be both a credit here and a charitable deduction on your return. If your state credits the gift as well, that reduces the federal credit.
- You gave inside the window
- Anything between January 1, 2027 and December 31, 2027 counts for the 2027 tax year.
Three questions the IRS has not answered
Treasury has not published the final regulations, so a handful of details are genuinely open. We would rather show you where the gaps are than guess and be wrong. These three come up while you are using the site.
Your donor number
The IRS is expected to issue one. It has not said what the number will look like, so your receipts say pending where it will go.
Reporting to the IRS
Nobody knows the format or the channel yet. Nothing on this site sends anything to a government system, because nothing here is built to.
Per person, or per return
Commentary leans toward per return, which would mean a couple filing jointly shares one $1,700 rather than getting two. If you file jointly, ask your tax professional before you both give.
The states
Only 30 states have opted in so far.
Each state decides for itself, and an organization can only produce a qualifying gift if its state has opted in. That is a fact about the organization, not about you: you can live and file anywhere and give to any organization in a participating state.
Frequently Asked
A Scholarship Granting Organization: a nonprofit that awards scholarships for eligible K-12 education expenses.
To qualify under §25F it must meet federal requirements, among them spending at least 90% of its income on scholarships and awarding them to at least ten students who do not all attend the same school.