Notice 2025-70: Request for Comments on Individual Tax Credit for Qualified Contributions to Scholarship Granting Organizations

IRS Notice 2025-70 | IRS | Issued Nov. 25, 2025; published in IRB 2025-50 (Dec. 8, 2025)

IRS Notice 2025-70 is the first IRS guidance interpreting new Internal Revenue Code Section 25F, the Federal Scholarship Tax Credit added by Section 70411 of the One, Big, Beautiful Bill Act (Public Law 119-21). It requests public comments while previewing how forthcoming proposed regulations will treat Scholarship Granting Organization (SGO) requirements: an SGO must be described in Section 501(c)(3), exempt under 501(a), and not a private foundation; keep qualified contributions in one or more separate accounts to prevent co-mingling; serve 10 or more students who do not all attend the same school; and spend not less than 90 percent of the organization's income on scholarships for eligible students. The notice states the credit may not exceed $1,700 per return, carries forward up to five years on a first-in, first-out basis, and reads the 90 percent test against all of the organization's income, including unrelated business income, not just the donations held in the separate account.

Why this matters: For schools and donors, the notice is the earliest official signal of how the IRS intends to define which organizations can receive credit-eligible contributions and how the 90 percent income test will be measured before proposed regulations are published.