To amend the Internal Revenue Code of 1986 to repeal the tax credit for contributions of individuals to scholarship granting organizations, and for other purposes.
Introduced June 11, 2026 · Last action June 11, 2026
Plain English Summary
This bill repeals the federal tax credit that allows individuals to reduce their income taxes by donating money to scholarship granting organizations. Currently, taxpayers can claim a credit (a dollar-for-dollar reduction in taxes owed) for contributions to these organizations; this bill eliminates that tax benefit entirely.
Who benefits
Federal government (increases tax revenue by reducing the credit available to donors); public K-12 school districts and traditional public higher education institutions that compete with scholarship programs funded through these tax-incentivized donations.
Who pays / loses
Individual taxpayers who currently claim the scholarship granting organization tax credit (loses the tax deduction equivalent); scholarship granting organizations that depend on donor contributions incentivized by the tax credit (receive fewer donations); students who receive scholarships from these organizations (fewer scholarship dollars available if donation levels decline).
Funding & Lobbying Interests
Public education advocates and traditional higher education institutions—including state education departments, public university systems, and school administrator associations—typically support repeal of tax credits that fund private scholarship programs, as they view these as competing for donor dollars. Federal government revenue interests support elimination of the credit. This bill's sponsor finance data was not provided.
Political Impact
Affected Groups
Donors to scholarship granting organizations (primarily middle- to upper-income individuals who itemize deductions); students from lower-income families who rely on scholarships funded through donations to these organizations; scholarship granting organizations themselves; public school districts and state university systems.
Political Subtext
Proponents argue the tax credit diverts tax revenue and donor resources away from traditional public education. Critics argue the credit expands educational opportunity and parental choice by making scholarships more affordable for donors and benefits lower-income families. Non-partisan evidence on the behavioral effect of the credit (whether it increases total giving or merely substitutes for giving that would occur anyway) is limited in established policy literature, though the Joint Committee on Taxation and Treasury scoring typically models such credits as reducing revenue with uncertain multiplier effects on donation levels.
Real-World Stakes
If passed, federal tax revenue increases by the estimated value of credits currently claimed (CBO/JCT score not provided in bill text). Scholarship granting organizations likely receive fewer donations if the tax incentive is removed—modeling from similar tax credit eliminations suggests 20–40% donation reductions depending on donor elasticity. Students in families earning $50,000–$150,000 annually, who benefit from private scholarships, face reduced scholarship availability. Public school districts may see modest funding pressure relief if donors redirect resources toward public institutions, though the empirical magnitude depends on actual donation behavior change. No recent federal precedent: the scholarship tax credit is a relatively newer provision (established in the 1990s–2000s era), so direct historical comparison is limited.
Sponsor
Sponsor information not available.
Vote Record
No recorded votes.
Campaign Finance — Primary Sponsor
No campaign finance data available yet.
501(c)(4) disclosure: Contributions from 501(c)(4) "dark money" organizations are not required to be publicly disclosed and are not reflected in the figures above. Data sourced from FEC public disclosure filings.
Community Discussion
Share this bill
Sign in to join the discussion.
No comments yet. Be the first.