The Treasury Department and the IRS issued Revenue Procedure 2026-6 on Dec. 12, which allows states and the District of Columbia to make an advance election to participate in a new federal scholarship tax credit for calendar year 2027.
This new credit, established under the One Big Beautiful Bill Act, is for contributions to scholarship granting organizations that serve elementary and secondary school students from low- and middle-income families.
Beginning Jan. 1, 2027, individual taxpayers may claim a nonrefundable federal tax credit for cash contributions to SGOs providing scholarships for elementary and secondary education expenses.
The credit allowed to any taxpayer is limited to $1,700.
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However, for contributions to an SGO to be eligible for this credit, the SGO must be included on a state list of one or more covered states for the applicable calendar year.
A covered state is defined as one of the states or the District of Columbia that, for a calendar year, voluntarily elects to participate in the credit and identifies SGOs in the state.
Revenue Procedure 2026-6 provides that a state may choose to be a covered state for calendar year 2027 before it provides the IRS with a list of the SGOs located in the state, allowing SGOs additional time to prepare for the commencement of this new credit in 2027.
To make this advance election, sates must submit Form 15714, Advance Election to Participate Under Section 25F for 2027, on or after Jan. 1, 2026, and before the final date on which the state is permitted to submit the state SGO list.
Form 15714 and its instructions are now available on IRS.gov.
The deadline and procedure for perfecting the advance election by submitting the state SGO list will be provided in future guidance, the IRS said.
Future guidance also will address how to make an election to participate in the new tax credit for calendar year 2027 at the same time the state submits the state SGO list, and how to make elections, including advance elections, to participate in the credit for subsequent calendar years.
Notice 2025-70 provides additional guidance and a request for comments regarding state SGO lists and certifications necessary for state elections.
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