Federal Scholarship Tax Credit
In 2027, an additional opportunity to support CSFP’s work through directed tax giving will be available. The Federal Education Tax Credit will allow donors to help more Philadelphia children have access to safe, quality tuition-based education.
A New Way to Give
Starting January 1, 2027, the Federal Scholarship Tax Credit program will offer taxpayers the opportunity to receive a dollar-for-dollar federal tax credit of up to $1,700 for contributions to approved Scholarship Granting Organizations (SGOs). By participating, you can provide access to quality education and scholarships for Philadelphia students most in need while receiving a direct benefit on your federal taxes. CSFP intends to apply for SGO status.
Be among the first to access the 2027 tax credit program. Sign up below for updates.
Additional Program Details
Starting in 2027 and continuing annually, you could supercharge your support of education by directing up to $1,700 to a qualified scholarship organization in exchange for a 100% dollar for dollar credit on your federal income taxes. For example, a taxpayer who owes $10,000 in federal taxes in 2027 could make a $1,700 gift to CSFP during that year and reduce their federal tax liability to $8,300 for 2027. That gift will be applied to CSFP’s scholarship program, providing tuition support for thousands of K-8th graders in Philadelphia to attend any of 150+ partner schools in the area.
CSFP plans to apply to be an approved scholarship organization who can administer funds raised through this program.
How does the tax credit work?
The new tax credit will take effect in 2027. The maximum tax credit amount for each return filed is $1,700 per year. Please note that this includes joint filers. The U.S. Treasury Department will oversee the federal tax credits.
More information becomes available regularly. CSFP will share information as we receive it.
What is the difference between a tax credit and a charitable deduction?
A tax credit directly reduces your tax bill dollar-for-dollar, while a charitable deduction reduces the amount of income subject to taxation. Credits are generally more valuable, providing full relief, whereas deductions depend on your tax bracket and often require itemizing to claim.
What is needed?
States must opt-in. Individual states must opt-in to this program and provide a list to the U.S. Treasury Department of qualified scholarship granting organizations (SGOs). Details about the opt-in process and the approval process for eligible SGOs will be provided by the Treasury Department in their forthcoming regulations, expected to be released in Summer 2026. Pennsylvania has not yet opted in to this program.
The difference between the
Federal Tax Credit and a Charitable Gift
Federal Tax Credit for Education | Federal Tax Credit for Charitable Donation | |
|---|---|---|
Calculated From | Taxes Owed | Taxable Income |
What it Does | Reduce the Tax Owed | Reduces taxable income before tax is calculated |
Where it Applies | Applied after tax liability is calculated | Applied before tax liability is calculated (to income) |
Dollar Impact | $1 of credit = $1 less tax owed | $1 of deduction saves $0.10–$0.37 depending on tax bracket |
Relative Value | Up to $1,700 dollar-for-dollar credit against taxes owed | Value depends on the taxpayer’s marginal tax rate |
Refund Potential | Nonrefundable on its own | Nonrefundable on its own |
Eligibility | All filers | Based on expenses or filing status (charity, mortgage interest, SALT, etc.) |
Example | $1,700 credit reduces tax from $10,000 → $8,300 owed | $1,700 deduction at 25% bracket reduces tax by $425 |
Best Used When | The goal is maximum tax reduction certainty | The goal is to lower taxable income |
Sign up for Tax Credit Updates
For 25 years, CSFP has transformed Pennsylvania tax liability into life-changing scholarships for more than 30,000 Kindergarten-8th graders in Philadelphia. You can join us to make an impact on students.
Sign up now so you can stay informed about the Federal Education Tax Credit for 2027.
