In a monumental win for federal school choice, the House and Senate have passed a revised version of the Educational Choice for Children Act (ECCA) legislation in the “One Big Beautiful Bill” (OBBB). OUA and Teach Coalition worked closely with members of Congress to secure the bill’s passage to protect key language defending schools’ religious liberty. Here is everything you need to know about the revised version:
- 100% non-refundable credit for donations from individual taxpayers to scholarship granting organizations (SGOs)
- Permanently in the tax code; no sunset provision
- No annual volume cap
- Every state has an opportunity to participate, but states must opt-in
- Donors can participate in all 50 states
- Contributions can be used only in states that have opted in
- Hard donor cap of $1,700 per individual taxpayer
- Income threshold of 300% of median income by geographic area
- Eligible uses are linked to section 530(b)(3)(A) – Coverdell Savings Accounts – and include tuition, tutoring, special needs services, education technology, books and supplies, transportation, and extended day programs.
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- Must be a 501(c)(3) organization, not a private foundation
- Prevent co-mingling of qualified contributions with other amounts by maintaining separate accounts
- Provide scholarships to 10 or more students who do not attend the same school
- Cannot spend less than 90 percent of the donations to the organization
- Cannot earmark or set aside contributions for scholarship on behalf of a specific student
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