Preview of Forthcoming Section 25F Guidance

U.S. Treasury, Preview of Forthcoming Section 25F Guidance (June 10, 2026) | U.S. Treasury | Preview, not yet proposed regulations

On June 10, 2026, the U.S. Treasury released a preview of the regulatory framework it expects to propose for the new Section 25F Education Freedom Tax Credit, drawn from remarks a Treasury tax policy official delivered on June 9, 2026. The document describes how Treasury intends to administer the dollar-for-dollar nonrefundable credit of up to $1,700 per return for contributions to scholarship granting organizations, including a possible safe harbor for measuring whether an organization spends at least 90% of the income of the organization on scholarships for eligible K-12 students, a definition of "school" consistent with section 530, and rules for organizations operating across states. It signals that proposed (not final) regulations are expected by the end of September 2026, and that states, SGOs, and taxpayers will be able to rely on those proposed rules for tax year 2027.

Why this matters: For schools and donors, this preview is the earliest official signal of how Treasury intends to administer the Section 25F credit, including the 90% income test for scholarship granting organizations and the timeline for the rules that will govern tax year 2027.