Sponsors (34)
Introduced April 15, 2026 by Mark Edward Kelly · Last progress April 15, 2026
The bill simplifies tax filing and could raise federal revenue by removing a scholarship donation tax benefit, but it risks reducing private scholarship funding and increasing taxes for some recipients—potentially harming low-income students and the nonprofits that serve them.
Taxpayers who do not use the scholarship contribution credit or exclusion will face a simpler tax code with fewer special provisions to track, reducing complexity for many filers.
Federal finances (and ultimately taxpayers) could benefit from increased federal revenues if the credit and exclusion are eliminated, potentially freeing funds for other programs or deficit reduction.
Donors to scholarship-granting organizations will lose a tax credit, which will reduce the after-tax incentive to give, likely causing funding shortfalls for nonprofit scholarship organizations and decreasing privately funded scholarship availability for students—particularly low-income students.
Individuals who previously received amounts excluded from income under section 139K may owe taxable income on those amounts after 2026, increasing tax bills for recipients—many of whom are low-income.
Based on analysis of 2 sections of legislative text.
Repeals two federal tax provisions that provided a tax credit and an income exclusion for contributions to scholarship-granting organizations, removing those tax benefits after 2026.
Establishes a short title for the Act and repeals two federal tax-law provisions that provide tax benefits tied to contributions to scholarship-granting organizations. The tax credit and the income exclusion for such contributions are eliminated, with the changes taking effect for taxable years ending after December 31, 2026 (and for amounts received after that date in the case of the income exclusion).