How much federal scholarship tax credit can I claim in 2027?
Estimate the new 2027 federal credit for qualified cash gifts to an IRS-listed scholarship granting organization. The limit is $1,700 per donor, not per child. Subtract state credits attributable to qualified contributions, calculate spouses separately, and apply the remaining federal income-tax liability limit. Unused credit can carry forward for five years.
2027 scholarship donation credit
2027 scholarship tax credit calculator
Quick answer
The new federal scholarship credit is capped at $1,700 per donor after state-credit reductions and is limited by remaining income-tax liability. Separate spouse calculations can produce up to $3,400 on a joint return.
Also answers
- federal scholarship donation credit
- Section 25F credit calculator
- SGO tax credit 2027
- scholarship credit carryforward
Good fit when
- Planning 2027 cash gifts to a listed SGO
- Separating joint-return donor amounts
- Checking nonrefundable limits and potential carryforward
Have ready
- Qualified cash gifts by donor
- State credits attributable to each donor's qualified gift
- Remaining federal income-tax liability after other personal credits
- Confirmation that every counted donor and SGO qualifies
Result you get
Per-donor available credit, combined current-year credit, and potential five-year carryforward. No previous-year carryforward is included because 2027 is the first program year.
How this calculation works
- Calculate each donor's qualified cash contributions after subtracting state tax credits attributable to those qualified contributions. Apply the $1,700 cap only after that subtraction.
- For a joint return, calculate each spouse separately and combine the available credits. A $3,400 household maximum requires sufficient qualifying contributions attributable to both eligible spouses; one spouse's $3,400 gift does not automatically qualify for two donor caps.
- Limit the combined credit to federal income-tax liability remaining after other applicable personal credits. This tool does not treat withholding, estimated payments, or a projected refund as the tax-liability ceiling.
- Show the current-year credit and the unused amount potentially carried to the following five tax years. The calculator covers first-year 2027 contributions, not future-year carryforward ordering or expired carryovers.
- Use the proposed October 2026 regulations only under their stated reliance provisions. Verify final filing instructions, the SGO's listing, the state's participation, and contribution documentation when preparing the return.
Common mistakes and caveats
- Cash must reach a qualifying IRS-listed SGO in a participating state during 2027. An organization's charitable status alone is insufficient, and the donor need not reside in that state.
- Do not count stock, property, tuition paid directly to a school, earmarked payments for a particular student, or donations made before January 1, 2027. This is a donor credit, not a tuition deduction or a child's scholarship eligibility calculator.
- The state-credit input is only the portion attributable to qualified contributions after applying the proposed allocation rules. It is not necessarily your entire state scholarship credit; check ordering when the same payment includes nonqualifying amounts.
- Amounts credited or carried forward cannot also generate a federal charitable deduction. Excess donations may have separate deduction treatment under the applicable rules. Keep acknowledgments and review filing requirements.
FAQ
When does the scholarship tax credit start?
Qualifying cash contributions beginning January 1, 2027 can qualify under Section 25F. A 2026 donation cannot be shifted into the program simply because the return is filed later.
Is the maximum credit $1,700 per child?
No. The annual cap is per eligible individual donor. A joint return can combine up to $1,700 for each spouse if each has qualifying contributions; the number of children does not set the credit limit.
Can I donate to an organization in another state?
Yes, residency in the SGO's state is not required. The receiving SGO must be on the applicable IRS list for a participating state. Check the current IRS list rather than assuming all states or schools qualify.
Can this credit produce a refund?
The Section 25F credit is nonrefundable. It can reduce remaining income-tax liability, potentially increasing a refund of payments already made, but it cannot create a credit beyond that liability. Unused credit may carry forward five years.
Do state credits reduce the federal credit?
Yes. Reduce qualified contributions by state credits attributable to them before applying the federal donor cap. Special allocation rules matter if part of a payment is nonqualifying, so enter the attributable amount rather than automatically entering every state credit.
Can I deduct the same donation?
Not for the portion supporting the federal scholarship credit, including an unused credit carried forward. Review any excess gift separately under charitable deduction rules, and do not enter the same supported amount into both benefits.
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