Indiana is officially stepping into a new federal opportunity that supporters of K–12 scholarships have been watching closely. This week, Governor Mike Braun announced that Indiana will opt in to a new federal tax credit program designed to encourage charitable giving that funds school choice scholarships for eligible students.

The federal tax credit—created under President Donald Trump’s One Big Beautiful Bill—applies to contributions made to approved Scholarship Granting Organizations (SGOs) that provide scholarships for K–12 students. In the announcement, Braun emphasized parental leadership in education and said Indiana is ready to leverage the federal credit to expand opportunity for families across the state.

Here’s the key timeline: Beginning January 1, 2027, Hoosiers will be eligible for a nonrefundable federal tax credit of up to $1,700 for gifts to participating SGOs. Any unused credit may be carried forward for up to five years. Families can use scholarships through eligible SGOs for qualified education-related expenses—such as tuition and fees, tutoring, educational therapies, transportation, and technology—for students in public or private school settings.

Governor Braun marked the decision with a visit to Saint Philip Neri Catholic School, meeting with teachers and students. Indiana Secretary of Education Dr. Katie Jenner noted that the state offers many high-quality educational options and said the new federal credit can help drive further scholarship investment.

Several Indiana-based SGOs have already indicated plans to participate in 2027, including The Lutheran Scholarship Granting Organization of Indiana and others.

As details are finalized, we’ll share updates and practical guidance for donors and families as 2027 approaches.