The Education Freedom Tax Credit (EFTC), also called the Federal Scholarship Tax Credit, is a new federal tax benefit that begins in tax year 2027. It lets individual taxpayers support scholarships for K-12 students by donating to a qualifying Scholarship Granting Organization, and then claim a dollar-for-dollar federal tax credit of up to $1,700 per year. A credit reduces the tax you owe directly, so a $1,000 donation can reduce your federal tax bill by $1,000 (up to the annual limit).

How it works for donors
1. Choose a qualifying SGO. An SGO is a public charity that awards scholarships to eligible K-12 students and must meet federal requirements, including awarding at least 90% of what it receives as scholarships.
2. Give. Individual taxpayers can donate to a qualifying SGO. 
3. Claim the credit. Claim up to $1,700 per year, dollar for dollar, on your federal return starting with tax year 2027.
4. Timing. Taxpayers can begin committing to the 2027 credit in October 2026. 

What it means for Kentucky families of children with disabilities
For families raising a child with a disability, the right support can make all the difference, and the system can feel overwhelming. Scholarship dollars can open doors to the services and learning options that fit a child best. Through Special Education Lifeline, eligible families can apply for a scholarship to help with any educational expenses. Families can apply by sending us an email requesting an application. 

About Special Education Lifeline
Special Education Lifeline Inc. is a Kentucky-based nonprofit dedicated to helping families of children with disabilities navigate the public school special education system with confidence. We provide hands-on advocacy support, including attending IEP meetings alongside families, answering questions about the special education process, and offering trainings for families and school districts. Founded by Angela Pannuti, a former educator, practicing physician assistant, and parent of a child with a disability, our work is rooted in real-world expertise and genuine compassion. Our mission is to ensure equitable access to quality special education resources by empowering families, strengthening collaboration between households and schools, and helping individuals with disabilities advocate for themselves. 

Frequently asked questions
Who can claim the credit?

       Individual taxpayers who donate to a qualifying SGO. Details may be refined as federal guidance is finalized.

 

How much can I claim?     

     Up to $1,700 per year, dollar for dollar, against your federal tax.

When does it start?

     The credit begins with tax year 2027, and taxpayers can begin committing to it in October 2026.

What is an SGO?

     A Scholarship Granting Organization is a qualifying public charity that awards scholarships to eligible K-12 students and meets federal requirements, including a 90% threshold for scholarships.

How do I give through Special Education Lifeline?

     Clink on the EFTC Donate button. 

How can my child receive a scholarship? Send us an email for an application. 

This is general information, not tax or legal advice. Treasury and IRS guidance is still being finalized, so details may change. Please consult your tax professional about how the credit applies to your situation. Sources: IRS newsroom, U.S. Department of Education EFTC fact sheet, EdChoice, U.S. Treasury.