When President Trump signed his "One Big, Beautiful Bill" last Friday, the new legislation had a huge impact on school choice in the United States. The bill implemented a federal tax-credit scholarship.
Tax-credit scholarships, usually operated on the state level, are a form of school choice that allows individuals or businesses to receive full or partial credits when they contribute to a nonprofit that provides private school scholarships. The tax code change is permanent because there is no expiration date in the law.
“Parents should decide where their kids go to school," said Republican Senator Bill Cassidy. "This bill helps them do that." Cassidy authored the "Educational Choice for Children Act" that was included within the “One Big, Beautiful Bill."
Under the new legislation, any taxpayer who donates up to $1,700 annually to a scholarship-granting organization is eligible for a federal income tax credit for their full contribution, or an equal amount in a reduction of taxes owed. According to the Institute on Taxation and Economic Policy, there is no other charitable giving structure that allows this type of dollar-for-dollar tax incentive.
This bill relies on state governments to designate which scholarship groups can receive funds. The American Federation for Children has been advocating for school choice legislation for 10 years, according to Fox News.
"Every state essentially will have the opportunity to potentially have school choice thanks to this tax-credit scholarship, which will allow any individual in America to donate $1,700 to a local scholarship group, and they can get a full 100% tax-credit, dollar-for-dollar tax-credit," said Tommy Schultz, president of the American Federation for Children. "And at the end of the day, this could help millions of families get access to the school of their choice."
To be eligible, families’ household incomes must not exceed 300% of the median gross income for their state. For example, in Virginia, the median income for a household is $90,974. Under the new school choice tax-credits, any family in Virginia with an income under $272,922 will be fully eligible for the program.
Schultz said, ″For a generation, our movement has fought to give all families, especially lower-income families, the freedom to choose the best K-12 education for their sons and daughters, and now President Trump has signed into law the single biggest advancement of that goal."
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