The New Federal Scholarship Tax Credit Program Has Arrived!
Beginning January 1, 2027, a new program will give
individuals an opportunity to support K–12 scholarships
while receiving a
dollar-for-dollar federal income tax credit
of up to $1,700 annually.
SGO
APPROVED
Big News for Catholic Education
The Catholic Education Foundation of Louisville has been approved!
The Catholic Education Foundation of Louisville has been approved by the Commonwealth of Kentucky to serve as a Scholarship Granting Organization (“SGO”) under this new program.
For the Foundation, this represents a huge opportunity to expand our impact and help more families afford the life-changing gift of a Catholic education in the Archdiocese of Louisville!!
We can’t wait!!!
The Opportunity
$1,700
One contribution can make a powerful difference.
The credit is limited to $1,700 per individual taxpayer per year.
Even Better News!
For married couples filing jointly, the opportunity
expands to $3,400!
Federal Scholarship Tax Credit
How Does the Federal Scholarship Tax Credit Work?
It’s simple:
1
You Make a Contribution
You make a qualifying cash contribution to the Catholic Education Foundation of Louisville of up to $1,700 each year.
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2
The Foundation Provides Scholarships
The Foundation uses qualifying contributions to provide scholarships for eligible students who want to attend a Catholic school in the Archdiocese of Louisville.
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3
You Receive the Tax Credit
You receive a dollar-for-dollar federal income tax credit of up to $1,700 for your qualifying contribution when you file your federal income tax return.
The Important Difference
Unlike a charitable tax deduction, which reduces taxable income, a tax credit directly reduces the amount of federal income tax you owe.
Program Details
What You Need to Know
Program Launch
When Does the Program Begin?
The Federal Scholarship Tax Credit Program takes effect on January 1, 2027.
Qualifying contributions made on or after January 1, 2027, will be eligible for the credit. Because this is a new program, additional guidance from the U.S. Department of the Treasury and the Internal Revenue Service is still being developed.
The Foundation will continue to update this page as additional information becomes available.
Contributors
Who Can Make a Qualifying Contribution?
Under current federal law, the credit is available to individual U.S. citizens and residents who make qualifying cash contributions to an approved SGO.
The federal tax credit is nonrefundable, meaning it can reduce the amount of federal income tax owed but cannot create a refund beyond a taxpayer's tax liability. Under current IRS guidance, any unused eligible credit generally may be carried forward for up to five years.
Individuals should consult their tax advisor regarding their personal tax situation and eligibility for the credit.
Students & Families
Who Can Receive a Scholarship?
Federal law establishes eligibility requirements for students and families receiving scholarships through the program.
Generally, eligible students must meet federal requirements related to household income and K–12 enrollment eligibility. Current regulations establish an income threshold of up to 300% of the area median gross income for the student's household.
The Opportunity
A New Way to Support Catholic Education
Beginning January 1, 2027, a new program will give individuals an opportunity to support K–12 scholarships while receiving a dollar-for-dollar federal income tax credit of up to $1,700 annually.
Even Better News! For married couples filing a joint federal income tax return, each person can contribute up to $1,700 per year and receive the dollar-for-dollar income tax credit, or $3,400 in total.
What could
be better!!! An Exciting New Opportunity
be better!!! An Exciting New Opportunity
Why Are We Participating?
For over 30 years, the Catholic Education Foundation has worked to make Catholic education accessible to families throughout the Archdiocese of Louisville.
The Federal Scholarship Tax Credit provides an exciting new way to expand that work. Essentially, a donor can provide a scholarship of up to $1,700 each year and get their money back when they file their federal income tax return – what could be better!!!
As an approved SGO, the Foundation will be able to receive qualifying contributions and turn those dollars into educational opportunities for eligible students and families.
It’s another way we can all work together to ensure that when a family in need seeks the gift of a Catholic education,
“The Answer is YES!”
Questions & Answers
Frequently Asked Questions
Is this a tax deduction or a tax credit?
It is a federal income tax credit. A credit reduces federal income tax liability dollar-for-dollar, subject to applicable federal rules.
How much is the credit?
Under current federal law, the credit is limited to $1,700 per individual taxpayer per year.
My wife and I file a joint federal income tax return. Can each of us claim the credit?
Yes. For married couples filing a joint federal income tax return, each person can contribute up to $1,700 per year and receive the dollar-for-dollar income tax credit, or $3,400 in total.
I don’t live in Kentucky. Can I still make a qualifying contribution to the Foundation and receive the income tax credit?
Yes. This is a federal program that is available to any U. S. citizen or resident, regardless of the state in which you live. You can designate any qualified SGO for your contribution.
When can I make a qualifying contribution?
The program begins on January 1, 2027. Contributions made on or after this date will qualify for the federal income tax credit.
Is the Foundation an approved SGO?
Yes. The Catholic Education Foundation is an approved SGO.
Can I designate my contribution to a particular school or student?
Contributions cannot be designated for a particular student. Additional guidance regarding contributions, scholarship administration and designations will be provided as the Foundation finalizes its policies and procedures in accordance with federal and state requirements.
How do I make my contribution?
The Foundation is developing a simple process for accepting and documenting qualifying contributions beginning January 1, 2027. More information will be available prior to the launch of the program.
FOR PROFESSIONAL ADVISORS
A Resource for Tax & Financial Professionals
Help your clients understand the Federal Scholarship Tax Credit. Download our fact sheet for key program details, eligibility considerations and planning information.
Stay Up to Date
Stay informed
The Federal Scholarship Tax Credit Program is new, and
additional regulatory guidance is expected before its
January 1, 2027 launch.
Check with us often for updates on:
How to Give • Student Eligibility • Scholarship Opportunities
Check with us often for updates on:
How to Give • Student Eligibility • Scholarship Opportunities
Coming January 1, 2027
A New Way to Give.
A New Way to Change a Life.
Together, we can create even more opportunities for
eligible students and families to experience the
life-changing gift of Catholic education.
Have questions? Contact the Catholic Education
Foundation of Louisville.
Remember, for all our young Catholic school students
and their families, “The Answer is Yes!"
The information provided on this page is for general informational purposes only and should not be considered tax or legal advice. Taxpayers should consult their tax advisor regarding their individual circumstances and eligibility for the Federal Scholarship Tax Credit.