Utah Carson Smith Opportunity Scholarship Tax Credit and the Federal $1,700 Credit

How Utah's Carson Smith scholarship tax credit works

Utah funds the Carson Smith Opportunity Scholarship Program (Utah Code 53E-7-402) partly through tax-credited donations. Parents of eligible students with disabilities apply to a scholarship granting organization (SGO) that has an agreement with the Utah State Board of Education. The SGO awards scholarships for tuition and other approved expenses. A full-year K–12 award can be up to 2.5 times the value of the weighted pupil unit.

Donors who give to the program get a nonrefundable Utah tax credit equal to 100% of the amount on their tax credit certificate. Individuals claim it under Utah Code 59-10-1041 and corporations under 59-7-625. The individual credit section was amended in the 2026 General Session, effective January 1, 2026.

The program has spending rules for SGOs. At least 92% of revenue must go to scholarships, up to 5% to administration and up to 3% to marketing and fundraising. Donors may designate a qualifying school or provider to receive their gift for scholarships.

Who can claim it

• Individuals, estates and trusts with Utah income tax liability.
• Corporations under the corporate franchise and income tax credit in 59-7-625.

The cap, certificates and timing

Before taking your donation, the SGO must tell you three things: that the donation may not qualify for a credit, how the certificate process works and the total certificates it has issued so far that year. SGOs issue certificates in the order donations arrive. If your gift would push the year over the cap, your certificate covers only the amount below the cap.

The credit is claimed for the taxable year of the donation. One exception: a gift made by April 15 can be credited to the prior tax year. You must certify in writing that you won't claim a federal deduction or credit for that donation. Keep your certificate for as long as Utah requires you to keep tax records.

We couldn't find the current year's cap amount published online as of October 2026. Ask the SGO before you give.

How the Utah credit stacks with the federal $1,700 credit

Utah opted in to the federal scholarship tax credit and is on the IRS list of 2027 advance elections. From January 1, 2027, Utah taxpayers can claim up to $1,700 per person in federal credit for gifts to SGOs on the IRS SGO list.

Utah's statute draws a firm line. Under 59-10-1041(3), you may not claim the Utah credit for a donation to the extent you claim that donation as a deduction or credit on your federal return. Treasury's proposed rules would independently reduce the federal credit by any state credit on the same qualified contributions. Either way, the same dollars can't earn both.

The answer is two separate gifts:

A married couple can make a federal gift of $1,700 from each spouse ($3,400 federal), plus Carson Smith donations sized to their Utah tax.

Keep in mind:

• Don't deduct the Carson Smith gift on your federal Schedule A if you take the Utah credit for it.
• Under the proposed rules, gifts from partnerships or S corporations don't count toward an owner's federal credit. Corporate gifts can still earn Utah's corporate credit.
• Whether a Carson Smith SGO also appears on Utah's 2027 federal SGO list is up to the state's submission, due February 15, 2027.

How to give in Utah, step by step

1. Pledge on Edulist so we can remind you when federal giving opens on January 1, 2027.
2. Federal gift: choose an SGO on the IRS SGO list, give up to $1,700 per spouse on or after January 1, 2027, designate it as a qualified contribution and don't request a Utah certificate for it.
3. Utah gift: contact a Carson Smith program SGO, ask about the year's certificate total, give and receive your tax credit certificate within 30 days.
4. Keep records: the Utah certificate, and the federal acknowledgement with your unique donor number (due by January 31).
5. File. Claim the Utah credit on your Utah return. File Form 8525 federally. See how to claim the federal scholarship tax credit.

Choosing a Utah SGO

Carson Smith program SGOs operate under agreements with the Utah State Board of Education and must follow its spending, carry-forward and reporting rules. Ask any SGO whether it's in the Carson Smith program, whether it expects to be on Utah's federal list for 2027, and how quickly scholarships reach families. Our checklist for choosing a scholarship fund covers the rest. Families should also look at Utah scholarships, including the state-funded Utah Fits All program. Businesses can compare state programs in business tax credit scholarships.

For the federal rules, see the federal scholarship tax credit explained and the states opted in tracker.

Edulist doesn't take donations. You give directly to the SGO. This page reflects Utah law and Treasury's proposed federal rules as of October 13, 2026. It is not tax advice. Ask your tax professional.