Federal Scholarship Tax Credit 2027: Florida and Homeschooling

A federal scholarship tax credit applies to taxable years ending after 31 December 2026, and the IRS describes 1 January 2027 as the launch of the credit. Florida is on the IRS list of states that have made an advance election to participate for 2027. This post summarizes what has been published about the program so far and what has not yet been decided, particularly for Florida families who educate at home.

What the program is

The credit was added to the Internal Revenue Code as section 25F by section 70411 of Public Law 119-21, enacted on 4 July 2025. The IRS says it is "commonly known as the Education Freedom Tax Credit." An earlier bill, the Educational Choice for Children Act (H.R. 817 in the 119th Congress), proposed a similar federal tax credit for donations to scholarship granting organizations.

An individual who is a U.S. citizen or resident and makes a cash donation to a qualifying scholarship granting organization (SGO) can receive a nonrefundable federal tax credit equal to the donation, up to $1,700 per year, reduced by any state tax credit allowed for the same contribution. Credits that exceed the taxpayer's tax liability can be carried forward for up to five years.

Under the proposed rules, spouses filing a joint return are treated as separate taxpayers, so a married couple can claim up to $3,400 if each spouse contributes up to $1,700.

SGOs use the donations to fund scholarships for K-12 students. Eligible expenses are those described in section 530(b)(3)(A) of the tax code. That section covers tuition, fees, academic tutoring, special needs services, books, supplies and equipment incurred in connection with enrollment or attendance at a public, private or religious school. It also covers transportation and other items required or provided by such a school, and computer technology, equipment and internet access.

Under the law, a student is eligible if they are eligible to enroll in a public elementary or secondary school and their household's income for the prior calendar year is not greater than 300% of the area median gross income. The proposed rules would measure this in a way that includes adjustments for family size.

Which states are participating

Each state decides whether to opt in each year. The IRS list, dated 14 September 2026, shows these 30 states as having made an advance election to participate for 2027:

Alabama, Alaska, Arkansas, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, North Dakota, North Carolina, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia and Wyoming.

Under the proposed rules, for 2027 a state must submit an advance election by 1 January 2027 and its list of SGOs by 15 February 2027.

In Florida

Step Up For Students, a nonprofit scholarship-funding organization that administers Florida scholarship programs including PEP, has announced the Step Up, Step Further Scholarship Fund. Its page describes the fund as being "made possible through the Federal Scholarship Tax Credit" and says donations "will be used to fund scholarships for K–12 students in both public and private schools." It also states that "Families will be able to use these funds in addition to other Step Up For Students Scholarships." The page says donations will be accepted beginning 1 January 2027.

Step Up has not yet published application dates, award amounts or income rules for the fund.

How homeschool students are treated

The proposed federal rules do not address homeschooling. The only reference is a survey statistic in the regulatory analysis. The law defines a "school" as one that provides K-12 education "as determined under State law," and the proposed rules adopt that definition. Under the law, every category of eligible expense is tied to a student's enrollment or attendance at a school. The proposed rules state that a student does not need to be enrolled in a school to be an eligible student. Treasury and the IRS have said they intend to issue further guidance under section 530 on what counts as a school and as a qualified expense.

Florida law places students educated at home in different legal categories:

• Home education program students, registered with their school district through a notice of intent under s. 1002.41, Florida Statutes.
• PEP students, who are registered in a personalized education program with an eligible nonprofit scholarship-funding organization under s. 1002.395 (defined in s. 1002.01(2)). A student may not take part in PEP while participating in a home education program.
• Students enrolled in a private school, including the private schools often called umbrella schools.

As of this writing, neither the proposed federal rules nor Step Up's published materials state how each of these categories will be treated in Florida.

Timeline

• 1-2 October 2026: Treasury and the IRS released proposed rules (published in the Federal Register on 2 October).
• 1 December 2026: deadline for public comments on the proposed rules, and for requests to speak at the hearing.
• 15 December 2026: scheduled public hearing on the proposed rules (cancelled if no outlines of topics are received by 1 December).
• 1 January 2027: the credit launches for contributions made on or after this date to SGOs on a participating state's list. Under the proposed rules, this is also the deadline for states to submit an advance election for 2027.
• 15 February 2027: under the proposed rules, the deadline for states to submit their 2027 lists of SGOs.

The IRS estimates that by 2030 the program could support 600 to 700 SGOs, with more than 11 million taxpayers making nearly $26 billion in qualified contributions a year.

Requirements for scholarship organizations

Under the law, an SGO must be a 501(c)(3) tax-exempt organization that is not a private foundation, must keep qualified contributions in separate accounts, and must appear on its state's SGO list. It must provide scholarships to at least 10 students who do not all attend the same school, may not earmark donations for specific students, and must spend at least 90% of its income on scholarships for eligible students. The proposed rules would also require an annual financial and programmatic audit by a qualified independent third party, with smaller organizations allowed to use a committee of independent persons.

Frequently asked questions

Is there a federal tax credit for homeschooling?

The federal scholarship tax credit goes to taxpayers who donate to scholarship granting organizations, not directly to families. Families may receive scholarships from those organizations starting in 2027. Under the law, a student's eligibility depends on household income and on being eligible to enroll in a public school. Whether a scholarship can pay a home-educated student's expenses depends on the federal definition of qualified expenses, which is tied to a "school" as determined under State law. Neither the proposed federal rules nor Step Up For Students has said how this applies to Florida home education or PEP students.

Is Florida participating in the federal scholarship tax credit?

Florida is on the IRS list (as of 14 September 2026) of states that have made an advance election to participate for 2027.

When does the federal scholarship tax credit start?

The IRS describes 1 January 2027 as the launch date. Contributions made on or after that date to SGOs on a participating state's list can qualify for the credit.

How much is the federal scholarship tax credit?

Up to $1,700 per taxpayer per year. Under the proposed rules, a married couple filing jointly can claim up to $3,400 if each spouse contributes up to $1,700.

Who is eligible for a scholarship?

Under the law, a student who is eligible to enroll in a public elementary or secondary school and whose household income for the prior calendar year is not greater than 300% of the area median gross income. The proposed rules would measure this in a way that includes adjustments for family size.

Where to follow updates

• Step Up For Students: Federal Scholarship Tax Credit page.
• IRS: Federal Scholarship Tax Credit page, including the list of participating states.
• Federal Register: the proposed rules.
• Statute: 26 U.S.C. 25F and 26 U.S.C. 530.

Last checked: 4 October 2026.