One Big Beautiful Bill Act, Section 70411: Tax Credit for Contributions of Individuals to Scholarship Granting Organizations

Public Law 119-21, sec. 70411 (139 Stat. 72) | Congress | Enacted July 4, 2025

Section 70411 of the One Big Beautiful Bill Act (Public Law 119-21), signed July 4, 2025, added two provisions to the Internal Revenue Code. Subsection (a) creates Section 25F, a nonrefundable federal income tax credit for an individual's cash contributions to a qualified scholarship granting organization, capped so the credit "shall not exceed $1,700" per return, with any unused amount carried forward up to five years. Subsection (b) adds Section 139K, which excludes the scholarships from the recipient's gross income, and subsection (c) sets the effective date, applying the credit to tax years ending after December 31, 2026.

Why this matters: For schools and donors, this is the underlying federal statute that establishes the credit, its "$1,700 per return" cap, and the date it takes effect for tax years ending after December 31, 2026.