A Tax-Credit Scholarship Can Pay Your Kid's Tutor Starting in 2027. Apply the First Year, Because Year Two Goes to Repeat Winners.

If your kid is in kindergarten through 12th grade and you live in one of the 30 states that signed up, a new pot of scholarship money opens in 2027. It can pay for a tutor, a laptop, special-needs services or private-school tuition. Your kid doesn’t have to leave public school to use it, as long as a scholarship group in your state funds what you need.

And the income line is high. Treasury says about 96% of kids in the participating states would qualify.

Here’s the catch. The line has an order, and it’s written into the law. Kids who win a scholarship one year get priority the next, then their brothers and sisters. Sit out year one and you’re standing behind them.

What Washington just did

Last year’s tax law created a federal credit for people who donate to nonprofit Scholarship Granting Organizations, or SGOs. On October 1, Treasury and the IRS put out the proposed rules. Donors get up to $1,700 off their federal tax bill, or $3,400 for a married couple. The SGOs turn that money into scholarships for students in their own state.

The IRS lists what scholarships can cover: “private-school tuition, academic tutoring, special-needs services, books, supplies, computers and other equipment.” The rules also stop states from picking which of those an SGO may fund. An SGO that only pays for tutoring for public school kids is an example the rule itself uses.

Translation: this isn’t only a private-school voucher. It’s tutoring money too.

Who clears the income test

The cap is 300% of area median gross income, measured on your household’s income for the calendar year before you apply. HUD puts the U.S. median family income for a family of four at $107,900 this fiscal year. Three times that is $323,700. Your area’s number will be different, and the IRS will publish the real limits by area and family size. But that’s the scale. This isn’t a poverty program.

The IRS also chose to count cash only. The “imputed return on home equity” is out. Child support and alimony you receive are in.

What it’s worth

Treasury’s own cost analysis plugs in $12,000 per child as an illustrative average scholarship. That’s a placeholder for the math, not a promise, and every dollar depends on donors actually giving. Still, it’s real money for a family that never once thought of itself as a scholarship family.

Verdict: if your state is in, apply the first year applications open. “Maybe next year” is how you end up at the back of a line built to reward whoever showed up first.

If your state is out, your kid can’t get these scholarships. California, New York, Illinois and Pennsylvania are among the 20 states that haven’t joined.

Do this now

Check the IRS Federal Scholarship Tax Credit page for your state.

Start a 2026 folder: tax return, W-2s, pay stubs, child support records. For a 2027 application, 2026 is the year that gets measured.

If anyone in your house gets SNAP, WIC, TANF, SSI or Section 8, save the award letter. One dated within the last 12 months lets an SGO skip the full income check.

Then watch for your state’s SGO list. A donation only earns the credit if the SGO is on it, so that list is where the money will be. Call the groups that fund what your kid needs and ask when applications open.

The fine print

These are proposed rules. Comments are due December 1 and a hearing is set for December 15, but families, SGOs and states can rely on them for contributions starting January 1, 2027. The full list of qualifying expenses is coming in separate guidance the IRS calls “a high priority.” An SGO can also set a lower income cap than the federal one, so 300% is the ceiling, not a guarantee.

For the rest of the school money picture, start at our education hub and compare options on our best picks for education.

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