Education Freedom Tax Credit in Mississippi: How Donors Give and Families Qualify

What is the Education Freedom Tax Credit and how can you qualify in Mississippi?

The Education Freedom Tax Credit is the federal scholarship tax credit in Section 25F of the tax code. You give cash to a scholarship granting organization (SGO), and your federal income tax drops by the same amount, up to $1,700 a year. Gifts count starting January 1, 2027.

Donors qualify if they are U.S. citizens or residents who owe federal income tax and give cash to an SGO on Mississippi's list, or any covered state's list. You designate the gift as a qualified contribution. There's no donor income limit, and you can live anywhere.

Families qualify for the scholarships if household income is at or below 300% of area median gross income and the child is eligible to enroll in a Mississippi public school.

Mississippi's opt-in status

Mississippi is opted in and is on the IRS advance-election list updated September 14, 2026. Governor Tate Reeves announced the decision on January 19, 2026, saying "parents – not government – know what's best for their children's education."

In Mississippi, the Governor's office will choose which SGOs take part. No list has been published as of October 2026. Under Treasury's proposed rules, the 2027 list is due by February 15, 2027.

What it means for Mississippi donors

Mississippi has a state income tax but no tax-credit scholarship for K-12 scholarships. So a Mississippi donor's gift, up to $1,700, usually becomes a full federal credit with nothing subtracted first. Only a state credit claimed on the same gift would reduce it. If you plan to claim any other Mississippi credit on a gift to an SGO, check with your tax professional first.

Worked example. A Jackson business owner wants to support local scholarships. A gift from his S corporation wouldn't earn the federal credit under the proposed rules, because only individuals giving directly qualify. So he and his wife each give $1,700 personally to a Mississippi SGO and claim $3,400 together on their 2027 joint return.

What it means for Mississippi families

Mississippi's state programs are narrow. The Equal Opportunity for Students with Special Needs ESA serves students with an IEP, and separate scholarships help students with dyslexia or speech-language impairments attend approved schools. Our Mississippi scholarships guide explains both.

Federal-credit scholarships could reach many more families, because the income limit is 300% of area median gross income and there's no disability requirement. They can pay for tuition, academic tutoring, special needs services, books, supplies and computer technology, as each SGO decides. Public school students can qualify too. Treasury's guidance on homeschool costs is still coming.

Mississippi timeline

• January 1, 2027: credit-eligible giving begins.
• February 15, 2027: Mississippi's 2027 SGO list due to the IRS.
• 2027 session: state leaders expect another school choice debate.
• January 31, 2028: SGO acknowledgements for 2027 gifts.
• Spring 2028: claim on your 2027 return.

How to give and claim

1. Pick an SGO on Mississippi's list once it's out. ACE Scholarships lists Mississippi among the states it serves. Confirm the SGO is on the IRS SGO list when you give.
2. Give cash on or after January 1, 2027, and designate it for Mississippi. Spouses each give separately.
3. Keep the acknowledgement with your donor number.
4. File Form 8525. Our guide on how to claim the federal scholarship tax credit covers each step, and our checklist helps you donate to a scholarship fund.

Edulist doesn't take donations. You give directly to the SGO. You can pledge on Edulist and we'll email you when Mississippi's list is published. This page reflects Treasury's proposed rules as of October 13, 2026. It is not tax advice; ask your tax professional.