Federal Scholarship Tax Credit: A CCLE Guide for Classical Lutheran Schools
As part of our ongoing effort to support classical Lutheran schools, the CCLE is pleased to announce a new resource to help schools prepare for the Federal Scholarship Tax Credit.
Beginning January 1, 2027, the new Federal Scholarship Tax Credit under Internal Revenue Code §25F will allow eligible taxpayers to receive a federal tax credit for qualifying contributions to Scholarship Granting Organizations (SGOs). These organizations, in turn, provide scholarships to eligible students for qualified elementary and secondary educational expenses.
For classical Lutheran schools, this new program may present an important opportunity—but understanding how to prepare for and participate in the program can be complicated.
To help, the CCLE has prepared a new manual:
This practical guide is designed specifically to help CCLE schools understand the new program and begin preparing for its January 1, 2027 launch.
The manual provides guidance on:
Steps school leaders can take now to prepare
How to identify and evaluate a qualified Scholarship Granting Organization (SGO)
Questions to ask when considering an SGO partnership
How to communicate the opportunity to school families and prospective donors
How to prepare internally for scholarship payments and related procedures
What schools should verify at the federal and state levels as implementation moves forward
Why prepare now?
Thirty states have already made advance elections to participate in the program for 2027. However, state and federal implementation is still developing, and participating states must provide the IRS with their qualifying SGO lists before contributions to those organizations can qualify for the federal credit.
For that reason, the CCLE encourages school leaders to begin learning about the program and identifying potential SGO partners now, while continuing to verify current federal and state requirements as additional guidance becomes available.
We hope this manual will give classical Lutheran schools a practical starting point for navigating this new opportunity thoughtfully and responsibly.
Please feel free to share this resource with your school board and other school leaders who will be involved in preparing for the program.
The information in this manual reflects IRS and U.S. Department of the Treasury guidance available as of September 2026 and is intended for general informational and planning purposes only. It does not constitute legal, accounting, or tax advice. Schools, SGOs, families, and donors should verify current requirements and consult qualified professional advisers when appropriate.
