State Preparation for Federal Scholarship Tax Credit

Election to participate in the Federal Scholarship Tax Credit

Beginning Jan. 1, 2027, individual taxpayers may be able to claim a Federal Scholarship Tax Credit, commonly known as the Education Freedom Tax Credit. The amount of the credit is up to $1,700, or up to $3,400 for married couples filing jointly, for charitable contributions of cash to certain public charities that grant scholarships for qualifying educational expenses (Scholarship Granting Organizations, or SGOs).

A state or the District of Columbia (state) must choose to participate and provide a list of SGOs in that state to the IRS before an individual taxpayer can contribute to an SGO within that state and claim the tax credit.

The IRS will be launching a new online portal this fall for states to submit their SGO lists for the 2027 calendar year.

Preparation for State Portal registration

In preparation for the launch of the State Portal this fall, the IRS is undertaking several administrative steps to facilitate that process. One step is the creation of an Employer Identification Number (EIN) that each participating state will need to access the portal. This EIN should not be used for any purpose other than for the FSTC. For further information on this EIN see the Temporary regulations under section 25F published in the Federal Register on October 2, 2026. (Federal Register: Federal Scholarship Tax Credit).

States may have recently received a notice from the IRS regarding the creation of this EIN. If a state has not submitted an advance election to participate in the FSTC, but is considering participating, this EIN will be available for the state to use once it has made an advance election on Form 15714, Advance Election to Participate Under Section 25F for 2027. To date, 30 states have elected to participate in the Federal Scholarship Tax Credit. States that have not yet elected to participate may still do so by submitting Form 15714 as described in the Instructions. Doing so now will give the IRS contact information to allow the IRS to keep new electing states informed of important developments.

Once a state has made an election, the IRS will reach out to the state’s designated point of contact with information on the EIN and with future implementation communications. The IRS is verifying the point of contact each electing state provided when they submitted their Form 15714.  Establishing and maintaining a current point of contact is important to allow the IRS to keep each electing state informed as the launch date for the State Portal approaches. A state can use Form 15714 to update the state’s point of contact, submitting it as described in the instructions.

Office Hours to Assist States with Accessing the FSTC State Portal

The IRS is hosting online office hours to assist states with obtaining the resources necessary to access the forthcoming FSTC State Portal.

Online office hours are being offered to all states and is not contingent on a state already making an advance election on Form 15714, Advance Election to Participate under Section 25F. Attendance at the office hours does not constitute an advance election.

The FSTC State Portal will provide states with the ability to:

• Elect to participate in the FSTC program*
• Enter and maintain your list of Scholarship Granting Organizations (SGOs)
• Manage and update state-level information as needed.

*Note: For calendar year 2027, all States must use Form 15714, Advance Election to Participate Under Section 25F.

During online office hours, our team will provide walkthroughs of the process to gain access the FSTC State Portal including:

• Identifying Designated Official(s)
• Creating/Confirming a Business Tax Account (BTA)
• PIN and account activation

Office Hours:

Tuesday, October 13, 2026, 10:00am-11:30am ET

Wednesday, October 14, 2026, 1:00pm-2:30pm ET

Thursday, October 15, 2026, 12:00pm-1:30pm ET

Attendance at the online office hours is limited to a maximum of four government officials or support staff per state. Each session will cover the same topics and information. Participants are welcome to attend the session that best fits their schedule. To request a link to access the online office hour sessions, please send an email to FSTC@irs.gov with the name, title and email address of each participant.

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