nebraska Families Gain Access to Federal School Choice Tax Credit
Nebraska families will soon be able to redirect up to $1,700 of their federal taxes to Scholarship Granting Organizations (SGOs) in exchange for a dollar-for-dollar federal tax credit, thanks to a new program and Governor Jim Pillen‘s decision to opt Nebraska in. These SGOs will then distribute the funds to families to help cover K-12 education expenses.
Eligible expenses include tuition, tutoring, books, supplies, technology, transportation, and other school-related costs. SGOs are permitted to retain up to 10 percent of donations for administrative costs, meaning at least 90 percent of the donated funds will directly benefit students.Representative Adrian Smith, who helped draft the policy, estimates this could qualify up to 90 percent of Nebraska’s K-12 students for scholarships, possibly leveraging “billions of donated dollars.”
The program aims to expand educational opportunities for students in all settings – public,private,homeschool,or hybrid programs – affirming parents’ rights to direct their children’s education,according to representative Mike Flood.
To qualify, students must be eligible to attend a public school, and family income must not exceed 300 percent of the area median income.the U.S. Department of the Treasury is expected to release further guidance on program implementation.
Sarah Schinstock,a mother of seven children,six of whom attend St. Teresa Catholic School, expressed relief at the program’s potential impact, stating it woudl provide “more lasting scholarship money” and empower her family to make the best educational choices.
This federal program marks a meaningful shift for Nebraska, which previously had no formal school choice program. Past state-level attempts, including the Chance scholarships Act (LB753) and a program created under LB1402, were ultimately repealed following legislative action and voter referendums. Governor Pillen criticized previous opposition from teachers’ unions, stating their efforts had negatively impacted vulnerable students.
Governor Pillen’s governance will collaborate wiht school choice advocates to compile a list of qualified SGOs for consideration by the Treasury Department before January 1, 2027.