US Departments of Education and Treasury Announce Education Freedom Tax Credit
The US Departments of Education and Treasury have released comprehensive details of a new Education Freedom Tax Credit during National School Choice Week. This significant initiative has been introduced under President Donald Trump’s Working Families Tax Cuts Act and is being positioned by the administration as a major federal step to expand school choice across the country.
What is the Education Freedom Tax Credit?
According to the official announcement, the Education Freedom Tax Credit is designed to help families access a wider range of K-12 education options by lowering the cost of schooling, tutoring, and other education-related services. The administration says the initiative will give parents greater flexibility to choose learning options that best suit their children’s needs.
The Education Freedom Tax Credit allows taxpayers to claim a federal income tax credit of up to $1,700 for donations made to approved Scholarship Granting Organizations (SGOs). The credit is applied against federal income taxes that would otherwise be paid to the government.
These SGOs then use the donated funds to provide scholarships to students. The scholarships are intended to help children attend a school of choice or access other approved education services. The administration has described the programme as the largest national expansion of education freedom in US history.
Key Benefits and Covered Expenses
Education Secretary Linda McMahon emphasized that the tax credit would help families afford key education services such as tutoring and scholarships. She added that the programme recognises that students learn in different ways and aims to provide families with more options, regardless of income level.
Scholarships funded through the Education Freedom Tax Credit can be used for a wide range of qualified K-12 education expenses. These include:
- Tuition fees for private schools
- Tutoring services at public schools
- Education-related support for students with disabilities
The programme covers expenses connected to public, private, and charter schools. According to the Education Department, this broad coverage is intended to allow families to customise their child’s education based on individual learning needs rather than being limited to a single schooling model.
States Participating in the Programme
As of the announcement, 23 US states have opted into the Education Freedom Tax Credit. These states include:
- Alabama
- Alaska
- Arkansas
- Georgia
- Idaho
- Indiana
- Iowa
- Louisiana
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- North Dakota
- Ohio
- Oklahoma
- South Carolina
- South Dakota
- Tennessee
- Texas
- Virginia
- West Virginia
- Wyoming
The Treasury Department has encouraged other states to opt into the programme. Treasury Secretary Scott Bessent said the policy places decision-making power in the hands of parents rather than federal agencies. He also noted that the tax credit is intended to increase access to education programmes for millions of families across the country.
Next Steps and Implementation
The administration has stated it will continue to work with states and governors to expand participation in the programme. Families in participating states may begin accessing scholarships through eligible Scholarship Granting Organizations, subject to state-level implementation.
The full details of the Education Freedom Tax Credit, including eligibility rules and operational guidelines, are available in the joint fact sheet released by the US Departments of Education and Treasury.
