The Universal School Choice Act establishes a federal tax credit system designed to expand school choice by incentivizing charitable donations to scholarship organizations that provide K-12 education funding. Individuals can claim tax credits up to $5,000 annually (or 10% of their adjusted gross income, whichever is lower) for donations to these nonprofits, while corporations can claim a 5% credit on donations, with the program capped at $10 billion nationally each year starting in 2026. The bill prioritizes scholarships for lower-income students, requires scholarship organizations to be audited independently and distribute funds promptly, and allows recipients to exclude scholarship money from their taxable income. The legislation also protects religious schools from exclusion and prevents government control of participating organizations, while enabling parents to defend the law if it faces legal challenges. Overall, the bill affects K-12 students, their families, donors, nonprofit organizations, and schools by creating new tax incentives and expanding education options beyond traditional public schools.
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