26 USC 25F - Qualified elementary and secondary education scholarships

U.S Code last checked for updates: Aug 16, 2025

§ 25F.

Qualified elementary and secondary education scholarships

(a)

Allowance of credit

(b)

Limitations

(1)

In general

(2)

Reduction based on State credit

(c)

Definitions

For purposes of this section—

(1)

Covered State

(2)

Eligible student

The term “eligible student” means an individual who—

(A)

is a member of a household with an income which, for the calendar year prior to the date of the application for a scholarship, is not greater than 300 percent of the area median gross income (as such term is used in section 42), and

(B)

is eligible to enroll in a public elementary or secondary school.

(3)

Qualified contribution

(4)

Qualified elementary or secondary education expense

(5)

Scholarship granting organization

The term “scholarship granting organization” means any organization—

(A)

which—

(i)

is described in section 501(c)(3) and exempt from tax under section 501(a), and

(ii)

is not a private foundation,

(B)

which prevents the co-mingling of qualified contributions with other amounts by maintaining one or more separate accounts exclusively for qualified contributions,

(C)

which satisfies the requirements of subsection (d), and

(D)

which is included on the list submitted for the applicable covered State under subsection (g) for the applicable year.

(d)

Requirements for scholarship granting organizations

(1)

In general

An organization meets the requirements of this subsection if—

(A)

such organization provides scholarships to 10 or more students who do not all attend the same school,

(B)

such organization spends not less than 90 percent of the income of the organization on scholarships for eligible students,

(C)

such organization does not provide scholarships for any expenses other than qualified elementary or secondary education expenses,

(D)

such organization provides a scholarship to eligible students with a priority for—

(i)

students awarded a scholarship the previous school year, and

(ii)

after application of clause (i), any eligible students who have a sibling who was awarded a scholarship from such organization,

(E)

such organization does not earmark or set aside contributions for scholarships on behalf of any particular student, and

(F)

such organization—

(i)

verifies the annual household income and family size of eligible students who apply for scholarships to ensure such students meet the requirement of subsection (c)(2)(A), and

(ii)

limits the awarding of scholarships to eligible students who are a member of a household for which the income does not exceed the amount established under subsection (c)(2)(A).

(2)

Prohibition on self-dealing

(A)

In general

(B)

Disqualified person

(e)

Denial of double benefit

(f)

Carryforward of unused credit

(1)

In general

(2)

Limitation

(g)

State list of scholarship granting organizations

(1)

List

(A)

In general

(B)

Process

(2)

Certification

(h)

Regulations and guidance

The Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this section, including regulations or other guidance—

(1)

providing for enforcement of the requirements under subsections (d) and (g), and

(2)

with respect to recordkeeping or information reporting for purposes of administering the requirements of this section.

(Added Pub. L. 119–21, title VII, § 70411(a)(1), July 4, 2025, 139 Stat. 215.)

cite as: 26 USC 25F