Updated 6 hours ago
Last progress January 28, 2025 (1 year ago)
Educational Choice for Children Act of 2025
Updated 6 hours ago
Last progress January 31, 2025 (1 year ago)
To provide for reconciliation pursuant to title II of H. Con. Res. 14.
Updated 5 hours ago
Last progress July 4, 2025 (7 months ago)
Last progress January 29, 2025 (1 year ago)
Introduced on January 29, 2025 by Bill Cassidy
Read twice and referred to the Committee on Finance.
Creates new federal tax credits for individuals and corporations that give to scholarship-granting organizations which pay for K–12 private or religious school tuition and other qualified elementary and secondary education expenses. Sets a $10 billion annual national cap starting in 2026 with a state allocation rule and real-time tracking, excludes scholarship amounts from a dependent’s taxable income, and bars government control or discrimination against participating private or faith-based schools. Most changes apply to taxable years ending after December 31, 2025.
Adds a new individual tax credit (new IRC section 25F) allowing a U.S. citizen or resident individual to claim a credit equal to the total amount of 'qualified contributions' the taxpayer made during the taxable year.
Limits the individual credit to the greater of 10 percent of the taxpayer's adjusted gross income for the taxable year or $5,000.
Requires the individual credit not to exceed the volume cap amount allocated by the Secretary under section 3 (allocation rule).
Reduces the federal credit by any amount the taxpayer claimed as a State tax credit for the same qualified contributions.
Defines 'eligible student' as an individual who (A) is in a household with income not greater than 300 percent of the area median gross income (as used in section 42) and (B) is eligible to enroll in a public elementary or secondary school.
Directly affected groups include students and families who receive scholarships, donors (individuals and corporations) who can claim federal tax credits, scholarship-granting organizations that solicit and distribute funds, and private and religious K–12 schools that accept scholarship students. The measure will likely increase private funding flowing to scholarship programs and private/faith-based schools by making donations more attractive through tax credits and by excluding scholarship awards for dependents from taxable income. Scholarship organizations will face new compliance, verification, and reporting duties; Treasury/IRS will need to build and operate a real-time allocation and tracking system and manage annual cap allocations. State governments are affected by the cap allocation rule (10% set-aside) and by limits on state or local regulation that would treat participating schools or organizations as government agents. Potential downstream effects include reduced federal revenues from the credits, possible shifts in enrollment from public to private schools in areas with active scholarship programs, and legal challenges centered on church-state and government-preemption questions. Equity concerns may arise if scholarship distribution or donor behavior favors certain students, schools, or localities; implementation detail and state-level interaction will determine how broadly benefits are distributed.
