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119-s-1813119th CongressWALLET

High-Quality Charter Schools Act

Sponsored By: Senator Scott, Tim [R-SC]

In Committee

Summary

Creates a new federal tax credit to encourage donations that fund the creation and expansion of high‑quality charter schools. It would steer private giving to eligible nonprofit charter organizations and set rules for who qualifies and how much credit can be claimed.

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  • Families and students: Would increase targeted funding for building or expanding charter school capacity, aiming to support more high‑quality charter options in communities served by eligible organizations.
  • Individual donors and taxpayers: Would get a nonrefundable tax credit equal to 75% of qualified cash or marketable‑securities donations, with a per‑taxpayer cap that uses income‑based limits or a dollar cap and a rule denying a separate charitable deduction for the same gift.
  • Charter organizations and states: Limits eligibility to certain 501(c)(3) charter management organizations or schools that meet performance or federal‑grant criteria and audit rules. Annual volume of credits would be capped at $5 billion starting in 2026, with state allocations and a real‑time tracker for claims.

Sec. 6 would apply the changes to taxable years beginning after December 31, 2025.

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 1 benefits, 0 costs, 1 mixed.

Tax credit for charter school donations

If enacted, this bill would create a new individual tax credit equal to 75% of donations to eligible charter school groups. The yearly credit for each taxpayer would be limited to the greater of 10% of your adjusted gross income or $5,000. There would be a $5 billion national cap each year, with $10 million set aside for each State and the rest allocated nationally. Credits would be awarded first-come, first-served by donation date and tracked in real time by Treasury. You could carry unused credit forward up to five years, used FIFO. Donors could not also take a charitable deduction for the same gift. Eligible recipient groups must be 501(c)(3) nonprofits (not private foundations), meet audit and accounting rules, and either have certain federal replication/expansion grants or be picked by a State as top-performing. Organizations must spend most contributions on charter creation/expansion by the start of the fifth year after receipt, may keep up to 10% for admin as a safe harbor, and may elect to carry up to 15% to the next year. If an organization fails spending rules, the Secretary can disqualify future gifts from qualifying for the credit. These rules would apply to taxable years beginning after December 31, 2025, and the annual volume cap would apply for years beginning in 2026 and after.

Charter organizations keep independence

If enacted, the bill would say eligible charter school organizations are not acting on behalf of government just by taking part. It would direct that, where allowed by law, these groups have maximum freedom to meet students' needs without government control. This rule would take effect on enactment.

Sponsors & CoSponsors

Sponsor

Scott, Tim [R-SC]

SC • R

Cosponsors

  • Sen. Cassidy, Bill [R-LA]

    LA • R

    Sponsored 6/4/2025

  • Sen. Tuberville, Tommy [R-AL]

    AL • R

    Sponsored 4/13/2026

  • Sen. Scott, Rick [R-FL]

    FL • R

    Sponsored 4/28/2026

Roll Call Votes

No roll call votes available for this bill.

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