Federal Scholarship Tax CreditA free guide from the Mississippi Center for Public Policy
— For Mississippi families, taxpayers & schools —

The Federal Scholarship Tax Credit
A Mississippi Guide

Something historic is happening in American education. A new federal law lets everyday taxpayers redirect a slice of what they would otherwise hand over to the IRS to fund a child's schooling — at zero cost to themselves. You send it to a Scholarship Granting Organization, or SGO, and claim it straight back on your tax return as a dollar-for-dollar credit — so your dollars go to a child's education instead of to Washington. Mississippi has just opted into the program. Here's what it means for you, in plain English.

Mississippi opted in on January 19, 2026 — the program is coming to our state.
The Mississippi SGO Indexsee which SGOs can fund your child's education — coming soon Click here →
$1,700
Dollar-for-dollar federal tax credit, per taxpayer, every year
2027
First tax year the credit is available
300%
Scholarships go to families up to 300% of area median income
⬇ Download the fact sheet (PDF) Find an SGO →

How the money flows

1
You opt in

Redirect up to $1,700 of the federal tax you'd otherwise owe.

2
You choose the SGO

You decide which approved Mississippi SGO receives it — not the IRS.

3
The SGO awards scholarships

From its pooled funds it grants scholarships to eligible students and pays their schools — not cash to families.

4
A child gets an education

The scholarship covers tuition and qualified costs at that school.

For donors

What you control — and what you don't

Your one decision is which SGO to support. From there the SGO takes over, and the law keeps everyone at arm's length from individual students and schools — which is exactly what keeps the program clean.

You choose the SGOYour money goes to the Scholarship Granting Organization you pick. Each has its own mission — the kinds of schools and students it serves — so choosing the SGO is how you steer your support.
The SGO decides the restIt awards scholarships to eligible students on its own criteria, and sets the amounts. By law it must spread them across more than one school — never a single-school vehicle.
No earmarking — by lawYou can't direct your gift to a particular student or school, even indirectly, and you can't fund your own child. Your contribution joins the SGO's general pool.
The money stays restrictedScholarships pay only tuition and qualified education expenses, toward the child's schooling. The money follows the student to their school — it never becomes cash in a family's hands.
The fact sheet

What is an SGO — and what is the credit?

Created by the One Big Beautiful Bill Act (July 4, 2025) — Internal Revenue Code §25F, often called the Education Freedom Tax Credit. The essentials, in brief:

What an SGO is

A 501(c)(3) nonprofit that turns contributions into K–12 scholarships. It must stay within one state, serve 10+ students across more than one school, and spend 90%+ of its income on scholarships.

A credit, not a charity ask

This isn't a donation — it's a redirection. What you send an SGO comes straight back off your federal tax bill: up to $1,700 per taxpayer ($3,400 per couple). Unused credit carries forward five years.

Who the scholarships are for

Eligible K–12 children in households up to 300% of area median income — most Mississippi families. Can be combined with state programs.

No double-dipping

For dollars you send an SGO, you can't also claim a charitable deduction or state credit. Cash only. Permanent, with no national cap.

Your gift isn't tied to one child

By law you can't earmark a contribution for a particular student — including your own. It joins the SGO's general pool, and the SGO awards scholarships to eligible students on its own criteria, paying their schools directly (tuition, plus tutoring, books or special-needs support). Families never receive cash.

Why a state must “opt in”

The credit only works where the governor joins and sends the IRS a list of approved SGOs. Mississippi has opted in — the Governor's office is now naming them.

What it means for you

Three ways Mississippians can take part

💰

Taxpayers & donors

  • Redirect up to $1,700 of your federal taxes to a child's education at no net cost.
  • Married couples filing jointly can give up to $3,400.
  • Starts with the 2027 tax year — gifts made in 2027 count on that year's return.
  • Give to an approved Mississippi SGO once the state's list is published.
🏫

Parents & students

  • Scholarships open to households up to 300% of area median income.
  • Use awards for tuition, tutoring, fees, books, supplies and disability supports — public, private, or charter.
  • Can be combined with existing state choice options.
  • Watch this page for the SGOs that will award Mississippi scholarships.
🎓

Schools & nonprofits

  • Existing or new 501(c)(3)s can seek to become approved SGOs.
  • Must serve 10+ students across more than one school.
  • Designation runs through the Governor's office and the IRS list.
  • Tell us below if you're standing up an SGO in Mississippi.
Key deadlines

The road to implementation

The program moves from law to live over 2025–2027. Here's where things stand and what's next.

