Governor Lombardo Opts-In To Federal Tax Credit Scholarship Program

Today, Governor Joe Lombardo officially announced that Nevada will opt in to the Federal Tax Credit Scholarship Program, a provision in the One Big Beautiful Bill Act, which passed last summer. The Governor's decision to opt Nevada into the program will greatly expand school choice options for families across the state.

"I thank President Trump for delivering a historic federal school choice program that puts families first," Lombardo said. "I enrolled Nevada into the Federal Tax Credit Scholarship Program to empower families with the freedom to choose education options that best fit their children's needs. This program marks a historic milestone for parental freedom and economic opportunity. In Nevada, we have expanded educational freedom through initiatives like open enrollment, increased transportation funding, and higher pay for charter school teachers-giving parents more control over their children's future. By opting into this program, we're accelerating that progress, and we're just getting started."

What is the Federal Tax Credit Scholarship Program?

The Federal Tax Credit Scholarship Program was created by the One Big Beautiful Bill Act and applies to taxable years beginning after December 31, 2026. The program allows individual taxpayers to receive a non-refundable, dollar-for-dollar federal income tax credit for cash contributions made to approved Scholarship Granting Organizations (SGOs).

What is the role of the State of Nevada?

Federal law establishes the program's core requirements, while the State of Nevada's role is primarily administrative. The State is responsible for determining the application process for SGOs, including the form format, required information, and verification procedures. The State must submit an annual list of qualifying SGOs to the U.S. Treasury Department by January 1 of each year. Only SGOs included on that list are eligible to receive contributions that qualify for the federal tax credit. Additional information about the State's application process will be provided once further guidance is issued by the U.S. Treasury Department.

What is a Scholarship-Granting Organization (SGO)?

Scholarship funds are administered by scholarship-granting organizations (SGOs), which are defined under federal law as tax-exempt 501(c)(3) nonprofit organizations, including educational nonprofits, universities, and religious organizations. SGOs distribute donated funds to families for eligible educational expenses and may retain up to 10% of scholarship fund income for administrative costs.

How does it work for donors?

Donors may contribute up to $1,700 in cash per year to qualified SGOs. Instead of a charitable deduction, the donor receives a direct credit against their federal income tax liability, meaning a $1,700 donation reduces federal taxes owed by $1,700. If the allowable credit exceeds the donor's federal tax liability for the year, the unused portion may be carried forward for up to five subsequent taxable years. While SGOs may only operate in states that opt into the program, residents of non-participating states may still donate to eligible SGOs operating in participating states and receive the federal tax credit.

How does it work for Nevada families?

Families must meet the income eligibility requirements (household income at or below 300% of area median income) and have a child eligible to enroll in a public elementary or secondary school. Scholarship funds may be used for private school tuition, tutoring, special education services, and other qualified education expenses. Priority may be given to students who received a scholarship in the prior year or who have a sibling who received one.

The program is scheduled to begin on January 1, 2027, and taxpayers will be able to make qualifying contributions to SGOs during 2027 and claim the credit on their 2027 federal income tax return.

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