How it works
Four steps, and a short list of things nobody can finish yet.
The credit itself
Congress passed it in 2025. Give cash to an approved scholarship organization and take that amount off your federal tax bill, up to $1,700 a year, for gifts made on or after January 1, 2027.
Most coverage calls it the Education Freedom Tax Credit. The IRS calls it the Federal Scholarship Tax Credit. Practitioners say §25F. Three names, one thing.
It is a credit and not a deduction, which is the part worth understanding. A deduction lowers the income you get taxed on. A credit comes off the tax. Give $1,700, owe at least $1,700, and your bill falls by $1,700.
It is also nonrefundable. It takes what you owe down to zero and stops. Give more than your federal bill for the year and the excess does not arrive as a refund, though you can carry it forward for up to 5 years.
Giving through this site
- 1
Pick an organization
Browse by state, mission, school type, or affiliation. Your own state does not restrict you: §25F asks where the organization sits, not where you file. All 30 participating states are open to you. Start browsing.
- 2
Choose an amount
We show what you have already given this year and what is left against the ceiling. If you want to give past it, you can. We will say plainly that the extra may not qualify, and then get out of your way.
- 3
Pay the organization directly
Stripe takes the card and settles it into that organization’s own account. Your statement shows their name. Nothing lands in an SGO Direct balance at any point, which is the whole reason the payments are built this way.
- 4
Keep the paperwork
A receipt is generated straight away and lives 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 and the older version stays on file.
What has to be true for a gift to count
- The organization is on a participating state's list
- 30 states have opted in for 2027. Each one owes the IRS a list of its organizations before January 1, 2027. None has filed yet.
- It spends most of its money on scholarships
- At least 90% of income, and it has to serve ten or more students who are not all at the same school.
- You gave cash
- Not stock, not property, not volunteer hours.
- You are not double-dipping
- You cannot take this credit and also deduct the same gift as charity. A state credit on the same gift reduces the federal one.
- You gave in the right window
- Between January 1, 2027 and December 31, 2027.
What nobody can build yet
Treasury has not published the final regulations. Rather than guess at them and quietly get something wrong, we left the gaps open and labelled them. Three of them show up while you use the site:
- Your donor number. The IRS is expected to issue one so that organizations never have to ask for your Social Security number. It has not said how. Your receipts say pending where that number will go.
- Reporting to the IRS. Nobody knows the format or the channel. Nothing here can transmit to a government endpoint, because there is no code in this application that does that.
- Whether the ceiling is per person or per return. Commentary leans toward per return, meaning a couple filing jointly shares one $1,700 rather than getting two. It is not settled. If you file jointly, talk to your tax professional before you both give.
SGO Direct is an independent technology platform and is not affiliated with the IRS, U.S. Treasury, or any state government.
Tax treatment depends on applicable law and individual circumstances. Consult a qualified tax professional.