To amend the Internal Revenue Code of 1986 to allow a credit against tax for charitable donations to nonprofit organizations providing education scholarships to qualified elementary and secondary students.

This proposal would give a federal income tax credit to people who donate cash or stock to tax‑exempt groups that provide K-12 education scholarships. The credit lowers the taxes you owe, up to the larger of $5,000 or 10% of your adjusted gross income each year; if it’s bigger than your tax bill, you can carry the extra forward for up to five years. Scholarships from these groups would not be taxed as income. A nationwide $5 billion limit on credits would apply each year from 2025–2028 (it could be raised in some cases). The Department of the Treasury would give out credits based on when the donation is made, with 10% of the yearly limit split evenly among states for their residents. The bill also sets rules for scholarship groups, including distributing donations within a set time, and says government officials can’t block or discourage families from using these scholarships at private or religious schools. Overall, it creates a tax credit for donations to nonprofits that award K-12 scholarships.

Key points

• Who is affected: Individual taxpayers who donate; K-12 students and families who receive scholarships; scholarship‑granting nonprofits .
• What changes: New nonrefundable tax credit for donations; unused amounts can roll forward up to five years; scholarships aren’t taxed; credits are limited by a $5B annual national cap with a 10% even split among states; first‑come, first‑served based on donation date; rules for how nonprofits handle funds; governments can’t block or discourage use at private or religious schools.
• When: The national cap applies to tax years 2025–2028.