For grandparents: supporting a grandchild's school

You donate cash to CEN SGO. CEN awards scholarships to eligible students at partner schools. You claim the credit on your federal return for the year you donated. Only cash counts, not stock or property. (Source: §25F(c)(3))

You can live in any state. What matters is that the school's state has joined and lists CEN SGO. (Source: §25F(a); §25F(c)(3))

In the donor portal you can estimate your credit, choose the school, set up recurring donations and pull your tax documents. CEN sends a written acknowledgment with your donor number, which you'll need when you file. (Source: Treasury guidance preview, June 2026)

When you donate, choose your grandchild's school. Your donation goes into that school's scholarship fund. The law bars an SGO from earmarking or setting aside donations for a particular student. (Source: §25F(d)(1)(E))

Your grandchild can still receive a scholarship from that fund if they're eligible and apply, but CEN makes the award under the same rules as for every family. The law also bars scholarships to disqualified persons, under rules like those for private foundations, and Treasury will say exactly who counts. (Source: §25F(d)(2))

Paying your grandchild's tuition straight to the school doesn't earn this credit. Only a cash donation to an SGO does. (Source: §25F(c)(3))

Many retirees do. The credit takes your federal income tax to zero this year and the rest carries forward up to five years, oldest first. (Source: §25F(f))

Example. Ruth is retired with $1,100 of federal tax. She donates $1,700. She uses $1,100 now and $600 next year.

Example. Walter owes $400 of federal tax a year and donates $1,700 in 2027. He uses $400 each year from 2027 to 2030, and the last $100 in 2031. If he donates again in 2028, the older credit is used first. (Source: §25F(f)(2))

If you're unsure what you owe, line 22 of last year's Form 1040 (your tax after credits, before other taxes) is a guide, or use the credit calculator.

If you file jointly, plan on one $1,700 credit per return until Treasury rules on joint filers. If you file separately, you each have a cap.

Example. George and Helen file jointly and owe $6,000 of federal tax. They donate $1,700 together and claim $1,700. If Treasury later allows each spouse a cap, they could donate more in later years.

The credit reduces federal income tax. If most of your income is Social Security and you owe little or no federal income tax, you may not be able to use the credit in one year. The carryforward helps, but only if you owe tax in a later year. Credit still unused after five years expires. Ask your preparer. (Source: §25F(f))

If your state has its own scholarship credit, you can't claim it and the federal credit on the same donation, so a state credit needs a separate donation. (Source: §25F(b)(2)) And a donation that earns the federal credit can't also be deducted as a charitable contribution. (Source: §25F(e)) Your state page shows what applies where you live.

• Grandchildren at different schools. The $1,700 cap is per taxpayer for the year, not per school. If you donate to more than one school, the cap covers all your donations together. (Source: §25F(b)(1))
• Your grandchild's school isn't a partner. Recommend it. Until it joins, you can choose another partner school.
• Your grandchild's state hasn't joined. Donations can't fund scholarships there until it does. (Source: §25F(c)(3))
• You want to donate from an IRA. It's unclear whether that counts as a cash donation for this credit. Ask your preparer first.
• You want to donate stock. It won't earn this credit. Sell it first and donate cash, but ask your preparer about the tax on the sale. (Source: §25F(c)(3))

If you're raising a grandchild, you can apply for a scholarship as their household. Your household's income for last calendar year is what's measured, against the limit for your county and household size. (Source: §25F(c)(2)(A)) A grandchild in foster care meets the income test automatically. (Source: Treasury guidance preview, June 2026)

Treasury hasn't defined household income yet. Tell us your setup when you apply and we'll tell you what to send. Start with Who qualifies and How to apply.