Educational Choice for Children Act of 2025
Sponsored By: Senator Bill Cassidy
Introduced
Summary
Creates coordinated individual and corporate tax credits for donations to scholarship granting organizations to fund K–12 scholarships, while protecting parental choice and setting accountability rules. This bill would set up matching individual and corporate credits tied to qualified donations, define eligible students and expenses, and require oversight for scholarship organizations.
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Bill Overview
Analyzed Economic Effects
6 provisions identified: 5 benefits, 0 costs, 1 mixed.
Individual tax credit for SGO donations
If enacted, you would be able to claim a federal nonrefundable tax credit for money you give to a certified scholarship organization. The credit would be limited by your allocated share of the national cap and by your contributions. The credit could not be more than the greater of 10% of your adjusted gross income or $5,000. The credit is reduced by any State credit for the same gift and you could carry unused credit forward up to five years. You could not also take a federal charitable deduction for the same gift.
SGO scholarships excluded from income
If enacted, scholarship money a dependent gets from a certified SGO for qualified K-12 expenses would not count as the dependent's taxable income. This exclusion would apply to amounts received after December 31, 2025. The rule uses the bill's definitions of eligible students and qualified education expenses.
Corporate tax credit for SGO donations
If enacted, corporations would be able to claim a federal tax credit for money they give to certified scholarship organizations. That credit would be limited to 5% of the corporation's taxable income and by the company's share of the national cap. Corporations could not also deduct the same expenses for which they take the credit. The rule would apply to taxable years ending after December 31, 2025.
Nationwide cap on SGO tax credits
If enacted, there would be a national volume cap of $10 billion for calendar year 2026 and each later year on credits for SGO donations. Ten percent of each year's cap would be split evenly among States. The Treasury would allocate credits first-come, first-served and run a real-time public tracking system. If a year uses at least 90% of the cap, next year's cap would rise to 105% of that high-use year and caps may not fall.
Rules and audits for scholarship organizations
If enacted, scholarship organizations would have to meet strict rules. An SGO would need 501(c)(3) status, separate accounts, annual independent audits, and household income checks. SGOs must meet a distribution rule, generally paying out most receipts as scholarships, with a safe harbor letting them spend up to 10% on administration and carry up to 15% to the next year. If an SGO fails rules, donations to it could lose credit eligibility for a time.
Protections for private and religious schools
If enacted, the bill would bar governments from treating SGOs as government agents or from forcing or controlling private or religious schools that accept SGO scholarships. Governments could not exclude or disadvantage schools because of religion. Parents of scholarship students could intervene in court to defend program provisions.
Sponsors & CoSponsors
Sponsor
Bill Cassidy
LA • R
Cosponsors
Tim Scott
SC • R
Sponsored 1/29/2025
John Cornyn
TX • R
Sponsored 1/29/2025
Steve Daines
MT • R
Sponsored 1/29/2025
John Thune
SD • R
Sponsored 1/29/2025
Cindy Hyde-Smith
MS • R
Sponsored 1/29/2025
Eric Schmitt
MO • R
Sponsored 1/29/2025
Tim Sheehy
MT • R
Sponsored 1/29/2025
Ted Budd
NC • R
Sponsored 1/29/2025
Tom Cotton
AR • R
Sponsored 1/29/2025
John Kennedy
LA • R
Sponsored 1/29/2025
Tommy Tuberville
AL • R
Sponsored 1/29/2025
James Justice
WV • R
Sponsored 1/29/2025
James Risch
ID • R
Sponsored 1/29/2025
John Barrasso
WY • R
Sponsored 1/29/2025
Thomas Tillis
NC • R
Sponsored 1/29/2025
Roger Marshall
KS • R
Sponsored 1/29/2025
Todd Young
IN • R
Sponsored 1/29/2025
Josh Hawley
MO • R
Sponsored 1/29/2025
Katie Britt
AL • R
Sponsored 1/29/2025
Marsha Blackburn
TN • R
Sponsored 1/29/2025
David McCormick
PA • R
Sponsored 1/29/2025
Kevin Cramer
ND • R
Sponsored 1/29/2025
Roger Wicker
MS • R
Sponsored 1/29/2025
Cynthia Lummis
WY • R
Sponsored 1/29/2025
Pete Ricketts
NE • R
Sponsored 1/29/2025
Jon Husted
OH • R
Sponsored 1/29/2025
Bill Hagerty
TN • R
Sponsored 1/30/2025
Shelley Capito
WV • R
Sponsored 2/3/2025
Jim Banks
IN • R
Sponsored 2/11/2025
Bernie Moreno
OH • R
Sponsored 2/25/2025
John Boozman
AR • R
Sponsored 2/27/2025
Lindsey Graham
SC • R
Sponsored 3/3/2025
Ashley Moody
FL • R
Sponsored 4/8/2025
Roll Call Votes
No roll call votes available for this bill.
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