Montana Student Scholarship Organization Tax Credit: How Donors Get Preapproved

Montana's two education credits

Montana has two matching credits for "qualified education contributions." Both are run by the Department of Revenue:

• The Student Scholarship Organization (SSO) tax credit is for gifts to approved SSOs. These nonprofits fund scholarships for students at private education providers. This page focuses on it.
• The Innovative Educational Program tax credit is for gifts to Montana public school districts for innovative programs.

Each credit equals the amount you give, up to $200,000 per taxpayer per credit, and you can claim both in one year. Each credit is nonrefundable and carries forward up to three years. You can't also deduct the credited amount as a charitable gift, but anything you give above the credit may be deductible.

Who can claim it

Individuals, estates and trusts, corporations, partnerships and LLCs can all claim it.

• Married couples filing jointly may claim up to $400,000 per credit, according to the department's guide.
• Partnerships, S corporations and LLCs are capped at $200,000 per credit. The credit passes to owners by ownership share, and each owner's share counts toward their personal $200,000 limit.
• Estates and trusts can pass unused credit to beneficiaries.

Amounts and caps

Each credit has its own statewide pool. For tax year 2026, the SSO pool is $7,200,000. Whenever at least 80% of a year's pool is claimed, the next year's pool rises by 20%. Otherwise it stays the same.

The pool is tracked live on the Education Donation Portal. On October 13, 2026, the portal showed the full $7,200,000 SSO pool claimed, with $0 available and $0 pending. The Innovative Educational Program pool showed the same. Because 2026 was fully claimed, the 2027 SSO pool should rise 20% under the department's formula, to about $8.64 million. Confirm the official figure when the portal opens.

If less than $200,000 remains in the pool, your maximum creditable gift shrinks to whatever is left.

Preapproval and deadlines

Montana credits must be preapproved, and timing is everything.

1. You give directly to an SSO.
2. The SSO reports your gift on the portal.
3. If credit remains and you're under your limit, you're preapproved automatically.

Your place in line is set by when the SSO reports your gift, not when you gave. The department's own example: a gift made January 10 but reported March 1 loses to a gift made February 15 and reported February 16, if the pool fills on February 20.

Key dates:

• Portal opening: the third Wednesday of January at 10:00 a.m. MST. In 2026 that was January 21.
• Re-released credits: credits that become invalid, for example because a gift was returned or recorded wrong, go back into the pool at 9:00 a.m. on the first Wednesday of October.
• Your receipt: once preapproved, you get a receipt with a confirmation number. You'll need both when you file.

Stacking with the federal $1,700 credit

Governor Gianforte opted Montana in to the federal scholarship tax credit, and Montana is on the IRS list of states with 2027 advance elections. From January 1, 2027, individuals who give cash to an SGO on Montana's federal list can claim up to $1,700 each, or $3,400 for a married couple who each give. The federal scholarship tax credit guide has the full rules.

Under Treasury's proposed rules, any state credit you claim on a qualified federal gift is subtracted before the $1,700 cap. Montana's credit is 100% of the gift, so a single gift claimed for both would earn little or nothing federally. Keep them apart:

The federal credit has no statewide pool, so it doesn't sell out like Montana's. It goes only to individuals giving in their own name. Partnership and S corporation gifts don't count, even though they can earn the Montana credit. Montana must file its federal SGO list by February 15, 2027. Follow the states opted-in tracker.

How to give, step by step

1. Before January: pick an SSO from the portal's list. As of October 2026 it includes groups such as ACE Scholarships SSO Montana (ACE Scholarships), Montana Leadership Foundation and several school foundations.
2. On opening day: give, and ask the SSO to report your gift right away. Many donors arrange this in advance so they're in line at 10:00 a.m.
3. Keep the receipt and confirmation number, and claim the credit on Form 2's Nonrefundable Credits Schedule. Businesses use Form PTE Schedule II, Form FID-3 or Form CIT Schedule C.
4. Make a separate federal gift. Give cash to a listed SGO, designate it as a qualified contribution, and keep the donor number it sends by January 31. See how to claim the federal scholarship tax credit.

Business owners comparing states can read business tax credit scholarships. Families can read Montana scholarships for families.

Choosing an SSO

SSOs must spend at least 90% of credit-eligible donation revenue on scholarships. Scholarships go to Montana students ages 6 to 19 attending qualified private providers, not home schools. Several SSOs on the list are tied to a single school or school system, so ask where your gift can be used. Also ask how fast the SSO reports gifts on opening day.

Our checklist for choosing a scholarship fund covers the rest. When you're ready, pledge on Edulist. You give directly to the organization; Edulist never takes donations.

This page is general information as of October 2026, not tax advice. The federal rules are proposed, not final. Ask your tax professional.