IRS considers plans for major new tax credit for millions

The Internal Revenue Service (IRS) and Treasury Department are seeking public feedback on how to implement a new federal tax credit scholarship program created under the One Big Beautiful Bill Act (OBBBA), which aims to expand school choice and help students cover education-related costs.

The credit will apply to donations made to scholarship-granting organizations that support elementary and secondary students from low- and middle-income households.

Under the OBBBA, the tax credit scholarship program is designed primarily to help K–12 students pay for private school tuition, though it also covers a range of other educational expenses. States will decide individually whether to participate in the program.

This is a developing story. More to follow.