Treasury previews its rules

On June 9, Treasury previewed the rules it's writing for the credit. On June 10 it named the program the Education Freedom Tax Credit. It committed to publishing proposed rules by the end of September 2026, and said states, organizations and taxpayers could rely on them for 2027.

You'll see other names too. The IRS calls it the Federal Scholarship Tax Credit. In Congress it was the Educational Choice for Children Act. In the tax code it's section 25F. They're all the same credit.

What the preview covered

The 90% test, which says how much of an organization's income must go to scholarships, and a safe harbor for meeting it. How organizations that work in more than one state are treated. The routes for checking a family's income against the 300% limit. Annual audits. Steps states will need to stop duplicate awards to the same student for the same expense. A unique donor number on every acknowledgment, and a planned IRS portal.

The donor number

This is the part donors will notice. Under the system Treasury described, the organization creates a unique donor number by a method the IRS provides. It puts that number on your acknowledgment and reports your donation to the IRS under it. You put the same number on your return. The IRS matches the two, much as it matches a W-2.

It also means you won't hand your Social Security number to the organization. Treasury's earlier notice had floated having organizations collect donors' taxpayer ID numbers. The preview moved away from that. (Source: Notice 2025-70, §4.05)

After the year ends, you'd also get a summary of all your donations for the year, with the total and your donor number.

What's still open

Some questions are still open. The biggest for donors is how the $1,700 limit works for couples filing jointly. The statute says $1,700 per taxpayer and doesn't mention joint returns. Treasury also hasn't said how donor-advised funds and IRA distributions are treated, or published the IRS claim form. (Source: §25F(b)(1))

What we're doing

CEN is building its donor acknowledgments around the donor number. We'll read the proposed rules when they're out and update every guide they affect.

Background

The law left much of the detail to Treasury. Section 25F tells it to write rules to enforce the requirements for organizations and states, and to set recordkeeping and reporting. Treasury's first step was Notice 2025-70 in November 2025, which asked the public for comments. The June preview shows where it's heading. (Source: §25F(h))

What it means for donors

The core of the credit doesn't change. The $1,700 cap, the January 1, 2027 start, cash only, the five-year carryforward and the ban on also deducting the same dollars are all in the statute. What the preview adds is how you'll show your donation: an acknowledgment with a donor number, and a matching step at the IRS. (Source: §25F(a), (b)(1), (c)(3), (e), (f))

What it means for schools

Schools don't check family income. The organization does, by the routes Treasury approves. The preview also means states will need steps to stop the same expense being paid twice, so schools should expect questions about other aid a student receives. Scholarships will still be paid to the school and credited to each family's tuition account.

What happens next

Treasury committed to proposed rules by the end of September 2026. State certification windows for organizations are expected to open in fall 2026. Donations for the credit start on January 1, 2027, and the IRS claim form is expected in early 2028.