In 2027, a new groundbreaking policy called the Federal Education Freedom Tax Credit is set to launch, bringing major expansion of school vouchers across the country. This major change to our educational policy could mean a big change for students who use alternative forms of education, including some homeschoolers
The Treasury Secretary has just released updated details about how the federal education tax credit will work come 2027. Even so, many questions remain unanswered. The Treasury Department has said that full guidance for the program will be released by the end of September.
What is the Federal Scholarship Tax Credit Program?
The Federal Scholarship Tax Credit Program was established through the Educational Choice for Children Act (ECCA), a provision included in the “One Big Beautiful Bill” package passed by Congress in 2025. This first-of-its-kind tax credit scholarship program will support private school choice at the federal level by funding private school tuition, tutoring, and other educational expenses.
Starting on January 1st, 2027, individuals will be able to receive a tax credit of up to $1700 for donations that go to nonprofit organizations that distribute various types of scholarships to students attending various schools. Organizations called “scholarship-granting organizations” (SGOs) will determine eligibility and distribute these funds. A state must choose to participate in the program and provide a list of SGOs in that state to the IRS before an individual taxpayer can donate to an SGO within that state and claim the Federal Tax Credit.
This is how the tax credit works: individuals make donations (up to $1700), which are then distributed to students through scholarship-granting nonprofits. The end result is the government has a decrease in money (less tax revenue) and more students are enrolled in schools of their choice.
Why Should Homeschool Families Care?
In its official statement, the Treasury stated homeschool families will qualify for the scholarship if homeschooling is recognized as a school under state law, which means that homeschoolers from North Carolina will be eligible to receive funds. Microschools who are categorized as private schools in their states will also qualify, with more details to come in September.
If a microschool is classified as a private school under state law, or is established as a private school, its students may also be eligible to receive funding through the program. Scholarships awarded by Scholarship Granting Organizations (SGOs) supported by tax-deductible donations can be used to cover a wide range of K–12 educational expenses that families may incur. While the full list of eligible expenses has not yet been released, qualifying costs are expected to include items such as academic tutoring services and tuition assistance.
This means in 2027 many homeschoolers and microschoolers may be eligible for a huge influx of funding: Homeschool parents and microschool, hybrid school, and coop leaders all need to be paying attention as more details emerge in September.
I have often appreciated the content here. This post feels repetitive and ai-generated without much application to homeschooling families, despite headers that indicate otherwise. I understand the need to build content and links, but this post was a disappointment for sure.
Hi Angie! We do not use AI for our blogs, we write them in google docs and copy it in to WordPress. It’s been updated, apologies for that error!