South Carolina to Launch Scholarship Tax Credit in 2027

Eligible taxpayers can claim up to $1,700 to support K-12 student scholarships starting on January 1.

Updated on Oct. 30, 2026 in Financial Aid

Isometric editorial illustration featuring a leather-bound book atop abstract geometric cubes, representing a structured educational scholarship funding initiative. — South Carolina taxpayers can begin claiming a new federal tax credit for K-12 scholarship contributions starting on January 1, 2027. AI Illustration. Upload story photo >

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Starting January 1, 2027, South Carolina taxpayers can claim a new federal tax credit for contributions made to approved scholarship granting organizations. This program, established by the One Big Beautiful Bill Act, aims to increase funding for K-12 student scholarships across the state.

Why it matters

The initiative creates a new channel for educational funding, potentially generating hundreds of millions of dollars for K-12 students. By incentivizing donations through Section 25F tax credits, the program seeks to expand schooling opportunities regardless of a family's income or location.

Individual taxpayers can claim a credit of up to $1,700, while married couples filing jointly may claim up to $3,400 under Section 25F of the Internal Revenue Code. With 92% of families qualifying, the program launches January 1, 2027, for all eligible South Carolina residents.

The players

U.S. Treasury

The federal agency overseeing the implementation and administration of the new scholarship tax credit program.

The details

Taxpayers participate by making cash contributions directly to certified scholarship granting organizations. These entities then distribute the funds as scholarships to K-12 students. Under the rules overseen by the U.S. Treasury, contributors claim the credit on their federal income tax returns once the program begins in 2027.

January 1, 2027: The federal scholarship tax credit program launches in South Carolina.

Education Landscape

This program marks a shift in how federal tax policy interacts with local K-12 education funding in South Carolina. It mirrors broader efforts to increase private support for student scholarships through established federal tax code incentives.

South Carolina families can look forward to increased scholarship availability for K-12 students starting in 2027. If you are interested in contributing or qualifying for a scholarship, discuss the requirements with your tax adviser or a local school official.

The takeaway

This program introduces a significant tax incentive for supporting K-12 education in South Carolina. Potential contributors should review the guidelines under Section 25F of the Internal Revenue Code to prepare for the January 1, 2027, launch.