Federal Tax Credit Scholarship Program: What Virginia Homeschoolers Need to Know
The Federal Tax Credit for Scholarships (FTCS), also called the Education Freedom Tax Credit, was released on October 1, 2026. Many regulations remain preliminary and may change or be clarified, but under the existing regulations, the program takes effect on January 1, 2027.
The Program Has Two Parts
A tax credit for donors
First is the federal tax credit, which allows taxpayers to donate up to $1,700 per person or $3,400 per married couple for a dollar-for-dollar reduction in their tax liability. Taxpayers can donate directly to independent nonprofit organizations called Scholarship Granting Organizations (SGOs) and claim a dollar-for-dollar federal income tax credit up to $1,700 per person or $3,400 per married couple. Taxpayers can donate to an SGO in any participating state, but SGOs can award the scholarship money to students only in that state. Interested taxpayers should contact their tax professional for more information.
Scholarships for Students
SGOs can award scholarships to public and private school students to cover private school tuition and fees, textbooks and instructional materials, tutoring, transportation costs, technology, and disability services. Students in K-12 whose family income is below 300% of the median income in their area are eligible. EdChoice provides a county-by-county income lookup. Within the federal rules, SGOs can set their own eligibility requirements, award amounts, and qualifying products and services.
Where Virginia Stands
Scholarships are available only to students in states that choose to participate. In January 2026, Virginia opted in under then-Governor Youngkin. However, participation must be renewed each year. In October 2026, Governor Spanberger said her administration is still evaluating the program.
What About Homeschoolers?
For 2027, homeschooled students are only eligible for scholarships if the state defines homeschooling as a type of private school. Virginia law §22.1-254 states, “Instruction in the home… shall not be classified or defined as a private, denominational, or parochial school.”
Some advocates have called for expanding program access to all homeschooled students in every state, regardless of how state law classifies them, and some argue that homeschoolers currently qualify (see here and here). HEAV will keep you updated if anything changes regarding homeschool access in Virginia.
Public Comments
The Treasury Department is accepting comments through December 1, 2026. Parents who want the program expanded to include Virginia homeschoolers can comment at the link below.
For more information on the Federal Tax Credit Scholarship Program, visit EdChoice.org
This is general information, not legal or tax advice. HEAV is not a law firm. For guidance on your specific situation, consult a tax professional or a qualified attorney.
