The IRS and Treasury Department are soliciting comments from the public regarding upcoming regulations related to a new federal tax credit for contributions to scholarship-granting organizations, established in the One Big Beautiful Bill Act. According to Accounting Today, in Notice 2025-70, which was released this week, the agencies outlined how the credit would work and invited stakeholders to comment ahead of formal regulations being issued. 

Beginning with tax years after Dec. 31, 2026, taxpayers can claim a nonrefundable dollar-for-dollar credit of up to $1,700 per year for donation to eligible scholarship-granting organizations. The SGOs would generally be 501(c)(3) nonprofits that provide scholarships to K-12 students from low-income and middle-income households. An organization would need to use at least 90% of its income for scholarships and limit its recipients to students from households that have an income of no more than 300% of their area’s median gross income. Students would also have to be eligible to attend public schools. Any unused credit can be carried forward for up to five years, although the federal benefit would be reduced if the donor also received a state-level credit for the same contribution. 

States will play a significant role in determining eligibility. For contributions within a state or the District of Columbia to qualify, the state must opt in and provide the IRS with an annual list of SGOs meeting the statutory requirements. 

The IRS is asking commenters to address state certification processes, oversight mechanisms, and how the rules should apply to SGOs operating across multiple states. Comments are invited through the Federal e-Rulemaking portal until Dec. 26, 2025, and paper submissions can be sent to the address in Notice 2025-70.