Federal Scholarship Tax Credit (SGO Credit) | HelloBooks From January 1, 2027, individuals can claim a credit for cash gifts up to $1,700 to scholarship granting organizations in states that opt in.
A new federal credit rewards cash gifts to approved scholarship granting organizations. It starts in 2027 and only works in states that have opted in, so the first question for any client is where they live.
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Contributions that count
Up to $1,700
Applies: From January 1, 2027From IRS.gov · checked October 10, 2026
Beginning January 1, 2027, individuals may be able to claim a Federal Scholarship Tax Credit for certain cash contributions of up to $1,700 to scholarship granting organizations. A state must elect to take part and give the IRS a list of its approved organizations before donors there can claim the credit.
As of September 14, 2026, the IRS listed 30 participating states, including Florida, Georgia, North Carolina, Ohio, Tennessee, Texas and Virginia. The list can change, so check the IRS page before advising a client in a state not yet listed.
The credit is for 2027 gifts, so there is nothing to claim on 2025 or 2026 returns. For giving clients in participating states, note it in their 2027 planning file and ask them to keep the organization’s acknowledgment with each gift.
The plain-English summary for business owners
Deductions · charitable giving
By client type · families with children
By client type · nonprofits
General information for tax professionals, not advice on a specific return. Figures are from IRS.gov on the date shown; check the current IRS instructions before filing.
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