Sponsors (95)
The bill removes a tax preference for certain scholarship-related contributions and payments, modestly increasing federal revenue and leveling tax treatment while shifting costs onto donors and scholarship recipients and likely reducing private scholarship availability for some families.
Taxpayers at large: elimination of the tax benefits will modestly increase federal revenue that could be used to fund public services or education programs.
Students and families: removing the tax preference for certain private scholarship programs reduces a preferential treatment and may level the playing field when states and policymakers decide public vs. private education funding priorities.
Students and low-income families: amounts previously excluded for scholarships or related payments may become taxable for amounts received after Dec 31, 2026, increasing recipients' tax bills.
Students and families relying on private scholarships: reducing the after-tax incentive for donations is likely to decrease charitable giving to scholarship-granting organizations, which could shrink available private scholarship funds and limit education options for some households.
Donors (including middle-class families who give): loss of a federal tax credit reduces the after-tax benefit of contributing to scholarship-granting organizations, discouraging some charitable donations.
Based on analysis of 2 sections of legislative text.
Repeals the federal tax credit for contributions to scholarship-granting organizations and the income exclusion for certain scholarship payments, effective for tax years ending after Dec 31, 2026.
Repeals two federal tax provisions that encourage private school scholarships: the tax credit for contributions to scholarship-granting organizations and the exclusion from gross income for certain scholarship-granting payments. The repeals apply for taxable years ending after December 31, 2026, and the income exclusion repeal also applies to amounts received after that date.
Official title: 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 by Gwendolynne S. Moore · Last progress June 11, 2026