Federal Tax Credit Program – Starting January 1, 2027

Empowering Schools. Expanding Opportunity.

Partner with a trusted Scholarship Granting Organization supporting the Federal Tax Credit Scholarship Program.

Partner With Us

How the Federal Tax Credit Scholarship Program Works

    The Federal Tax Credit Scholarship Program allows individuals and businesses to receive a federal tax credit when they contribute to approved SGOs. These contributions directly fund scholarships for eligible students. State’s need to opt in to the program to participate. Final regulations are being developed by the US Treasury and are expected to be released in September 2026; those rules will establish the official process for states to opt in. We will update the information on this page when the rules come out. For now, this is how we expect it to work:

    How it works: STARTING January 1, 2027

    1. Donors contribute to your school through our SGO and receive a 100% federal tax credit up to $1,700.
    2. Funds are allocated to participating schools based on donor intent, the school’s financial aid parameters, and program guidelines.
    3. Schools award scholarships to eligible students, expanding access and opportunity.

    Eligibility

    We believe every student deserves access to an educational environment where they can thrive. Our Scholarship Granting Organization (SGO) exists to expand opportunity by connecting generous donors with schools and families seeking financial support.  Student eligibility is determined by the county in which they reside. Any student living in a household that makes less than 300% of the local area median income (determined by HUD)  may qualify to receive funds for K-12 private school tuition and education expenses. The data shown here shows the income levels for 2026. 

    School Participation

    We guide schools and donors through every step to ensure a smooth, compliant process. For more information, you can download our Federal Participating School Guide. This is a draft of the guide, for use by schools located outside of Indiana, that is subject to change once final regulations come out in September, 2026. 

    We have partnered with schools across Indiana for the last 15 years to help them grow scholarship funding, strengthen donor engagement, and streamline administrative processes.

    Schools choose us because we make participation simple, efficient, and impactful.

    • Zero-cost participation: Administrative fees are taken from donations, not from schools. You can participate without adding strain to your budget.
    • All-in-one school portal access to real-time dashboards, donation information, student applications, and reporting tools — all in one secure, easy-to-use platform.
    • Responsive, personal support: Our team is known for fast answers, clear guidance, and hands-on help whenever you need it.
    • Flexible partnership model: We adapt to your school’s structure, communication style, and fundraising goals.
    • Fundraising training & collateral: Schools receive ready-to-use materials, donor messaging templates, and coaching to help launch or strengthen fundraising efforts.
    • Compliance handled for you: We manage the administrative and regulatory requirements so you can focus on serving students.

    What Partner Schools Say

    Real Impact. Real Experience.

    “Sagamore gives us clear, succinct guidance that we can trust to efficiently manage this ever changing program. We are fans, for sure!”

                 – School Administrator

    Let’s Expand Opportunity Together – Connect with our team to explore partnership options.  scholarships@sagamoreinstitute.org or 317-472-2052

    FAQ’s

    Q: Can I claim the federal gift as a charitable deduction if I itemise?

    No. A donation made through the Federal Program only receives the credit; you can not claim it as a deduction.

    Q: Can a married couple filing jointly claim the federal tax credit for a gift of $3,400?

    This is unclear. The law passed in July 2025 (ECCA) states that there is a maximum credit of $1,700. It doesn’t differentiate based on filing status. We are expecting this to be clarified in the regulations that are forthcoming from the Treasury Department.

    Q: Can a resident of a state that did not opt in to the federal program, give to a student attending a school in a state that did opt in to the program and receive the federal credit?

    This is unclear. The ECCA did not address this potential issue. We will need to wait till the final regulations are established to guide us on this.

    Q: When will the Treasury Department release the regulations?

    We expect the regulations to come out during the month of September 2026. We will update the information on this page once they are available. 

    Q: Can I claim both the state tax credit and a federal tax credit on a single gift made?

    The Indiana State Tax Credit Program and the Federal Scholarship Tax Credit Program (FSTCP) operate independently. Donors may contribute to both programs, provided the contributions are made as separate gifts. A single gift cannot be applied to both credits.

    Q: Do I have to owe taxes at filing time to use the credit?

    No. Getting a refund does not disqualify you. Eligibility is based on whether you have federal tax liability, not whether you owe money on April 15. Federal tax liability is the amount of federal income tax you’re responsible for in a year. Most people pay toward this through paycheck withholding or quarterly estimated payments. A refund simply means you paid more than your final liability. If you have liability, you qualify—and the credit may increase your refund. Your W-2 withholding stays the same, and because of that many donors may see a larger refund when they file.