Expanding Access to Jewish Day Schools in Greater Washington
A New Federal Opportunity to Support Jewish Day School Access
A new federal income tax credit taking effect in 2027 may create an additional mechanism for individuals to support scholarship funding at public and non-public K–12 schools, including Jewish day schools in Greater Washington.
As part of a coordinated regional effort led by The Jewish Federation of Greater Washington, and in partnership with Jewish day schools across the region, we are preparing to participate in this new federal program in a way that aligns with our shared commitment to strong, sustainable Jewish education.
Rather than navigating this independently, schools are working alongside Federation to ensure the program is implemented responsibly, compliantly, and in a way that strengthens Jewish education throughout Greater Washington.
Note: We expect Treasury to release proposed regulations by the end of September 2026 that will provide more guidance on how to administer the Federal Tax Credit Scholarship Program. The contents of the FAQs will be updated accordingly.
A Coordinated Effort to Strengthen Jewish Education
The Federal Tax Credit Scholarship Program allows eligible taxpayers to contribute to approved Scholarship Granting Organizations (SGOs) and receive a federal income tax credit.
Please consult your tax advisor.
In practice:
- A taxpayer makes a contribution (up to $1,700 annually, under current guidance) to an approved SGO.
- The taxpayer claims a credit on their federal income tax return for the amount contributed.
- The tax credit directly reduces the amount of federal income tax owed.
- The SGO distributes those funds as scholarships to eligible students at participating schools.
Scholarship dollars may be used to reduce tuition costs and may also support other qualified education-related expenses consistent with federal guidelines.
Participation is voluntary. The program operates through the federal tax code and does not alter state or local public school funding mechanisms.
Eligible public, charter, and non-public schools may participate. The tax credit opportunity is not limited to families currently navigating K–12 education; it also enables the broader community to support Jewish day school access, recognizing that strong Jewish day schools benefit the entire Jewish ecosystem.
Federation’s Role
The Jewish Federation of Greater Washington is spearheading the regional effort to:
- Facilitate a partnership with a Scholarship Granting Organization to serve Greater Washington
- Develop shared governance structures
- Coordinate communication across participating Jewish day schools
- Provide clear, accurate information to families and community members
This coordinated approach allows schools to focus on students and families and raise funds for the SGO to distribute to day school students while ensuring responsible implementation across the region.
Under this program, a taxpayer can make a contribution to a Scholarship Granting Organization (SGO) of their choice. When they contribute to an SGO, they can reduce their federal tax bill by 100% of the amount they contributed—up to $1,700 per taxpayer. The SGOs use the money to give scholarships to eligible students.
An SGO is a nonprofit organization that is recognized by a participating state as eligible under the Federal Tax Credit Scholarship Program. SGOs may be newly formed or pre-existing organizations that meet federal requirements.
An eligible student means an individual who
- Is a member of a household whose income, for the calendar year prior to the date of scholarship application, is not greater than 300% of the area median gross income; and
- Is eligible to enroll in a public elementary or secondary school.
While we believe that an eligible student must also attend a school located in a state that has opted in to qualify for a scholarship—as opposed to residing in an opt-in state—we need to await clarification in the proposed regulations to confirm.
Within our region, as of August 1, 2026, only Virginia has opted into the federal program while Washington, D.C. and Maryland have not yet made a decision. Federation, the partnering Day Schools, and the Jewish Community Relations Council of Greater Washington are engaging with policymakers as states consider participation.
We expect the proposed Treasury regulations to provide that SGOs may award scholarships not only for tuition and fees but for other qualified education expenses that can benefit eligible students who attend public, charter, or private schools, including:
- Books, supplies, and equipment;
- Academic tutoring;
- Special needs services;
- Room and board;
- Uniforms;
- Transportation;
- Extended day programs; and
- Computer equipment, software, and Internet.
Taxpayers may begin contributing to SGOs in January 2027. There is no overall funding cap, however, each taxpayer can only receive a tax credit of up to $1,700 per year.
No. Vouchers are government-funded—families receive public dollars to help pay tuition.
This Federal tax credit program is different: donors contribute to SGOs, students receive scholarships, and taxpayers receive a federal tax credit. In short, vouchers rely on government funding, while this federal tax credit program relies on community participation.
Any individual who is a resident or citizen of the United States may participate in the program.
You do not need to be a parent of a child in a participating school to contribute.
Please consult your tax advisor to address your tax position.
For each dollar you contribute to an eligible SGO, you can claim a dollar-for-dollar federal tax credit, up to $1,700 per year.
A tax credit directly reduces your federal income tax liability. For example, if your federal income tax liability is $10,000 and you contribute $1,700 to an eligible SGO, your tax liability would be reduced to $8,300.
When you file your taxes for the calendar year in which you made the contribution, you may claim the credit.
If your federal income tax liability is less than $1,700, any unused portion of the credit can be carried forward for up to five years.
Please consult your tax advisor.
We are awaiting clarification in the proposed Treasury regulations. The law suggests that a married couple filing jointly may be limited to a maximum tax credit of $1,700 because the couple is treated as a single “taxpayer” when filing a joint return.
Married couples filing separately could each claim the $1700 tax credit.
It is currently assumed that contributions may be designated to a specific participating school. IRS regulations will clarify how SGOs may process contributions with these types of restrictions.
However, the law expressly forbids earmarking a contribution for a specific student.
Yes. There are no restrictions against contributing across state lines, although to receive the federal tax credit, contributions must be made to SGOs located in states that opt into the program and are identified as eligible SGOs by the state.
You may also contribute to multiple SGOs. For example, you may claim a tax credit of $1,700 if you contribute $850 to one SGO and $850 to another SGO.
Contributions must be made in cash.
Because a tax benefit was already claimed when contributing to a Donor Advised Fund, a contribution from a DAF would not generate a federal tax credit.
Please consult your tax advisor.
Please consult your tax advisor. If you receive a federal tax credit for contributing to an SGO, you cannot also claim a state or an additional federal tax benefit on the same contribution.
You may contribute more than $1,700; you will receive a tax credit for the first $1,700 and a tax deduction for the remainder.
This will likely be dependent on the policies of the SGO administering the funds and amounts raised; however, we need to wait until the proposed regulations are released to confirm. In theory, depending on participation levels, the first scholarships could be distributed for the 2027–2028 school year.