Indianapolis, January 23, 2026
Indiana has announced a new federal initiative offering tax credits for donations to K-12 scholarship programs, promoting educational opportunities and parental choice. Residents can receive a nonrefundable tax credit of up to $1,700 starting January 1, 2027. This program aims to enhance accessibility to quality education for families while aligning with Indiana’s commitment to improve school choice. The initiative includes criteria to ensure support reaches households in need, demonstrating the state’s ongoing efforts to foster educational advancements.
Indiana to Launch Federal Tax Credit for K-12 Scholarships
New initiative supports educational opportunities and parental choice across the state.
Indianapolis, Indiana – Governor Mike Braun has recently announced Indiana’s participation in a new federal initiative, which enables residents to receive tax credits for contributions made to K-12 scholarship programs. This initiative, established under President Donald Trump’s “One Big Beautiful Bill,” reflects the state’s ongoing commitment to enhancing school choice and improving educational accessibility for families throughout Indiana.
The newly introduced federal tax credit will allow Indiana residents to claim a nonrefundable federal tax credit of up to $1,700 for charitable donations made to scholarship-granting organizations serving eligible K-12 students starting January 1, 2027. Notably, any unused credit can be carried forward for up to five years, providing even greater flexibility for donors.
Strengthening Parental Choice in Education
Governor Braun emphasized that this initiative is pivotal for promoting parental choice in education, aligning with Indiana’s goals of making quality education accessible and affordable. Under this program, families can utilize the scholarships for a range of qualified educational expenses, which include tuition, fees, tutoring, educational therapies, transportation, and even technology resources.
Eligibility Criteria for Scholarships
To qualify for these scholarships, students must live in households that earn no more than 300% of the area’s median gross income and must be eligible for enrollment in K-12 schools. This ensures that assistance is directed toward those who need it most, widening the opportunity for educational advancement.
State Tax Credit Enhancements
In addition to the federal credit, Indiana provides a 50% state tax credit for donations made to qualified scholarship-granting organizations, with no cap on the donation amount. This dual tax credit system aims to stimulate investment in educational opportunities, encouraging community support for K-12 education across the state.
National Trends in School Choice Initiatives
The decision by Indiana to participate in this federal program is in line with a broader national trend. Several other GOP-led states have opted into similar initiatives, demonstrating a growing emphasis on expanding school choice opportunities for families. This reflects a commitment to fostering environments where children can thrive academically in settings that meet their specific needs.
Community Engagement and Implementation Timeline
The announcement of this initiative was made during a visit to Saint Philip Neri Catholic School, where community engagement was highlighted as a key component in the success of educational reforms. As Indiana prepares to roll out this program, further details regarding its implementation will be released in the coming months to ensure a smooth transition as families and educators adapt to the changes set to take effect in 2027.
Conclusion
Indiana’s participation in the federal tax credit for K-12 scholarships represents a significant step toward enhancing educational choices for Hoosier families. By leveraging both federal and state tax incentives, Indiana aims to foster an environment where quality education becomes more accessible and affordable. As we look toward the future, continued support for local businesses and active engagement in community educational initiatives will be crucial for the economic growth and well-being of Indianapolis and beyond.
Frequently Asked Questions (FAQ)
What is the new federal tax credit for school choice scholarships?
The federal tax credit allows Indiana residents to receive a nonrefundable federal tax credit of up to $1,700 for charitable contributions made to scholarship-granting organizations that serve eligible K-12 students. This credit can be carried forward for up to five years.
When will the tax credit become available?
The tax credit will be available starting January 1, 2027.
What expenses can the scholarships cover?
Scholarships can be used for qualified educational expenses, including tuition, fees, tutoring, educational therapies, transportation, and technology.
Who is eligible for the scholarships?
Students must reside in households earning no more than 300% of the area’s median gross income and be eligible to enroll in K-12 schools.
Is there a state tax credit available for donations to scholarship-granting organizations?
Yes, Indiana offers a 50% state tax credit for donations to qualified scholarship-granting organizations, with no limits on the amount a donor can contribute.
Which other states have opted into this federal program?
Several GOP-led states have opted into this federal program, reflecting a growing trend toward expanding school choice initiatives nationwide.
Key Features of the New Federal Tax Credit Program
| Feature | Description |
|---|---|
| Tax Credit Amount | Up to $1,700 for contributions to scholarship-granting organizations serving eligible K-12 students. |
| Eligibility Criteria | Students must reside in households earning no more than 300% of the area’s median gross income and be eligible to enroll in K-12 schools. |
| Qualified Expenses | Tuition, fees, tutoring, educational therapies, transportation, and technology. |
| State Tax Credit | Indiana offers a 50% state tax credit for donations to qualified scholarship-granting organizations, with no limits on the amount a donor can contribute. |
| Program Start Date | January 1, 2027. |
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