The federal scholarship tax credit comes with an annual limit. There is a ceiling on how much each taxpayer can claim in a single year. CEN exists to make Christian education reach more families, and CEN SGO is the program that turns that mission into scholarships. Understanding the cap helps you plan your giving so none of it goes to waste.
This article walks through how the limit works. It is a real number, set in the law, and the exact figure will be posted here once the federal rules are final. For now, here is what the cap does and how it shapes your decision.
The cap is per taxpayer, not per household
The limit applies to each taxpayer. It is not a single shared ceiling for an entire household.
This matters most for married couples. The way the limit applies to a joint return is one of the details the Treasury and the IRS are still finalizing, so we are holding off on stating a couple figure until the rules are confirmed. What is settled is the principle: the credit is built around the individual taxpayer, and the per-taxpayer limit is the figure to plan against.
When the final rules are published, we will post the exact amount, including how it works for couples filing jointly. Until then, plan around the per-taxpayer structure and check back before tax year 2027 opens.
The credit is non-refundable
The federal scholarship tax credit is non-refundable. That word has a specific meaning, and it shapes how the cap works in practice.
A non-refundable credit reduces what you owe in federal income tax, dollar for dollar, down to zero. It will not go below zero. If your credit is larger than your tax bill for the year, the credit zeroes out your bill, but the government does not send you the difference as a refund.
So the cap is two numbers working together. There is the annual per-taxpayer limit set in the law, and there is your own federal tax liability for the year. Your usable credit for that year is the smaller of the two. If you owe less in federal tax than the annual limit allows, your tax bill is the number that controls.
For a closer look at what non-refundable means and how to think about your own liability, see [internal: What is a non-refundable tax credit?].
Unused credit carries forward for up to five years
Here is the part that keeps a gift from going to waste. If you give more than you can use in one year, the unused portion does not disappear. It carries forward for up to five years.
Say your gift earns more credit than your tax bill can absorb this year. The leftover credit moves forward to the next year, and the year after that, for up to five years total, until it is used up or the window closes. This is what makes a larger gift workable even when a single year’s tax bill is modest. You are not locked into using every dollar in the year you give. The Brownstein tax guide covers the non-refundable structure and the carryforward mechanics in detail.
One related point worth knowing. The federal credit is reduced by any state credit you claim on the same gift. If your state has its own scholarship credit, the federal side is calculated after the state side. We cover how the two fit together in [internal: How the SGO credit works alongside your state’s scholarship program].
What this means for your giving
Put the pieces together and the planning logic is simple.
- Your annual claim is capped at the per-taxpayer limit set in the law.
- You cannot claim more credit than you owe in federal tax for the year, because the credit is non-refundable.
- Anything you cannot use this year carries forward for up to five years.
- A state credit on the same gift reduces the federal credit.
The practical takeaway is that you can give with confidence even if your tax picture varies year to year. The carryforward is your cushion. And because the program does not begin until tax year 2027, you have time to plan the size of your gift with your CPA before the giving window opens. For help framing that conversation, see [internal: Talking to your CPA about year-end giving through the SGO].
Frequently asked questions
What is the dollar amount of the annual cap?
The law sets a specific per-taxpayer figure. The exact amount, and the rule for couples filing jointly, depends on final federal guidance that is still being completed. We will post the confirmed number here as soon as the rules are final.
If my gift earns more credit than I owe this year, do I lose it?
No. The credit is non-refundable, so it will not turn into a cash refund, but any unused amount carries forward for up to five years. You can use it against future federal tax bills.
Does the cap apply to my whole family or to me alone?
It applies per taxpayer. The detail of how the limit works on a joint return is part of the guidance still being finalized, which is another reason to confirm with your CPA before tax year 2027.
When the giving window opens in 2027, you will be ready to make the most of every dollar you redirect. To be the first to know when the exact figures are posted and the window is live, Get notified.