North Carolina Taxpayers Eligible for New Federal Education Freedom Tax Credit in 2027
More than 3.7 million taxpayers in North Carolina are projected to be eligible for the new federal Education Freedom Tax Credit, set to launch on January 1, 2027. This credit, established by Congress in the 2025 budget reconciliation law, the One Big Beautiful Bill Act, allows individual taxpayers to claim a nonrefundable federal income tax credit of up to $1,700 for qualifying cash contributions to Scholarship Granting Organizations (SGOs). These SGOs then use the donations to provide scholarships for K-12 education expenses, including private school tuition, tutoring, and special education services. North Carolina opted into this program in June by overriding Governor Josh Stein’s veto of House Bill 87, making it one of 31 participating states. A report by AFC Growth Fund senior fellow Patrick Graff estimates that if every eligible North Carolinian donated the maximum, the state's total giving capacity under this credit could reach $5.7 billion. Nationally, Graff estimates 121.5 million filers, or 74.2% ...