HR833119th CongressWALLET

Educational Choice for Children Act of 2025

Sponsored By: Representative Smith (NE)

Introduced

Summary

Federal tax credits for donations to scholarship organizations would create matching tax incentives for individuals and corporations to fund K–12 scholarships. The bill targets households up to 300% of area median income, sets a $10 billion annual volume cap, and would exclude those scholarship amounts from gross income.

Bill Overview

Analyzed Economic Effects

6 provisions identified: 5 benefits, 0 costs, 1 mixed.

K-12 scholarships would not be taxed

If your child received a scholarship from an approved group for K–12 costs, that money would not count as taxable income. This would lower your federal taxes by about the scholarship amount times your tax rate. The rule would apply to amounts received after December 31, 2025.

Tax credit for individual education donations

You would be able to claim a new nonrefundable federal tax credit for money you give to approved scholarship groups. The credit would match your gift, up to the greater of 10% of your AGI or $5,000, and up to your assigned share of a national cap. It would be reduced by any state credit you claimed for the same gift, and you could not also take a charitable deduction for those dollars. Unused credit could carry forward up to five years. Gifts must be cash or marketable securities, and scholarships would fund K–12 expenses like tuition, materials, tutoring, tests, dual enrollment, and therapies. The credit would apply for tax years ending after December 31, 2025.

Corporate tax credit for education donations

Corporations would be able to claim a federal tax credit for donations to approved scholarship groups. The credit would equal donations, up to the smaller of the corporation’s allocated cap and 5% of its taxable income. Corporations could not also deduct the same expenses. The credit would start for tax years ending after December 31, 2025.

Rules for scholarship groups and spending

Scholarship groups would need to be 501(c)(3) charities, keep donations in separate accounts, and give scholarships to at least two students. Awards could cover only K–12 expenses, with income checks so families are at or below 300% of area median; prior recipients and siblings would get priority, and no gifts could be earmarked for a specific child. Groups would need yearly independent audits, have no felons on the board, and avoid self‑dealing. They would generally have to distribute nearly all receipts by the start of the third tax year, with a 10% admin safe harbor and up to 15% carryover. If a group failed these rules, new gifts to it the next year would not earn the federal credit.

Protects scholarship groups and school choice

Government would not be allowed to run or control scholarship groups or private and religious schools under this program. Officials could not exclude or penalize schools because they are religious, or discourage families from using scholarships at private or nonprofit schools. Parents of students who got scholarships would be able to intervene in court cases that challenge the law. These protections would take effect upon enactment.

Annual cap on credit-eligible donations

Total donations that can earn the federal credits would be capped at $10 billion a year starting in 2026. Ten percent would be split evenly across all states (and D.C.) for their residents and in‑state corporations. The rest would be allocated first‑come, first‑served based on when gifts are made, with no allocations after December 31. If 90% or more is used in a year, the next year’s cap would rise by 5%, and the cap could not drop below the prior year. Treasury would track usage in real time and publish the cap.

Sponsors & CoSponsors

Sponsor

Smith (NE)

NE • R

Cosponsors

  • Owens

    UT • R

    Sponsored 1/31/2025

  • Walberg

    MI • R

    Sponsored 1/31/2025

  • Kelly (PA)

    PA • R

    Sponsored 1/31/2025

  • Yakym

    IN • R

    Sponsored 1/31/2025

  • LaHood

    IL • R

    Sponsored 1/31/2025

  • Letlow

    LA • R

    Sponsored 1/31/2025

  • Miller-Meeks

    IA • R

    Sponsored 1/31/2025

  • Donalds

    FL • R

    Sponsored 1/31/2025

  • Tenney

    NY • R

    Sponsored 1/31/2025

  • Moore (UT)

    UT • R

    Sponsored 1/31/2025

  • Feenstra

    IA • R

    Sponsored 1/31/2025

  • Malliotakis

    NY • R

    Sponsored 1/31/2025

  • Hern (OK)

    OK • R

    Sponsored 1/31/2025

  • Lawler

    NY • R

    Sponsored 1/31/2025

  • Fong

    CA • R

    Sponsored 1/31/2025

  • Carey

    OH • R

    Sponsored 1/31/2025

  • Hudson

    NC • R

    Sponsored 1/31/2025

  • Salazar

    FL • R

    Sponsored 1/31/2025

  • Franklin, Scott

    FL • R

    Sponsored 1/31/2025

  • Crenshaw

    TX • R

    Sponsored 1/31/2025

  • Wilson (SC)

    SC • R

    Sponsored 1/31/2025

  • Rose

    TN • R

    Sponsored 1/31/2025

  • Weber (TX)

    TX • R

    Sponsored 1/31/2025

  • Ciscomani

    AZ • R

    Sponsored 1/31/2025

  • Moolenaar

    MI • R

    Sponsored 1/31/2025

  • Allen

    GA • R

    Sponsored 1/31/2025

  • Dunn (FL)

