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National programs and tax rules

Help that doesn’t depend on your state: the new federal scholarship tax credit, family savings accounts, tax rules that are often misunderstood, disability services and private grants.

Federal Scholarship Tax Credit (starts 2027) · 529 plans for K-12 costs · Coverdell education savings accounts · Federal tax breaks that do not cover homeschool costs · Special education services (IDEA) for homeschooled children · HSLDA Compassion grants

Federal Scholarship Tax Credit (starts 2027)

Starting January 1, 2027, people who donate to approved scholarship granting organizations (SGOs) can get a federal tax credit of up to $1,700. The $1,700 is a cap on the donor's credit, not the size of a scholarship for your child. Families receive scholarships from SGOs, and only in states that chose to take part and sent the IRS their list of SGOs. Income limits and the list of allowed expenses come from the federal law.

The credit begins January 1, 2027, and goes to individual taxpayers who give cash to a listed SGO.
The $1,700 limit applies to each donor's credit. The law does not set a per-child scholarship amount.
A state must choose to participate and give the IRS its list of SGOs before donations in that state count for the credit.
As of September 14, 2026, the IRS lists 30 states that made an advance election for 2027: Alabama, Alaska, Arkansas, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, North Dakota, North Carolina, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia and Wyoming.
For 2027, a state must make its advance election on or before January 1, 2027, and can complete it by sending its SGO list on or before February 15, 2027.
A child qualifies if the household income for the prior calendar year is not greater than 300 percent of the area median gross income, and the child is eligible to enroll in a public elementary or secondary school.
Scholarships can only pay for the expenses listed in 26 U.S.C. 530(b)(3)(A): tuition, fees, academic tutoring, special needs services for a special needs beneficiary, books, supplies and other equipment tied to enrollment or attendance at a public, private or religious school; room and board, uniforms, transportation and supplementary items the school requires or provides; and computer technology, equipment or internet access used during the school years.
Proposed IRS regulations published October 2, 2026 say an expense qualifies only if it has the required connection to a "school," which means a school that provides K-12 education "as determined under State law."
Treasury and the IRS say they plan to issue further guidance on what counts as qualified expenses and schools. Comments on the proposed rules are due December 1, 2026, and a public hearing is set for December 15, 2026.

For homeschool families: Federal law and the October 2026 proposed rules do not mention homeschooling. They tie qualified expenses to a "school" as determined under state law, so whether homeschool costs count likely depends on how your state treats homeschools, and the IRS says more guidance on schools and expenses is coming.

Official sources

529 plans for K-12 costs

A 529 plan is a state-sponsored savings account whose earnings grow tax free and can be withdrawn tax free for qualified education costs. For K-12, the IRS says up to $20,000 per year per student can be used starting after 2025 (it was $10,000 through 2025). The K-12 costs must be tied to enrollment or attendance at a public, private or religious school. State income tax treatment of 529 withdrawals can be different from the federal rules.

K-12 withdrawals are limited to a total of $20,000 per year per beneficiary from all of that student's 529 accounts; the limit was $10,000 through 2025.
For 2025 returns, IRS Publication 970 still describes the K-12 limit as no more than $10,000 of tuition.
Qualified K-12 costs now include tuition, curriculum and curricular materials, books or other instructional materials, tutoring or educational classes outside the home, standardized and AP or college admission test fees, dual enrollment fees, and educational therapies for students with disabilities.
Publication 970 adds that outside tutoring counts only if the tutor is not related to the student and is a licensed teacher, has taught at an eligible school, or is a subject matter expert.
These K-12 costs must be in connection with enrollment or attendance at an elementary or secondary public, private or religious school, which IRS defines "as determined under state law."
Contributions to a 529 plan are not deductible on your federal return, but earnings grow tax free and qualified withdrawals are not taxed.

For homeschool families: IRS Topic 313 and Publication 970 do not mention homeschooling. They require the K-12 costs to be connected to enrollment or attendance at a public, private or religious school as determined under state law, so homeschool use depends on whether your state treats your homeschool as such a school.

Official sources

Coverdell education savings accounts

A Coverdell ESA is a federal tax-advantaged savings account that can pay for K-12 as well as college costs. Total contributions for one child cannot exceed $2,000 a year, and higher-income contributors can give less or nothing. Withdrawals are tax free when used for qualified education expenses.

