Senate Democrats introduce bill to repeal the federal scholarship tax credit
A group of Senate Democrats introduced legislation on April 24, 2026 to repeal §25F, the federal Educational Choice for Children Act / Federal Scholarship Tax Credit, citing concerns about diverting federal tax revenue to private and religious schools.
On April 24, 2026, a group of Senate Democrats introduced legislation to repeal §25F — the federal income tax credit for donations to scholarship granting organizations (SGOs) created by the Educational Choice for Children Act (ECCA) and known to the IRS as the Federal Scholarship Tax Credit (FSTC). The credit was enacted as part of the One Big Beautiful Bill Act (P.L. 119-21, §70411) on July 4, 2025.
The repeal effort comes as more than half of U.S. states are weighing whether to opt in to the program, and as the IRS works toward implementing regulations ahead of the program's January 1, 2027 launch. Sponsors of the repeal bill have argued the credit primarily benefits higher-income donors and could divert federal tax revenue toward private and religious schools without sufficient public oversight.
Repeal in the current Congress is widely viewed as unlikely without a change in chamber control, given that the program was enacted through budget reconciliation. But the introduction signals that the political fight over the federal scholarship credit is far from settled, and could resurface in future budget cycles or tax legislation.
For donors and families, the practical effect for now is unchanged: §25F remains the law, the program is on track to begin January 1, 2027, and state opt-in decisions continue.