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 creates new IRC Section 25F creating individual tax credit for contributions to scholarship granting organizations for K-12 private education, creates IRC Section 25F statutory text for individual education scholarship tax credit with definitions of eligible students, qualified contributions, scholarship granting organizations, and qualified expenses, and creates new IRC Section 45BB creating corporate education scholarship tax credit for contributions to scholarship granting organizations, capped at 5% of taxable income. It relies on tax credits, exemptions, definition changes, and compliance mandates. The main policy areas are Education.
Who Benefits and How
Scholarship granting organizations could gain revenue opportunities, Families receiving education scholarships could see lower costs, and Private and religious K-12 schools could face fewer barriers.
Who Bears the Burden and How
Federal Treasury could face higher costs, Scholarship granting organizations would take on compliance duties, and Federal, state, and local government education agencies could face higher barriers.
Key Provisions
- Creates new IRC Section 25F creating individual tax credit for contributions to scholarship granting organizations for K-12 private education.
- Creates IRC Section 25F statutory text for individual education scholarship tax credit with definitions of eligible students, qualified contributions, scholarship granting organizations, and qualified expenses.
- Creates new IRC Section 45BB creating corporate education scholarship tax credit for contributions to scholarship granting organizations, capped at 5% of taxable income.
- Requires new IRC Section 4969 imposing penalty on scholarship granting organizations that fail to distribute 100% of receipts within 3 years (minus up to 10% for administrative expenses).
- Establishes a $10 billion annual volume cap on education scholarship tax credits, allocated among states based on student population (20%) and poverty rates (80%), with Treasury Department administration.
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 creates new IRC Section 25F creating individual tax credit for contributions to scholarship granting organizations for K-12 private education, creates IRC Section 25F statutory text for individual education scholarship tax credit with definitions of eligible students, qualified contributions, scholarship granting organizations, and qualified expenses, and creates new IRC Section 45BB creating corporate education scholarship tax credit for contributions to scholarship granting organizations, capped at 5% of taxable income.
Key Policy Areas
Education
Primary Purpose
The bill creates new IRC Section 25F creating individual tax credit for contributions to scholarship granting organizations for K-12 private education, creates IRC Section 25F statutory text for individual education scholarship tax credit with definitions of eligible students, qualified contributions, scholarship granting organizations, and qualified expenses, and creates new IRC Section 45BB creating corporate education scholarship tax credit for contributions to scholarship granting organizations, capped at 5% of taxable income.
Policy Domains
Section 2 - Tax Credit for Contributions to Scholarship Granting Organizations
Identified Gains
- Scholarship granting organizations
- Families receiving education scholarships
- Private and religious K-12 schools
- Individual taxpayers making charitable contributions
- Corporations making charitable contributions
Identified Costs
- Federal Treasury
- Scholarship granting organizations
- Federal, state, and local government education agencies
- Public school systems
Sponsors
Legislative Progress
IntroducedMr. Cruz introduced the following bill; which was read twice …
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Private and religious K-12 schools, Private and religious elementary and secondary schools, Public school systems
Scholarship granting organizations faces effects in multiple directions
Positive-direction: Private and religious K-12 schools, Private and religious elementary and secondary schools, Scholarship granting organizations (501(c)(3) nonprofits)
Negative-direction: Public school systems
Individual taxpayers, Individual taxpayers making charitable contributions
Federal Treasury, Federal, state, and local government education agencies
States with high poverty student populations
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "the_secretary"
- → Secretary of the Treasury
- "the_secretary"
- → Secretary of the Treasury
Key Definitions
Terms defined in this bill
An individual eligible to enroll in a public elementary or secondary school
A charitable contribution to a scholarship granting organization in cash or marketable securities
Expenses including tuition, curricula, books, instructional materials, online materials, tutoring, testing, special needs services, transportation, uniforms, and other approved expenses
A 501(c)(3) nonprofit that provides scholarships for qualified education expenses and allocates at least 90% of receipts to scholarships
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