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

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

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. It starts with gifts made on 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 Nebraska's list, or any covered state's list. You designate the gift as a qualified contribution when you give. There's no donor income limit.

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 Nebraska public school.

Nebraska's opt-in status

Nebraska is opted in and appears on the IRS advance-election list updated September 14, 2026. Governor Jim Pillen signed the executive order at St. Teresa Catholic School in Lincoln, announced September 29, 2025. That made Nebraska one of the earliest states to commit.

Pillen said his administration would work with school choice advocates to assemble Nebraska's list of qualified SGOs for the Treasury. No state agency was named, and no list has been published as of October 2026. Under Treasury's proposed rules, the 2027 list is due by February 15, 2027.

A short history: why Nebraska donors start from zero

Nebraska has tried scholarship programs twice in three years:

So today Nebraska has no state scholarship tax credit. For donors, that keeps the federal math simple: your full gift up to $1,700 becomes a credit, with nothing subtracted first.

Worked example. An Omaha couple filing jointly owes $11,000 in federal tax. In February 2027, each spouse gives $1,700 to a Nebraska SGO and designates it as a qualified contribution. They claim $3,400 on Form 8525, and their tax drops to $7,600.

What it means for Nebraska families

Nebraska families have no voucher, ESA or state tax-credit scholarship today. Private help comes from groups like the Children's Scholarship Fund of Omaha. Our Nebraska scholarships guide lists current options. Opportunity Scholarships of Nebraska, which ran the 2023 program, has said it hopes to award federally backed scholarships in fall 2027.

Federal-credit scholarships can cover tuition, academic tutoring, special needs services, books, supplies and computer technology. Public school students can qualify, not just private school students. Pillen's announcement noted SGOs may keep up to 10% for administration, since the law requires at least 90% of income to go to scholarships. Each SGO decides what it funds, and Treasury's guidance on homeschool costs is still coming.

Nebraska timeline

• January 1, 2027: credit-eligible giving begins.
• February 15, 2027: Nebraska's 2027 SGO list due to the IRS.
• Fall 2027: first federally backed awards expected by some Nebraska SGOs.
• January 31, 2028: SGO acknowledgements for 2027 gifts.
• Spring 2028: claim on your 2027 return.

How to give and claim

1. Watch for Nebraska's SGO list, then confirm your SGO is on the IRS SGO list when you give. Nebraska organizations will appear in our SGO directory as they join.
2. Give cash on or after January 1, 2027, and designate it for Nebraska. Spouses each give separately.
3. Keep the acknowledgement with your donor number.
4. File Form 8525. See how to claim the federal scholarship tax credit, and use our checklist to 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 Nebraska'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.