H.R. 10412: To amend the Internal Revenue Code of 1986 to eliminate the State opt-in requirement for the qualified elementary and secondary education scholarship credit.

This bill would change a federal tax credit for donations used to fund K-12 education scholarships.

What the current law does

Under current law, the qualified elementary and secondary education scholarship credit only works in states that choose to participate. In other words, a state must “opt in” before donors in that state can claim the credit for contributions to approved scholarship organizations.

What the bill would change

The bill would remove that state opt-in requirement. That means the credit would no longer depend on whether a state has formally agreed to participate. Instead, the credit could apply based on the federal rules alone, as long as the other requirements are met.

Practical effect

In plain terms, the bill would likely make the scholarship tax credit available in more places, because states would not need to take a separate action to allow it. This could expand the number of taxpayers who can claim the credit and the number of scholarship organizations that can receive qualifying donations.

Technical changes in the tax code

The bill makes several wording and cleanup changes to Section 25F of the Internal Revenue Code to remove references to the state opt-in system and adjust related cross-references. It also changes the effective date so the amendment would apply as if it had been included in an earlier law, Public Law 119-21.

Relevant Companies

None found