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

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

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 North Dakota's list, or any covered state's list. You designate the gift as a qualified contribution. 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 North Dakota public school.

North Dakota's opt-in status

North Dakota is opted in and appears on the IRS advance-election list updated September 14, 2026. Governor Kelly Armstrong announced the decision on January 26, 2026. "This program incentivizes charitable giving to support our state's most precious resource – its students," he said.

The announcement stood out for its public school framing. State Superintendent Levi Bachmeier said "thousands of students attending public and private schools will benefit." The governor's office listed tutoring, special needs supports, technology and "supplemental services for public education" among the covered uses.

North Dakota hasn't published its SGO list. The governor's office said it would do so once more federal guidance was out, and Treasury's proposed rules arrived October 2, 2026. The 2027 list is due by February 15, 2027.

What it means for North Dakota donors

North Dakota has no state scholarship tax credit, so nothing comes off your gift before the federal cap.

Worked example. A Bismarck farmer has a good year and owes $15,000 in federal tax for 2027. He and his wife each give $1,700 to a North Dakota SGO and claim $3,400. He also gives $5,000 more to the same SGO. That extra $5,000 doesn't earn more credit, but it may be deductible if they itemize.

What it means for North Dakota families

North Dakota families have no ESA, voucher or tax-credit scholarship. Governor Armstrong vetoed HB 1540, an income-based ESA, in April 2025, and the House then rejected a universal ESA bill. Our North Dakota scholarships guide covers what families can use now.

That makes SGO scholarships the first broad source of outside help for many North Dakota families. They can pay for tuition, academic tutoring, special needs services, books, supplies and computer technology, as each SGO decides. Students in small rural districts, for example, could use them for academic tutoring. Treasury's guidance on homeschool costs is still coming.

North Dakota timeline

• January 1, 2027: credit-eligible giving begins.
• February 15, 2027: North Dakota's 2027 SGO list due to the IRS.
• January 31, 2028: SGO acknowledgements for 2027 gifts.
• Spring 2028: claim on your 2027 return.

How to give and claim

1. Watch for North Dakota's SGO list, then confirm your SGO is on the IRS SGO list when you give. North Dakota organizations will appear in our SGO directory as they join.
2. Give cash on or after January 1, 2027, and designate it for North Dakota. 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 North Dakota'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.