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.
Analysis under review: This bill has generated analysis that may be too generic or incomplete. Clause-level evidence remains available below.
Summary
The Educational Choice for Children Act of 2025 would create a new federal tax credit program to help fund private school scholarships for lower-income K-12 students. Here is how it works: Individuals could get a tax credit (up to 10% of their income or $5,000, whichever is greater) for donating to approved nonprofit scholarship organizations. Corporations could get a similar credit worth up to 5% of their taxable income. The total program is capped at $10 billion per year nationwide, allocated on a first-come, first-served basis. The scholarships can cover tuition, textbooks, tutoring, testing fees, and educational therapies at public, private, or religious schools. To qualify, students must come from households earning no more than 300% of area median income and be eligible to enroll in public school. The scholarship organizations must be tax-exempt nonprofits that undergo annual audits, cannot earmark funds for specific students, and must distribute at least 85% of their receipts within three years. The bill also explicitly protects participating schools and scholarship organizations from government control over their operations, curricula, or religious character.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers.
At a Glance
What This Bill Does
Creates federal tax credits for individuals and corporations who contribute to scholarship granting organizations (SGOs) that fund private and religious K-12 education for low- and middle-income students, with a $10 billion annual volume cap and automatic growth mechanism.
Key Policy Areas
Education, Tax
Primary Purpose
Creates federal tax credits for individuals and corporations who contribute to scholarship granting organizations (SGOs) that fund private and religious K-12 education for low- and middle-income students, with a $10 billion annual volume cap and automatic growth mechanism.
Policy Domains
Educational Choice for Children Act
Identified Gains
Contextual inference, no direct clause citation- Private and religious K-12 schools
- Scholarship granting organizations
- Families earning up to 300% AMI seeking private school options
- High-income individual donors (10% AGI credit)
- Corporations (5% taxable income credit)
Contextual inference, no direct clause citation
Identified Costs
Contextual inference, no direct clause citation- Federal tax revenue (up to $10B+ annually)
- Public school systems (potential enrollment loss)
- IRS (volume cap tracking and SGO oversight)
Contextual inference, no direct clause citation
Sponsors
Legislative Progress
IntroducedMr. Cassidy (for himself, Mr. Scott of South Carolina, Mr. …
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Federal tax revenue, IRS / Department of the Treasury
Private and religious K-12 schools, Public school systems
Positive-direction: Private and religious K-12 schools
Negative-direction: Public school systems
Eligible scholarship recipients, Families receiving K-12 scholarships, Low- and middle-income families (up to 300% AMI)
Scholarship granting organizations
Scholarship granting organizations faces effects in multiple directions
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "the_secretary"
- → Secretary of the Treasury (IRS)
- "scholarship_granting_organization"
- → 501(c)(3) nonprofit providing K-12 scholarships to eligible students
Key Definitions
Terms defined in this bill
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