It might be time to consider classifying your microschool as a private school, if you are interested in accessing the benefits of one of the most transformative federally funded educational choice policies in decades: the New Federal Scholarship Tax Credit.
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. We have been monitoring the new Federal Education Freedom Tax Credit closely: learn more about how the bill works and how it might impact individual homeschoolers.
Recently, the Department of Treasury released a statement to update industry leaders on how the tax credit will be implemented starting in 2027. In this statement, Kevin Salinger, the deputy assistant secretary for tax policy noted that “a homeschool would be treated as a school if it is treated as a school under state law.” This statement has lead to major questions for microschools eligibility. Where does this leave microschools? The most likely answer to this eligibility question is that each state will determine if microschools will be eligible for the Federal Education Freedom Tax Credit Scholarship funding and they will do so by the way they classify microschools. So, this means that microschools will be eligible if they are legally recognized as a school in their state, but most states don’t qualify them as schools.
As many founders know, state regulations haven’t caught up to microschools, putting them in a precarious position. Microschools are notoriously hard to define as they are categorized very differently across states. Currently, most states don’t acknowledge microschooling as an official way to register a school, leaving them in a legal gray zone.
There’s a few different paths of legally establishing a microschool: some choose the legal visibility and “legitimacy” that filing as a private school provides, while others turn towards building their microschool closer to how a co-operative might be organized to avoid the stringent oversight and regulatory hurdles that private school categorization might bring. Many founders who are just starting out choose not to file as a private school and this means that the microschool leaders who may most need this money might lose out on the opportunity to use it. If you are seriously considering taking advantage of this new funding, you may need to be prepared to adjust your filing status. Learn more about the microschool legal landscape aquí.
On the other hand, there is a lot of clarifying information that has yet to be provided by the Treasury, so founders shouldn’t despair yet. Some microschool founders believe Salinger’s statement was a misinterpretation of the statute, and more details will become available in September. Until then, microschool leaders shouldn’t need to rush to take any legal action, but it might be a good idea to take time now to begin reviewing how your state categorizes microschools.
We are watching this closely and will continue to provide simple, clear information on national homeschool news and policy changes. We update our blog weekly every Monday, so be sure to check back regularly for the latest homeschooling news.