‘The Education Freedom Tax Credit has created an unprecedented opportunity to open the doors of education freedom for families nationwide.’
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The American Federation for Children (AFC) is promoting the reality that hundreds of millions of Americans are eligible for tax credits for donations to scholarship funds.
The AFC published a report this month that shows an estimated 121.5 million taxpayers can claim federal tax credits through the Education Freedom Tax Credit (EFTC) beginning in 2027. The credits are provided to anyone giving donations to scholarship granting organizations (SGOs).
The EFTC is a new program that goes into effect next year and provides up to $1,700 in tax credits for contributions to those SGOs. Those tax credits would have been owed to the IRS in federal income taxes had that money not gone to the SGOs under the new program.
The AFC report was drafted by the organization’s Growth Fund Senior Fellow Patrick Graff and estimates 52 million students will be eligible under the EFTC across the country. The analysis published this month doesn’t project how much funding will be available. But it does foresee scholarship potential.
Tommy Schultz, CEO of the AFC, said the report details the growing possibilities of students getting scholarship help.
“The Education Freedom Tax Credit has created an unprecedented opportunity to open the doors of education freedom for families nationwide,” Schultz said.
“Dr. Graff’s research demonstrates the life-changing difference taxpayers can make for American students by donating to a scholarship granting organization while reducing their own federal tax liability. We look forward to helping expand school choice nationally and bringing the EFTC to as many families as possible through the AFC Scholarship Fund.”
Graff said there’ll be a lot of money in play if taxpayers take advantage of the new program.
“This research demonstrates the enormous potential of the Education Freedom Tax Credit. If participation scales to just 10% of eligible taxpayers over time, the EFTC could generate nearly $19 billion annually in new funding for K-12 education,” Graff said.
“That represents a significant new opportunity to expand scholarships for students and bring greater educational freedom to public and private school families across the country, including in states where school choice options remain limited.”
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