This past summer, the US government passed the One, Big, Beautiful Bill, introducing a new federal tax credit for education. This legislation introduces a new realm of potential for K-12 students across the nation.
While this is a federal tax credit that offers potential opportunity for Arizona students, each state must opt in.
Currently, we are aware of the following:
- The federal tax credit should take effect at the beginning of the tax year 2027.
- The federal credit is a dollar-for-dollar tax credit with a maximum donation eligible for credit at $1,700 per year, per taxpayer.
- Families must have an income below 300% of their area’s median income as determined by the Federal Housing Authority to qualify for scholarship assistance.
It is important to note that the U.S. Department of Treasury is planning a detailed draft by summer 2026.
As information becomes accessible, we will continue to update how this potential opportunity could help make quality education even more affordable for families.
Catholic Education Arizona is an IRS 501(c)(3) nonprofit charitable organization and has never accepted gifts designated for individuals. Per state law, a school tuition organization cannot award, restrict, or reserve scholarships solely on the basis of donor recommendation. A taxpayer may not claim a tax credit if the taxpayer agrees to swap donations with another taxpayer to benefit either taxpayer’s own dependent.
