The mega tax and spending bill that President Trump recently signed includes an inaugural federal tax credit for donations to private school scholarship funds serving low-income children.
The provision in the One Big Beautiful Bill Act will let individuals deduct up to $1,700 per year in donations to state-approved nonprofits from their income tax returns starting in 2027.
Qualifying students can use the scholarships to pay tuition and related expenses at the K-12 campuses of their choice.
Twenty-one states, including Pennsylvania, Florida and Arizona, allow similar deductions on state tax returns.
“This legislation promises generational change,” said Norton Rainey, CEO of ACE Scholarships, a Colorado nonprofit distributing private school scholarships to needy families in 12 states. “It will provide thousands of American children, especially those from underserved communities, access to a better future.”
Peter Murphy, a senior adviser to the Invest in Education Coalition, an advocacy group that lobbied for