Louisiana Tuition Donation Credit: How to Give to an STO and Stack the Federal Credit

The Louisiana Tuition Donation Credit in brief

Louisiana pays you back, through your state income tax, for money a School Tuition Organization (STO) turns into scholarships. STOs are 501(c)(3) nonprofits. They give low-income students scholarships to attend approved private schools, or a public laboratory school run by a college.

The rules come from Louisiana Revised Statute 47:6301 and state board Bulletin 134. Under them:

• The credit equals the scholarship dollars. You get a credit for the part of your gift the STO uses for scholarships. STOs may keep no more than 5% for administrative or promotional costs, and that part earns no credit.
• It is nonrefundable. It can lower your Louisiana tax to zero but not below. Unused credit carries forward for up to three years.
• No preapproval. The credit is earned when you give, so there is no application window to race.
• No state cap in the statute. Unlike Montana, Kansas or New Hampshire, the law sets no statewide dollar limit and no per-donor limit.

In the 2024-25 school year, about 3,790 students attended a private school with a scholarship from this program, according to the Department of Education's annual report (March 2026).

Who can claim it

Any donor who has to file a Louisiana income tax return for the year of the gift can claim it.

• Individuals claim it on Form IT-540, or IT-540B for nonresidents and part-year residents.
• Owners of sole proprietorships, LLCs, partnerships and S corporations claim a business gift on their own individual return.
• C corporations claim it on Form CIFT-620.

STOs accept gifts from anyone. If your whole gift goes to the STO's operating costs, you may still get a charitable deduction, but you won't get the credit.

What scholarships fund and who gets them

To get a scholarship, a student must live in Louisiana and come from a household with income at or below 250% of the federal poverty guidelines. The student must also be entering kindergarten, have been in a Louisiana public school on the October 1 and February 1 counts, or have had a state scholarship the year before.

Scholarships can't exceed the school's tuition and mandatory fees. They are also capped at 80% of the state average per-pupil funding for grades K–8, or 90% for grades 9–12. Families pay any difference. STOs award scholarships first come, first served, with returning students first.

Stacking with the federal $1,700 credit

Governor Landry committed Louisiana to the federal scholarship tax credit, and Louisiana appears on the IRS list of states with 2027 advance elections. From January 1, 2027, an individual who gives to an SGO on Louisiana's federal list can claim up to $1,700 against federal income tax. A married couple can claim up to $3,400, if each spouse gives in their own name. The federal scholarship tax credit guide covers the details.

Under Treasury's proposed rules, the state credit is the catch. Any state credit you claim on a qualified federal gift is subtracted first, before the $1,700 cap applies. Louisiana's credit can equal almost the whole gift, so claiming both on one gift would leave almost nothing federal. Treasury also proposes an ordering rule: when only part of a gift is designated as qualified, the state credit counts against the undesignated part first. That rule helps with partial state credits. It does little for Louisiana's, which can cover nearly the whole gift.

The clean approach is two separate gifts:

Ask how the STO will handle your gift. Some organizations may run both an STO program and a federal SGO account, which must stay separate under the federal rules. Louisiana must submit its federal SGO list by February 15, 2027, so the listed organizations aren't known yet. Check the states opted-in tracker for updates.

How to give, step by step

1. Pick an STO. As of October 2026, the Department of Education lists four: ACE Scholarships Louisiana, Arete Scholars Louisiana, Aspiring Scholars Louisiana and Son of a Saint Louisiana. See ACE Scholarships, Arete Scholars and Son of a Saint.
2. Set any designations. Agree on any group of schools, time frame or disability designation in writing before you give.
3. Give and share your tax ID. The STO reports your name, tax ID, amount and date to the Department of Education.
4. Get your receipt. The Department verifies the scholarship amount and sends a receipt through the STO, usually within about two weeks of the STO's report.
5. Claim it. Attach the receipt to your Louisiana return. You need it by the return's due date.
6. Plan the federal gift. From 2027, make a separate gift to a listed SGO, designate it as qualified, and keep the donor number it sends by January 31. Our guide on how to claim the federal scholarship tax credit walks through Form 8525.

For businesses weighing several states, see business tax credit scholarships. Families can read Louisiana scholarships for families.

Choosing an STO or SGO

Ask each organization:

• What share of gifts it spends on administration (the legal limit is 5%).
• Which schools it partners with.
• How many students it is turning away.
• Whether it plans to be on Louisiana's federal SGO list for 2027.

Our checklist for choosing a scholarship fund has more questions. When you're ready, you can pledge on Edulist. You give directly to the organization; Edulist never handles donations.

This page is general information as of October 2026, not tax advice. The federal rules are proposed, not final. Ask your tax professional how both credits apply to you.