Jul 4, 2025
Signed into law. The One Big Beautiful Bill Act creates the federal Scholarship Tax Credit (IRC §25F).
Jan 1, 2026
States may opt in. Governors can file an Advance Election (IRS Form 15714) to participate for 2027.
Jan 19, 2026
Mississippi opts in. Governor Reeves elects the state into the program.
Jan 1, 2027
The credit goes live. Taxpayers can donate to approved SGOs and claim the credit on their 2027 federal return.
2027–28
Scholarships flow. SGOs award funds to eligible students for the school year.
The directory

Find an approved SGO

Your one place to compare every approved Mississippi SGO before you give or apply.

⚠ Coming Soon

The Mississippi SGO Index

MCPP will maintain an index of every local SGO in Mississippi — with key metrics on what each one does and who it benefits — so that you can make an informed choice as a taxpayer, parent, or student.

Why it isn't here yet No organization can simply declare itself an SGO. Under the federal law, Mississippi's Governor decides which nonprofits qualify. The Governor's office vets and designates the eligible SGOs and submits that official list to the IRS — and only organizations on that list can receive the donations that earn the tax credit. The Governor began this process after opting Mississippi in on January 19, 2026, and is expected to name the state's SGOs over the coming months. The moment that list is published, every approved SGO will appear here — each with MCPP's own guide to it.
Notify me when the Index is live ⬇ Download the fact sheet (PDF)

Stay in the loop — or tell us you're starting an SGO

Whether you're a parent who wants to be first to know, or an organization planning to become an SGO, leave your details and we'll keep you posted.

Submitting opens your email app with the details ready to send to the Mississippi Center for Public Policy. We never share your information.
Questions

Frequently asked

Is this a tax deduction or a tax credit?
A credit — far more valuable. A deduction only reduces your taxable income; this credit comes straight off your tax bill, dollar for dollar, up to $1,700.
Does it really cost me nothing?
If your contribution is within your federal tax liability, the credit returns the full amount, so the net cost is $0. The credit is non-refundable, so it can't push you below zero tax. It's not tax advice — check with your preparer.
When can I give and claim it?
The credit applies starting in tax year 2027. Donations to approved Mississippi SGOs made in 2027 are claimed on your 2027 federal return.
Who can receive a scholarship?
K–12 students in households earning up to 300% of area median income. That threshold covers the large majority of Mississippi families.
Can my child use this and a state program?
Yes. There's no federal rule preventing a student from receiving an SGO scholarship while also taking part in a state school-choice program.
Can I choose which child benefits — or fund my own?
No. By law your contribution can't be earmarked for a particular student, including your own child (donors and their families are "disqualified persons"). Your money joins the SGO's general pool, and the SGO awards scholarships to eligible students on its own criteria. You choose the SGO — not the student.
Does this take money away from public schools?
No. The credit doesn't divert state or local tax dollars — which fund the large majority of public schools. It simply channels voluntary charitable gifts from individual taxpayers into scholarships for eligible students, who may use them at public, private, or charter settings.
How does an organization become an SGO?
It must be a 501(c)(3) operating within Mississippi, serve 10+ students across more than one school, and be designated by the Governor's office and included on the state's list to the IRS. Reach out below if you're planning one.
Are the details final?
The core law is set, but the IRS is finalizing implementing rules through 2026, with further public comment expected. We'll update this page as guidance is issued.
Where this comes from

Official sources

This page is for general information, not tax or legal advice. The Mississippi Center for Public Policy is not a tax advisor. Figures reflect the law and IRS guidance as of June 2026; implementing rules are still being finalized. Consult a qualified tax professional about your own situation.