The IRS asks for comments

In November 2025, Treasury and the IRS published Notice 2025-70, their first formal step toward rules for the credit. It set out how they read the law, described the rules they expect to propose, and asked the public dozens of questions. The comment period closed on December 26, 2025.

How states list organizations

The notice described how a state would certify each organization on its list, and said states would likely file electronically. It also floated letting states opt in early, before sending their list, so organizations had time to prepare. That became Revenue Procedure 2026-6. (Source: Notice 2025-70, §3.02, §3.03)

It also had good news for donors. Treasury expects that a donation to an organization on the state's list at the time of the donation will generally qualify, even if the organization later loses its status. The exception is a donor who knew about or helped cause the problem. (Source: Notice 2025-70, §3.02)

The 90% test

The law says an organization must spend at least 90% of its income on scholarships. Treasury expects to read "income" broadly, to include all of an organization's income. It asked whether that causes practical problems, and whether start-up costs in a first year should be smoothed over several years. (Source: §25F(d)(1)(B), Notice 2025-70, §4.01)

Organizations in more than one state

A donation has to fund scholarships only in the state where the organization is listed. So Treasury expects organizations that work in several states to ask donors to name a state, and to match those donations to scholarships there. It asked what should happen when a donor doesn't name one. (Source: §25F(c)(3), Notice 2025-70, §4.02)

Who can't get a scholarship

The law bars awards to disqualified persons. Treasury asked how to define them. It suggested counting large donors, and members of an organization's selection committee and their families. (Source: §25F(d)(2), Notice 2025-70, §4.04)

Receipts, reporting and income checks

Treasury asked what organizations should report to the IRS, including whether they should collect each donor's taxpayer ID number. It asked whether donors need a written acknowledgment, and what organizations should tell them about the $1,700 cap and the state credit rule. It also asked how organizations should check that a family's income is within 300% of the area median. (Source: Notice 2025-70, §4.05)

What comes next

The proposed rules Treasury has promised will build on what it heard. Until they're out, the statute is the only binding text.

What it means for donors

Two points stand out. Treasury expects to protect donors who give to an organization on the state's list at the time, even if it later loses its status. And it's weighing what an organization must tell you, including that only the first $1,700 can earn the credit and that a donor can't claim a federal and state tax credit on the same donation. (Source: Notice 2025-70, §3.02, §4.05)

What it means for schools

Treasury suggested that members of an organization's selection committee, and their immediate families, would be disqualified persons who can't receive a scholarship. That matters for anyone connected to a school who might help choose students. It also asked how organizations should check family income, which will shape what families are asked to provide. (Source: Notice 2025-70, §4.04, §4.05)

Since then, and what's next

Treasury followed with Revenue Procedure 2026-6 on December 12, 2025, setting how states opt in. States could file from January 1, 2026. On June 9 and 10, 2026, Treasury previewed its rules and named the program the Education Freedom Tax Credit. Proposed rules are expected by the end of September 2026. Donations for the credit start on January 1, 2027.