What Is the FSTC Program?
The Federal Scholarship Tax Credit (FSTC), also known as the Education Freedom Tax Credit (EFTC), is a federal tax credit designed to encourage donations that help students access educational opportunities.
The program allows eligible taxpayers to support scholarship organizations that help families pay for qualifying educational expenses.
How Does the Program Work?
A taxpayer makes a donation. The donor contributes to an approved Scholarship Granting Organization (SGO).
The donor may receive a federal tax credit. Individual donors may receive a tax credit of up to $1,700 for qualifying contributions, subject to federal requirements.
Students receive scholarships. SGOs use donations to award scholarships to eligible K–12 students for qualifying educational expenses.
When Does the FSTC Program Begin?
The program is scheduled to begin on January 1, 2027.
States must opt in for scholarship contributions to qualify under the program.