To amend the Internal Revenue Code of 1986 to allow a credit against tax for charitable donations to nonprofit organizations providing education scholarships to qualified elementary and secondary students.

Under the bill, the tax credit is limited to the greater of $5,000 or 10% of adjusted gross income.

Further, the bill establishes a $5 billion annual volume cap (for 2025-2028) for the tax credit (which may be increased under certain circumstances). The volume cap is allocated by the Department of the Treasury for the tax credit on a first-come, first-serve basis (based on the contribution date). However, under the bill, 10% of the volume cap must be divided evenly among states for allocation to individuals residing in those states.

The bill allows any portion of the tax credit that exceeds the individual’s tax liability (less certain other tax credits) to be carried forward for up to five tax years.

The bill also

establishes specific requirements for a scholarship granting organization,

requires a scholarship granting organization to distribute all contributions within a specific timeframe (exceptions apply), and

excludes from gross income scholarships received by an individual from a scholarship granting organization.

Finally, the bill prohibits federal, state, and local government entities, officers, and employees from imposing requirements that prevent the use of scholarship funds for private or religious elementary or secondary education expenses or discouraging the use of scholarship funds at such education institutions.