To amend the Internal Revenue Code of 1986 to allow a credit against tax for charitable donations to nonprofit organizations providing education scholarships to qualified elementary and secondary students.
Summary
What This Bill Does
The bill amends Internal Revenue Code to create Section 25F providing a tax credit for individual charitable contributions to scholarship granting organizations for K-12 education, creates new Section 25F establishing the tax credit structure: credit equals full donation amount, capped at 10% AGI or $5,000, with $5B annual volume cap (2025-2028), first-come-first-served allocation, and 5%, and requires new Section 4969 imposing excise tax consequences on scholarship granting organizations that fail to distribute 100% of receipts (less 10% admin and 15% carryover) within 3 years. It relies on exemptions, tax credits, appropriations, and compliance mandates. The main policy areas are Education.
Who Benefits and How
Scholarship granting organizations could gain revenue opportunities, Scholarship recipients could see lower costs, and Private and religious schools could face lower compliance burdens.
Who Bears the Burden and How
Federal tax revenue could lose revenue opportunities, Scholarship granting organizations would take on compliance duties, and Public school systems could lose revenue opportunities.
Key Provisions
- Amends Internal Revenue Code to create Section 25F providing a tax credit for individual charitable contributions to scholarship granting organizations for K-12 education.
- Creates new Section 25F establishing the tax credit structure: credit equals full donation amount, capped at 10% AGI or $5,000, with $5B annual volume cap (2025-2028), first-come-first-served allocation, and 5%...
- Requires new Section 4969 imposing excise tax consequences on scholarship granting organizations that fail to distribute 100% of receipts (less 10% admin and 15% carryover) within 3 years.
- Exempts excludes scholarship amounts provided through SGOs for K-12 education from the gross income of recipient families.
- Exempts new Section 139J excluding scholarship amounts for qualified K-12 education expenses from gross income of dependents.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
The bill amends Internal Revenue Code to create Section 25F providing a tax credit for individual charitable contributions to scholarship granting organizations for K-12 education, creates new Section 25F establishing the tax credit structure: credit equals full donation amount, capped at 10% AGI or $5,000, with $5B annual volume cap (2025-2028), first-come-first-served allocation, and 5%, and requires new Section 4969 imposing excise tax consequences on scholarship granting organizations that fail to distribute 100% of receipts (less 10% admin and 15% carryover) within 3 years.
Key Policy Areas
Education
Primary Purpose
The bill amends Internal Revenue Code to create Section 25F providing a tax credit for individual charitable contributions to scholarship granting organizations for K-12 education, creates new Section 25F establishing the tax credit structure: credit equals full donation amount, capped at 10% AGI or $5,000, with $5B annual volume cap (2025-2028), first-come-first-served allocation, and 5%, and requires new Section 4969 imposing excise tax consequences on scholarship granting organizations that fail to distribute 100% of receipts (less 10% admin and 15% carryover) within 3 years.
Policy Domains
Education Scholarship Tax Credit
Identified Gains
- Scholarship granting organizations
- Scholarship recipients
- Private and religious schools
- Private and religious K-12 schools
- Individual taxpayers donating to education SGOs
Identified Costs
- Federal tax revenue
- Scholarship granting organizations
- Public school systems
Sponsors
Legislative Progress
IntroducedMr. Smith of Nebraska (for himself, Mr. Owens, Mr. Walberg, …
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Families receiving education scholarships, Low-to-moderate income families, Private and religious K-12 schools
Scholarship granting organizations faces effects in multiple directions
Positive-direction: Families receiving education scholarships, Low-to-moderate income families, Private and religious K-12 schools, Private and religious schools, Scholarship recipients
Negative-direction: Public school systems
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "the_secretary"
- → Secretary of the Treasury
- "scholarship_granting_organization"
- → 501(c)(3) nonprofit providing scholarships for K-12 education
Key Definitions
Terms defined in this bill
Individual in household with income not greater than 300% of area median gross income, eligible to enroll in a public elementary or secondary school
Charitable contribution in cash or marketable securities to an SGO
Tuition, curriculum, books, online materials, tutoring, testing fees, dual enrollment, educational therapies at public/private/religious schools including homeschools
501(c)(3) non-private-foundation that substantially provides scholarships for qualified K-12 education expenses
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology