The Federal School Scholarship Tax Credit

Yes. Any individual taxpayer in the United States may make a qualified contribution to an approved Scholarship Granting Organization (SGO) and claim a federal tax credit—up to $1,700 per taxpayer beginning in 2027. Businesses and couples filing jointly may also participate, subject to program rules. You don’t need to have a student enrolled to contribute.

Donations must be made directly to an approved SGO—a nonprofit organization certified by the IRS and participating states to manage and distribute scholarship funds.

If Maryland opts into the program, St. Mary’s Ryken plans to work with a participating SGO so donors can designate their contributions to support Ryken students through The Knight Fund.

Eligible students must meet the criteria in the federal law:

• They must come from a household with income not more than 300% of the area median gross income (AMGI) for the locality in which they live. 

• They must be eligible to enroll in a public elementary or secondary school (i.e., living in the local school district). 
  In practical terms, the “300% of AMGI” threshold means that in many areas most families will fall under the limit—some estimates suggest around 90% of U.S. children could qualify on that basis.

1. A donor makes a cash contribution to a participating SGO in a state that has opted into the program.

2. The SGO distributes scholarships to eligible students to the school of choice (based on income & school-enrollment criteria) for approved K–12 educational expenses.

3. The donor receives a federal tax credit (dollar-for-dollar) for their contribution—offsetting their tax liability.

4. Participating states and SGOs must comply with reporting, verification, and oversight requirements.

Unfortunately, federal law prohibits donors from receiving any direct or indirect benefit from their own contributions.
This means that parents cannot use donations made through an SGO to offset or fund their own child’s tuition.

However, when families and friends of the St. Mary’s Ryken community contribute together, those gifts have a powerful collective impact—expanding scholarship opportunities, keeping tuition more affordable for all students, and helping the school manage rising operational costs while sustaining excellence in Catholic education.

The answer is, very little—or nothing at all.

Because the Federal School Scholarship Tax Credit provides a dollar-for-dollar federal tax credit (up to $1,700 per taxpayer), your contribution amount is directly subtracted from your federal tax bill.

For example:
If you owe $5,000 in federal taxes and contribute $1,000 to an approved Scholarship Granting Organization (SGO), your federal tax owed would be reduced to $4,000.

While your out-of-pocket cost depends on your individual tax situation, most donors experience little to no net cost—and the impact of your gift is immediate, providing tuition assistance to deserving students and families.