Tennessee Advances Participation in the Federal Education Tax Credit Program

Intent to Participate Now Open for Interested Nonprofits

Nashville –The Tennessee Department of Education (TDOE) is excited to take the first step in implementing the federal education tax credit program and to expand opportunities for students across all educational settings. The preliminary interest form for the federal education tax credit is now open to interested Scholarship Granting Organizations (SGOs). Tennessee is one of 30 states that have made an advanced election to participate thus far.

Federal temporary regulations were released last Thursday, detailing requirements for states to make elections to participate and requirements for organizations that are certified as an SGO.

Additional information includes the U.S. Department of the Treasury’s Education Freedom Tax Credit fact sheet and FAQ.

Organizations seeking to establish a nonprofit entity should direct questions about forming a 501(c)(3) organization to the Tennessee Secretary of State’s Office and the Internal Revenue Service (IRS).

SGOs are nonprofits that accept contributions from individuals and use the funds to provide scholarships for education-related expenses. SGOs must use at least 90 percent of their income on scholarships that support education choice options, including tuition, fees, academic tutoring, and classroom supplies for eligible K-12 students. More information on eligible expenses will be available later this fall from the U.S. Department of the Treasury.  

“This is the first step of many as we continue expanding educational opportunities for Tennessee families,” said Lizzette Reynolds, Commissioner of Education. “We look forward to building on this progress and giving more families the flexibility to meet the needs of diverse learning environments.”

“A quality education can change the outcome of a child’s life, and that’s why Tennessee continues to pursue every opportunity to allow parents to choose the learning environment that best fits their child’s unique needs,” said Governor Bill Lee. “I am grateful to President Trump and Secretary McMahon for their leadership to make school choice a reality for every family, and we’re proud to participate in the federal Education Freedom Tax Credit program.”

A Scholarship Granting Organization seeking inclusion on the state’s SGO list should complete this preliminary interest form. Questions may be directed to SGO.Questions@tn.gov.

For Tennessee Department of Education media inquiries, contact Edu.MediaInquiries@tn.gov.

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