This bill modifies the federal tax credit for educational scholarships by increasing the credit limit and adjusting it for inflation. Currently, the tax credit for qualified elementary and secondary education scholarships is capped at $1,700 per taxpayer, and this bill raises that limit to $1,700 while allowing married couples filing jointly to claim twice that amount, or $3,400 combined. Starting in 2027, the credit amount will be automatically increased each year to account for inflation, with adjustments rounded to the nearest $50 and published by the Treasury Department by November 1st of each year. The changes take effect for tax years beginning after December 31, 2025, meaning taxpayers will see the higher credit amounts starting with their 2026 tax returns. This legislation essentially makes it easier and more valuable for families to use federal tax credits to help pay for private school tuition and education expenses through scholarship programs.
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