Tax Credits for Donations Funding K-12 Private School Scholarships.
This law establishes new federal tax credits for individuals and corporations who donate to scholarship granting organizations (SGOs). The goal is to fund tuition for elementary and secondary education for students from low-income households (below 250% of the federal poverty line). This provides a financial incentive for donors while expanding school choice options for eligible families.
Key points
Individuals can claim a tax credit up to $4,500 for contributions made to organizations providing K-12 education scholarships.
Scholarships are strictly limited to students from low-income families, increasing their access to private or alternative schooling options.
Scholarship organizations must distribute at least 90% of their receipts as scholarships within a year to avoid a 15% excise tax penalty.
The law mandates annual evaluations to assess the effectiveness of these scholarships on student academic achievement and success.
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