This page reflects the most current available guidance. The U.S. Department of the Treasury is expected to publish proposed program regulations in fall 2026. Please continue to check this page for updated information.
Last Updated: July 14, 2026
What is the Education Freedom Tax Credit
The Education Freedom Tax Credit (EFTC) is a new federal law that creates a nationwide tax credit scholarship program for K-12 education. It is also known as the Educational Choice for Children Act (ECCA), the Federal Scholarship Tax Credit (FSTC), or Section 25F in the tax code.
On December 17, 2025, Governor Jeff Landry announced that Louisiana will participate in the program.
Here's how it works:
- An individual donates to a Scholarship Granting Organization (SGO)
- The SGO uses that money to fund scholarships for eligible K-12 students
- In return, the individual donor receives a federal tax credit
Scholarships fund qualified expenses for K-12 students in households at or below 300% of area median income, covering roughly 90% of students nationwide. The program begins January 1, 2027.
For more detail, see the Education Freedom Tax Credit Fact Sheet from the U.S. Department of the Treasury and U.S. Department of Education.
Unlike many state programs, the EFTC operates through federal tax law. The U.S. Department of the Treasury sets most of the program's rules.
Families and Students
Application information for families and students will be available at a later date. Several key details, such as which organizations will serve as SGOs in Louisiana and how the application process will work, depend on rules the U.S. Department of the Treasury is expected to publish in fall 2026.
What families can do now:
No action is required of families at this point. The most helpful thing interested families can do is to regularly check this page. We will include updated information as soon as it is available.
Scholarship Granting Organizations
A Scholarship Granting Organization (SGO) is the organization that collects donations from donors and turns them into scholarships for students. An SGO is not a school, and it's not the state or federal government. It is a 501(c)(3) nonprofit that awards scholarships to eligible K-12 students.
To qualify as an SGO, an organization must:
Status and eligibility
- Be included on the list Louisiana submits to the Secretary of the Treasury for the applicable year
- Be a 501(c)(3) organization exempt from tax under section 501(a)
- Not be a private foundation
- Serve 10 or more students attending more than one school
Financial requirements
- Spend at least 90% of income from qualified contributions on student scholarships
- Keep qualified contributions in one or more separate accounts, apart from other funds
- Provide scholarships only for qualified elementary or secondary education expenses
- Not earmark contributions for any particular student
Priority for awarding scholarships
- Students awarded a scholarship the previous school year, then
- Eligible siblings of students who previously received a scholarship from the organization
Verifying student eligibility
- Confirm each student's household income and family size against the 300% Area Median Income (AMI) threshold, calculated annually by the U.S. Department of Housing and Urban Development (search the latest data by area)
Donors
A donor is any individual who contributes to an SGO in exchange for a federal tax credit. Donations fund the scholarships SGOs award to eligible students.
What donors should know:
Tax credit
- Receive a dollar-for-dollar federal tax credit of up to $1,700 per year for qualified contributions
- Unused credit can be carried forward for up to 5 years
- Cannot claim both a federal tax credit and a federal charitable deduction for the same gift
Who can contribute
- Any individual can donate, regardless of whether their own state has opted into the EFTC
- Contributions must go to an SGO on Louisiana's official list to qualify for the credit