    FL • R

    Sponsored 1/31/2025

  • Murphy

    NC • R

    Sponsored 1/31/2025

  • Cline

    VA • R

    Sponsored 1/31/2025

  • Meuser

    PA • R

    Sponsored 1/31/2025

  • Timmons

    SC • R

    Sponsored 1/31/2025

  • Bergman

    MI • R

    Sponsored 1/31/2025

  • Joyce (PA)

    PA • R

    Sponsored 2/4/2025

  • Hinson

    IA • R

    Sponsored 2/4/2025

  • Turner (OH)

    OH • R

    Sponsored 2/4/2025

  • Kustoff

    TN • R

    Sponsored 2/5/2025

  • Finstad

    MN • R

    Sponsored 2/5/2025

  • Mackenzie

    PA • R

    Sponsored 2/5/2025

  • Mann

    KS • R

    Sponsored 2/6/2025

  • James

    MI • R

    Sponsored 2/7/2025

  • Steil

    WI • R

    Sponsored 2/7/2025

  • Haridopolos

    FL • R

    Sponsored 2/10/2025

  • Stauber

    MN • R

    Sponsored 2/14/2025

  • Mace

    SC • R

    Sponsored 2/24/2025

  • Smucker

    PA • R

    Sponsored 2/24/2025

  • Huizenga

    MI • R

    Sponsored 2/25/2025

  • Baumgartner

    WA • R

    Sponsored 3/3/2025

  • Calvert

    CA • R

    Sponsored 3/3/2025

  • Rulli

    OH • R

    Sponsored 3/3/2025

  • Lee (FL)

    FL • R

    Sponsored 3/3/2025

  • Harrigan

    NC • R

    Sponsored 3/4/2025

  • Rutherford

    FL • R

    Sponsored 3/10/2025

  • Biggs (SC)

    SC • R

    Sponsored 3/10/2025

  • Messmer

    IN • R

    Sponsored 3/11/2025

  • McCormick

    GA • R

    Sponsored 3/18/2025

  • Rouzer

    NC • R

    Sponsored 3/18/2025

  • Hurd (CO)

    CO • R

    Sponsored 3/24/2025

  • Miller (IL)

    IL • R

    Sponsored 3/24/2025

  • Kim

    CA • R

    Sponsored 3/24/2025

  • Bost

    IL • R

    Sponsored 3/24/2025

  • Kiley (CA)

    CA • R

    Sponsored 3/25/2025

  • McGuire

    VA • R

    Sponsored 3/27/2025

  • Guthrie

    KY • R

    Sponsored 3/27/2025

  • Bice

    OK • R

    Sponsored 3/27/2025

  • Smith (NJ)

    NJ • R

    Sponsored 4/2/2025

  • Moore (NC)

    NC • R

    Sponsored 4/2/2025

  • Collins

    GA • R

    Sponsored 4/2/2025

  • Miller (OH)

    OH • R

    Sponsored 4/7/2025

  • Balderson

    OH • R

    Sponsored 4/7/2025

  • Stefanik

    NY • R

    Sponsored 4/7/2025

  • Langworthy

    NY • R

    Sponsored 4/9/2025

  • LaLota

    NY • R

    Sponsored 4/9/2025

  • Sessions

    TX • R

    Sponsored 4/9/2025

  • Barrett

    MI • R

    Sponsored 4/14/2025

  • Crank

    CO • R

    Sponsored 4/14/2025

  • Babin

    TX • R

    Sponsored 4/21/2025

  • Tiffany

    WI • R

    Sponsored 4/29/2025

  • Downing

    MT • R

    Sponsored 5/1/2025

  • Hamadeh (AZ)

    AZ • R

    Sponsored 5/6/2025

  • Moran

    TX • R

    Sponsored 5/6/2025

  • Barr

    KY • R

    Sponsored 5/6/2025

  • Burlison

    MO • R

    Sponsored 5/6/2025

  • Jordan

    OH • R

    Sponsored 5/14/2025

  • Webster (FL)

    FL • R

    Sponsored 5/15/2025

  • Onder

    MO • R

    Sponsored 5/15/2025

  • Houchin

    IN • R

    Sponsored 5/20/2025

  • Hill (AR)

    AR • R

    Sponsored 5/20/2025

  • Buchanan

    FL • R

    Sponsored 6/13/2025

  • Palmer

    AL • R

    Sponsored 7/2/2025

  • Wagner

    MO • R

    Sponsored 10/24/2025

  • Evans (CO)

    CO • R

    Sponsored 11/17/2025

Roll Call Votes

No roll call votes available for this bill.

View on Congress.gov

Related Bills

Back to Legislation

Take It Personal

Get Your Personalized Policy View

Create a free account to save research, track policy impacts, and unlock your personalized versions of these pages.

Already have an account? Sign in