President Donald Trump’s new federal education tax credit, written in 2025, has only temporary rules, even as the application deadline approaches. The delay could lead to taxpayers missing out.
With approximately one month left before applications close, interested organizations such as Oklahoma Public School Resource Center are still waiting on exact guidance from the U.S. Department of the Treasury. If they don’t apply by the Dec. 15 deadline, their contributors will be ineligible for the tax benefit.
“It’s still a little bit up in the air on how it will work and what will be offered,” the center’s executive director, April Grace, said.
How it works
Much like the state’s Equal Opportunity Education Scholarship program, the new tax credit works like this: taxpayers receive a tax credit up to $1,700 if they donate to a qualifying organization. The organizations distribute the money to students for private school tuition and other expenses.
Oklahoma taxpayers' contributions have historically skewed toward private schools.
Under the state program, donations to private schools outnumbered those to public schools 4 to 1, Oklahoma Watch reported in September. In 2023 and 2024, the Oklahoma Tax Commission awarded $4.7 million in tax credits for donations supporting private schools and $1.2 million for public school support through the program. There’s $25 million available annually for each.
Despite the historical benefit to private schools, Grace is optimistic that the new federal credit will be another tool for public schools.
“This is for people who are focused on supporting public schools,” Grace said. “I don’t think this tips things one way or another.”
Taxpayers who donated to the Oklahoma tax credit scholarship fund received a 50% or 75% credit to their state income tax. Oklahomans can donate up to $1,000 when filing singularly or $2,000 jointly.
Similarly, the federal program has options for single filers, $1,700, and married couples, $3,400. These donations are matched dollar for dollar.
U.S. residents and citizens can participate in the new federal tax program. Unlike the state’s program, businesses cannot participate.
Donations must be made separately because scholarship granting organizations must ensure contributions for the state and federal programs are not mixed, Haxton said. Internal Revenue Service guidelines say that the state tax credit must be applied first. If the total donation amount doesn’t maximize both credits, the state credit takes priority.
Scholarship-granting organizations distribute the donated scholarship funds to eligible families, who can use them for a variety of private or public educational expenses. To qualify for scholarships, students have to live in households earning no more than 300% of the area's median gross income and be eligible to enroll in K-12 schools.
The Oklahoma Tax Commission will provide a list of approved scholarship-granting organizations to the U.S. Department of the Treasury by Feb. 15 that taxpayers can choose from.
What’s next
Emily Haxton, spokesperson for the Oklahoma Tax Commission, said they are not experiencing an influx of applications, but scholarship-granting organizations have until Dec. 15 to apply.
Once applications are in, the tax commission processes them and uploads them to the SGO landing page. Both state and federal participants will be listed there.
The Oklahoma Public School Resource Center and Grace are in a unique position in that they already have a framework similar to an SGO through their Catalyst program. They’re just waiting on more exact rules so they can tweak that framework to fit the federal guidelines.
The temporary guidelines provide rules on what the money can be used for, how much an SGO can take as administrative overhead and some qualifying factors, but they don’t put a cap on scholarship amount and the rules aren’t set in stone.
“Even if they do make it difficult, we’re going to find a way to help people,” Grace said.
While the application turnaround will be quick, Grace doesn’t anticipate an influx of donations from taxpayers based on her experience with their Catalyst program.
She said most contributors make the tax credit donation at year-end.
The U.S. Department of the Treasury estimated that by 2030, more than 11 million taxpayers will make qualified contributions totaling $26 billion annually to scholarship-granting organizations.
They will continue to take feedback on the temporary rules until Dec.1.
Oklahoma Watch, at oklahomawatch.org, is a nonprofit, nonpartisan news organization that covers public-policy issues facing the state.
