Proposed US federal tax credit would fund private and home education

The Trump administration has proposed rules for a federal scholarship programme that would allow eligible families to seek financial support for private school, homeschooling and other education expenses. The Federal Scholarship Tax Credit is scheduled to launch on January 1. Under the proposal, taxpayers who donate to scholarship organisations would receive a federal tax credit.

Individuals could donate up to $1,700 and receive a credit for the same amount, while couples filing jointly could contribute twice that sum. Scholarship organisations in participating states would decide awards based on available funds and student need. Children from elementary through high school could qualify if their families earned up to three times the area’s median income.

The proposed uses include tuition at private or religious schools, homeschooling costs, tutoring, special-education therapies, books, computers and other expenses linked to enrolment or attendance. Public-school students could also use the money for additional learning expenses. Officials said the rules would make it easier for low-income families to apply.

Applicants could use proof of participation in a government assistance programme instead of income documents, while foster children would not need income verification. The programme will depend on state participation. The supplied list names 30 states that were in for 2027, including Florida, Texas, Ohio, Virginia and Wyoming.

Governors in Arizona, Minnesota, Wisconsin and Oregon have said their states will not participate, while more than two dozen states had not decided. Supporters say the scheme could provide additional help for tutoring and therapies. Critics argue similar programmes can divert resources from public schools and contribute to enrolment pressures.

Treasury and IRS projections cited by the Associated Press say the programme could eventually direct nearly $26 billion annually into as many as 2.2 million scholarships. The public has 60 days to comment on the proposed rules.