Education Freedom Tax Credits expand scholarship funding options

The One Big Beautiful Bill Act has introduced the Education Freedom Tax Credit (EFTC) program, which provides indirect support for student scholarships through tax incentives for donors. Under this federal program, individuals who donate to scholarship-granting organizations (SGOs)—501(c)(3) nonprofits—can receive a nonrefundable tax credit that matches their donation dollar-for-dollar, up to $1,700 per individual.

To participate, states must opt in and provide a list of qualified SGOs within their borders. Florida has opted into this program, a move previously announced by Governor Ron DeSantis. In Florida, nearly 1.4 million students already utilize school choice options, including Education Savings Accounts (ESAs), public charter schools, and magnet schools. The EFTC expansion is designed to reach households earning up to 300 percent of their area’s median gross income, potentially increasing the pool of available scholarship funding.

While the program aims to increase donations to SGOs by minimizing the net economic loss to donors, it has faced scrutiny from school unions. Critics have raised concerns regarding whether such schemes function as school voucher systems that prioritize private institutions over public ones.