Bloomberg: IRS Seeks Comments on New Tax Credit for Education Scholarships:
The IRS is seeking comments on a new tax benefit for donors who give to non-profits that expand access to private schools.
Scholarship granting organizations typically provide scholarships for low-to-middle income K-12 students to attend private schools. Donors who give cash to these groups will be eligible to claim up to $1,700 to lower their tax bill starting 2027, according to the GOP’s tax-and-spending law signed in July.
The IRS in Notice 2025-70 seeks comments on a range of issues including on the state mandated annual certification of SGOs, reporting requirements, and single-state organizations. The notice comes ahead of the agency’s plans to released proposed regulations. Comments are due Dec. 26.
- The SGOs are required to be state approved, federally recognized non-profits.
- States will be required to provide a list to the IRS of SGOs that satisfy certain requirements in order for the donations to qualify for the credit.
- To be eligible for the scholarship program, the household income must not exceed 300% of the median gross income where they live.
