The first federal tax-credit-based school choice program is on the table after the U.S. House Ways and Means Committee released Republicans’ “One, Big, Beautiful Bill” on Monday.
The…
The first federal tax-credit-based school choice program is on the table after the U.S. House Ways and Means Committee released Republicans’ “One, Big, Beautiful Bill” on Monday.
The budget reconciliation bill incorporates provisions of Sen. Bill Kennedy’s Educational Choice for Children Act to establish a tax-credit program, capped at $5 billion, for individuals who donate to tax-exempt K-12 scholarship-granting organizations.
In effect, with the provision in place, individual taxpayers could donate up to half their federal tax liability to the program for a dollar-for-dollar tax credit. Those donated funds are then granted by eligible organizations to students for educational expenses such as private school tuition. Students in households earning less than 300% of their area median household income would be eligible to receive funds.
“This provision creates a new tax credit for individuals beginning in calendar year 2026 for charitable contributions to tax-exempt organizations that provide scholarships to elementary and secondary school students,” the budget bill states. “Such students who benefit from the scholarships must be members of a household with incomes not greater (than) 300 percent of the area median gross income and be eligible to enroll in a public elementary or secondary school. Under this provision, the tax credit program runs through calendar year 2029.”
The measure would further President Donald Trump’s education agenda, as he strongly supports universal school choice.
Sen. Bill Cassidy, R-Louisiana, was happy to see the House include his bill in its budget proposal.
“Giving parents the ability to choose the best education for their child makes the (American Dream) possible,” he told ABC News.
It comes as more states pass and expand school choice programs.
Earlier this month, Texas Gov. Greg Abbott signed off on universal school choice legislation that sets $1 billion aside for scholarships for educational expenses, including private school tuition.
“Texas parents will finally have the power to choose what’s best for their kids,” the governor posted on X before signing the proposal.
Meanwhile, Idaho Gov. Brad Little signed a $50 million school choice program into law in February, paid out via tax credits.
“Idaho can have it all – strong public schools AND education freedom,” he said at the time. “Providing high-quality education for Idaho students will always be our top priority.”
The Ways and Means Committee is scheduled to mark up the budget bill Tuesday, and if approved, it must continue to work its way through other committees.
