Two credits, two donations: how the federal credit works alongside your state's

Both credits use the same idea: donate to an SGO, reduce your tax. The federal credit is up to $1,700, dollar for dollar, the same in every state, with a five-year carryforward and no national program cap. State credits vary a lot. Some cover the whole donation, some a share of it. Many have their own limits per donor and a yearly cap for the whole program. (Source: §25F(b)(1), (f))

You cannot count one dollar twice. If your state has its own SGO program, you cannot claim both state and federal credits with the same donation. If you give to a scholarship granting organization and claim a state credit on that donation, then you need to make a separate donation to claim a federal income tax credit. (Source: §25F(b)(2))

You cannot use the same dollars for multiple credits. You should speak with your tax advisor about both programs (if there is a program in your state) together, to plan a donation that makes the most of each.

States that opt in will also tell the IRS about their own scholarship credits. Treasury's plan has each state describe its credit when it certifies its SGO list, and it asked states what else they can share to check this rule. (Source: Notice 2025-70, §3.03, §3.06)

Different donations, different receipts, different returns. The law requires an SGO to hold federal-credit donations in a separate account, apart from other money. (Source: §25F(c)(5)(B))

Ohio's credit is up to $750 per person, or $1,500 on a joint return, with each spouse's share capped at $750. A married couple each donate $750 to CEN SGO's Ohio state program and claim $1,500 against Ohio income tax. They separately donate $1,700 to CEN SGO's federal program and claim $1,700 against federal income tax (one cap per joint return, pending Treasury). Two receipts, two returns. The Ohio page (Source: Ohio R.C. 5747.73(B))

So an Ohio donor can make the state donation as late as the spring filing deadline, but the federal donation for 2027 has to be made in 2027. (Source: Ohio R.C. 5747.73(B), §25F(a), (f))

Alabama, Iowa, Nevada and Virginia run state scholarship credit programs with their own rules. North Dakota, Tennessee and Texas don't have one for individuals. Nebraska offers a state business tax credit for donations to SGOs, but no income tax credit for individuals. We're confirming the current position in Utah. Each state page says what applies. States

Some states run vouchers or education savings accounts as well as, or instead of, a tax credit. They work differently, and families can often use more than one.

An SGO tax credit works the other way. A donor makes a voluntary donation to a scholarship granting organization, which the organization gives to a student, and the donor is able to claim it as a credit against taxes they already owe. No tax money goes to private individuals or organizations. No one is forced to give. A voucher comes from public tax dollars. The SGO scholarship comes from private donations. One is the state spending. The other is generosity.

A family can often hold a state award and a CEN scholarship at the same time. Treasury expects states to stop two awards paying for the same cost, so together they can't cover more than the cost itself. (Source: Treasury guidance preview, June 2026)

• What share of the donation comes back, and up to what amount?
• Is there a yearly cap for the whole program, and does it fill up?
• Do you need approval before you donate?
• Can you donate after December 31 and count it for the year before?
• Is the SGO you're donating to certified for the state program?

Your state page answers these for each state with a guide. For others, check with your state's revenue department.

• One donation, two credits. You can't claim a state credit and the federal credit on the same donation.
• Waiting until spring for the federal donation because the state allows it.
• Mixing up receipts. Give your preparer both, and say which is which.

Treasury hasn't said yet how the IRS will check state credits against federal claims. We'll update this page when its rules are out.