Scholarship tax credit calculator: estimate your 2027 federal and state credits

How the scholarship tax credit calculator works

The calculator follows the order of operations in Treasury's proposed rules for the federal scholarship tax credit (Section 25F, often called the Education Freedom Tax Credit):

1. Start with your qualified contributions. These are cash gifts you designate as qualified, made on or after January 1, 2027, to an SGO on the IRS list for a state that opted in.
2. Subtract any state tax credits you claim for those same qualified contributions.
3. Apply the cap. Your federal credit is the smaller of the result or $1,700 ($3,400 for a married couple when each spouse gives).
4. Limit it to your tax. The credit can't create a refund. Anything you can't use carries forward for up to five years.

Your net cost is your gift minus the federal credit and any state credit on the same gift. For a single donor who gives $1,700 and claims no state credit, the net cost is $0: the full gift comes back as a lower federal tax bill.

Worked examples

These match the examples in our federal credit guide. They're illustrations, not advice.

The Ohio and Indiana rows show why the order matters. Because the state credit comes off before the $1,700 cap, a donor in a state with its own credit can give more and collect both. Treasury explicitly rejected the reading that would apply the cap first.

When a state credit wipes out the federal credit

Some states credit 100% of a gift, including Alabama, Arkansas, Missouri and Montana. If you claim one of those on the same dollars you designate as qualified, the state credit subtracts the whole gift, and the federal credit drops to zero.

There are two ways around it, both covered in our state donor guides:

• Make two gifts. Give $1,700 per spouse, designated as qualified, with no state credit claimed. Give separately for the state credit.
• Designate only part of a larger gift. Under the proposed rules, a state credit is applied first to the part you didn't designate. Turn on "Designate only the federal maximum" in the calculator to see the effect. In Kansas, for example, a $6,800 gift with $1,700 designated can earn $5,100 from the 75% state credit and the full $1,700 federal credit.

Utah is different: its law bars the state credit for a gift you also claim federally, so plan separate gifts.

Which states count

The federal credit only applies to gifts to SGOs listed by a state that opted in. As of October 13, 2026, 30 states were on the IRS advance-election list and New York had announced it is opting in. Minnesota, Oregon and Wisconsin declined. See our states opted in tracker for every state.

You don't have to live in an opted-in state. A donor anywhere can give to a listed SGO in a covered state. The gift then funds students in that state.

Before you give

• Give cash (check, card, bank transfer) in your own name. Gifts through a partnership or S corporation don't count for the federal credit under the proposed rules.
• Tell the SGO the gift is a qualified contribution when you give, and keep the written acknowledgement with your donor number.
• Claim the credit on Form 8525 with your 2027 return. Our guide on how to claim the federal scholarship tax credit walks through it.
• Gifts above the credited amount may be deductible if you itemize. See tax credit vs. deduction.

When you're ready, pledge to an SGO. Edulist never handles donations: you give directly to the SGO, and we help you find one and record your pledge. SGOs that want to receive these gifts can register on Edulist. This calculator is not tax advice, and the rules are proposed, not final.