In late November, the Department of the Treasury and the Internal Revenue Service (IRS) issued Notice 2025-70, requesting comments on the implementation of a new tax credit for contributions made to Scholarship Granting Organizations (SGOs). The tax credit applies to taxpayers who donate to an SGO that provides scholarships to low- and middle-income families seeking help with having their children attend a private school. The proposal means that, beginning January 1, 2027, individual taxpayers may claim a nonrefundable federal tax credit for cash contributions to SGOs providing scholarships for elementary and secondary education expenses for low- and middle-income families. The credit allowed to any taxpayer is limited to $1,700 per individual. Today, the Center filed comments calling attention to five essential elements of the proposed regulation, especially the religious freedom and autonomy rights of religious schools.
