TL;DR

  • July 4, 2025: §25F enacted as part of the One Big Beautiful Bill Act.
  • Late 2025: IRS opens rulemaking (Notice 2025-70) and releases the advance-election procedure (Rev. Proc. 2026-6, Form 15714).
  • 2026: states make advance elections and submit SGO lists; Treasury is expected to issue proposed regulations.
  • January 1, 2027: the credit goes live — donations from this date forward count.
  • Early 2028: donors claim the first §25F credits on their 2027 returns.

2025 — enactment and first guidance

July 4, 2025. The Education Freedom Tax Credit was created as Section 70411 of the One Big Beautiful Bill Act (Public Law 119-21), which added IRC §25F (the donor credit) and IRC §139K (the income exclusion for scholarship recipients).

November 25, 2025. The IRS issued Notice 2025-70, opening formal rulemaking and requesting public comment on state certification, SGO requirements, donor substantiation, and income verification. The comment period closed December 26, 2025.

December 12, 2025. Treasury and the IRS released Revenue Procedure 2026-6 and Form 15714, establishing the advance-election process that lets states pre-commit to participating in 2027.

2026 — elections, lists, and rulemaking

January 1, 2026. The window opens for states to file the advance election (Form 15714) declaring intent to be a covered State for 2027. Read how states opt in for the mechanics.

Through 2026. Governors (or designated state authorities) make participation decisions and prepare the list of qualifying SGOs they will submit to the U.S. Treasury. Treasury is also expected to publish proposed regulations implementing §25F during this window. Track where each state stands on the state-by-state status map.

For the first program year, §25F(g) tells states to submit their SGO list “as early as practicable” rather than strictly by a fixed January 1 date — recognizing that 2027 is the program’s startup year. In later years the list is due by January 1.

2027 — the credit goes live

January 1, 2027. §25F takes effect. Under §70411(c), the credit applies to taxable years ending after December 31, 2026 — so cash contributions made on or after January 1, 2027 to a qualifying SGO in a covered State can generate the federal credit. Scholarship amounts received by families are excluded from income under §139K.

Donors anywhere in the country can give to an SGO in any covered State — the credit follows the SGO’s state, not the donor’s residence. Families apply through SGOs serving their state.

2028 — the first filing season

Early 2028. Donors claim their 2027 §25F credits when they file their 2027 federal returns. The credit is non-refundable and capped at $1,700 per return; unused amounts carry forward up to five years. The specific IRS form or schedule for claiming the credit is expected to be published ahead of that filing season. See the federal tax credit explained for worked donor examples.

Then: an annual cycle

After the first year, the program settles into a yearly rhythm: states decide whether to participate, submit their SGO lists by January 1, SGOs raise and award funds through the year, and donors claim credits the following spring. A state that sits out one year can join the next; a participating state can withdraw. The political and operational calendar repeats annually.

Running an SGO into the 2027 launch? SGO Software handles donor collection, §25F receipts, family applications, income verification, awards, and disbursement — built around this timeline.

Frequently asked questions

When does the Education Freedom Tax Credit start?

January 1, 2027. Under §70411(c) of the One Big Beautiful Bill Act, §25F applies to taxable years ending after December 31, 2026, so cash contributions made on or after January 1, 2027 can generate the credit.

When can a donor first claim the credit?

On the federal return for the 2027 tax year — generally filed in early 2028. The credit is non-refundable, capped at $1,700 per return, with a 5-year carryforward for unused amounts.

When do states have to decide?

States can pre-commit for 2027 via the advance election (Form 15714) on or after January 1, 2026, and must submit their list of qualifying SGOs to the U.S. Treasury by the applicable deadline. Participation is then renewed annually.

Is the program permanent?

§25F has no scheduled end date in the statute, but participation is decided state-by-state every year, and the credit could be changed or repealed by future legislation. As of 2026, it remains the law and is on track for the 2027 launch.