Frequently Asked Questions
Get the Answers You Need About the Federal Scholarship Tax Credit Program The Federal Scholarship Tax Credit Program can seem complex at first; but it’s actually designed to make education simpler and more accessible for everyone. Below you’ll find answers to the most common questions from families, donors, and Scholarship Granting Organizations (SGOs).
General FAQs
No. This is a federal program that states can choose to participate in each year. Participation is determined by the Governor or a designated state official.
The program takes effect for contributions made on or after January 1, 2027.
No. The program is entirely federally funded and does not use state education dollars.
No. EdChoice Kentucky is not a Scholarship Granting Organization. We’re an information and education resource helping families, donors, and schools understand how to participate.
You can subscribe to our newsletter to receive occasional updates about approved SGOs, program participation, and new resources in Kentucky.
Family & Student FAQs
Students in grades K–12 who are eligible to attend a public or private school in Kentucky may apply through an approved Scholarship Granting Organization (SGO).
To qualify, your household income must be at or below 300% of the HUD area’s median income for the previous year. Click here to determine if you're eligible.
Scholarships can cover a wide range of K–12 education expenses, including:
- Tuition and school fees
- Books and classroom supplies
- Technology (computers, tablets, internet access)
- Tutoring and special-needs services
- Uniforms and transportation
Yes. The program applies to all K–12 students (public and private) who meet the eligibility and income criteria.
Visit our SGO Directory to find approved SGOs that serve your area. Each SGO may have its own application process and priorities.
Yes, as long as each scholarship follows program guidelines. However, total financial aid may be limited by other organizations’ rules (for example, KHSAA eligibility for athletes).
The program begins January 1, 2027, once Kentucky elects to participate and SGOs are approved. Scholarship applications will open soon after donations are received.
Donor FAQs
Only individual taxpayers can receive a tax credit for contributions under this program. However, corporations can also make donations and are eligible to take a contribution deduction, though they do not receive a tax credit.
There is no limit on how much you can contribute. However, only up to $1,700 per year qualifies for a 100% federal income tax credit. Contributions exceeding $1,700 can be deducted as a charitable contribution, but they will not receive the tax credit.
A tax credit directly reduces the amount of federal income tax you owe; dollar for dollar. A deduction only reduces your taxable income. This program provides a credit, meaning your contribution is fully offset.
You can direct your contribution to any qualified SGO, even one outside your state. You may also choose to restrict your donation to a particular school. You may not restrict your donation to an individual student.
Contributions made to receive the tax credit up to the $1,700 limit cannot also be deducted as a charitable contribution. However, any portion of your contributions that exceeds the $1,700 tax credit limit can be deducted as a charitable contribution.
You may carry forward excess contributions for up to five years.
Only SGOs approved annually by the state and listed with the U.S. Department of the Treasury may receive contributions under this program. You can find approved organizations on our SGO Directory.
SGO & School FAQs
To qualify, an organization must:
- Be a 501(c)(3) nonprofit
- Operate in the same state as the students it serves
- Spend at least 90% of contributions on scholarships
- Provide scholarships to at least 10 students (not all from the same school)
- Verify each applicant’s income
Yes, as long as the SGO maintains separate accounting and funds for scholarship activity and complies with all federal requirements.
SGOs must be approved annually by the state and included on the federal Treasury’s list of eligible organizations.
SGOs must file standard nonprofit reports, such as IRS Form 990, and maintain transparent accounting for scholarship funds. They should also be prepared to verify recipient eligibility and demonstrate compliance upon review.
SGOs can take advantage of the program by:
- Building partnerships with local schools
- Hosting informational sessions for donors and parents
- Highlighting transparency and success stories
- Coordinating messaging with EdChoice Kentucky and community leaders
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