Total contributions to all Coverdell accounts for one beneficiary cannot exceed $2,000 in a year, and contributions are not deductible.
The $2,000 limit shrinks when the contributor's modified AGI is between $95,000 and $110,000 ($190,000 and $220,000 on a joint return), and no contribution is allowed at $110,000 or more ($220,000 or more joint). Organizations can contribute regardless of income.
The account must be set up before the beneficiary turns 18, unless the beneficiary has special needs.
Qualified K-12 expenses include tuition and fees, books, supplies and equipment, academic tutoring, and special needs services, tied to enrollment or attendance at an eligible elementary or secondary school.
Room and board, uniforms, transportation and supplementary items count only if the school requires or provides them. Computers, software and internet access count if used by the student and family during the K-12 years.
An eligible elementary or secondary school is a public, private or religious school that provides K-12 education, as determined under state law.

For homeschool families: IRS Topic 310 and Publication 970 do not mention homeschooling. K-12 expenses must relate to enrollment or attendance at a school as determined under state law, so whether homeschool costs qualify depends on how your state classifies your homeschool.

Official sources

Federal tax breaks that do not cover homeschool costs

Two federal education credits, the American Opportunity Credit and the Lifetime Learning Credit, are only for college and other postsecondary schooling. The educator expense deduction is only for teachers and staff working at least 900 hours in a school. In a 2003 letter, the IRS said a homeschooling parent cannot claim the educator expense deduction.

The American Opportunity Credit is only for students who have not finished the first 4 years of postsecondary education.
The Lifetime Learning Credit covers courses that are part of a postsecondary degree program or taken to acquire or improve job skills, at a college, university, vocational school or other eligible postsecondary institution.
The educator expense deduction is up to $300 ($600 if both spouses are eligible educators) for K-12 teachers, instructors, counselors, principals or aides who work at least 900 hours a school year in a school, as determined under state law.
IRS Information Letter INFO 2003-0204 says a person who provides home schooling cannot claim the educator expense deduction, because teaching your own children for free is not a trade or business.

For homeschool families: The IRS has said homeschooling parents cannot take the educator expense deduction, and the American Opportunity and Lifetime Learning credits apply only to postsecondary education.

Official sources

Special education services (IDEA) for homeschooled children

Under the federal special education law (IDEA), states and school districts must find and evaluate children with disabilities, including children in private schools. Whether a homeschooled child is treated like a private-school child depends on your state's law. Children placed in private schools by their parents have no individual right to the full services they would get in public school; instead the district decides on a share of equitable services.

States must identify, locate and evaluate all children with disabilities who live in the state and need special education, including those attending private schools ("child find").
School districts must locate, identify and evaluate children with disabilities whose parents enrolled them in private elementary and secondary schools in the district.
The U.S. Department of Education has said whether homeschooled children count as parentally placed private school children is left to state law; they are treated the same way only if the state recognizes home schools as private schools.
A parentally placed private school child has no individual right to receive some or all of the services the child would get in public school; the district makes the final decision on services under a services plan.
If a homeschooling parent does not consent to an evaluation, the district cannot override that refusal and does not have to consider the child for equitable services.
The Department has also said the law does not require districts to provide a free appropriate public education to children who are homeschooled or enrolled in private schools by their parents.

For homeschool families: Federal rules leave it to each state: homeschooled children get the same child find and equitable services treatment as private school children only if state law treats home schools as private schools. Ask your state education agency or school district how your state classifies homeschools.

Official sources

HSLDA Compassion grants

HSLDA, a homeschool legal advocacy group, runs donor-funded Compassion grants for homeschool families. Curriculum grants are $300 to $400 per child for families in financial need who are HSLDA members. Disaster relief grants of up to $650 help families recovering from natural disasters, and first-time applicants do not need to be members.

Curriculum grants are $300 to $400 per child for curriculum and academic expenses, and a family can apply once a year.
To qualify for a curriculum grant you must be a current HSLDA member, show significant financial need, have homeschooled at least one child age 6 to 19 for at least 3 months, fund your homeschool privately (not with public funds such as an ESA), and have legal custody.
Curriculum grant applications open three times a year: January 1 to February 28, April 1 to June 30, and September 1 to October 31. HSLDA says a window may be shortened or cancelled depending on funds.
HSLDA's page says the curriculum grant application was unavailable September 1 to 30 for a system update and reopened October 1.
Recipients must submit receipts showing how the grant was spent.
Disaster relief grants do not exceed $650 and are for families with physical damage from a regional or widespread natural disaster in the past 18 months, homeschooling at least one child age 6 to 19.
First-time disaster grant applicants do not need to be HSLDA members, but they need a free My HSLDA account; past Compassion grant recipients must be members and wait a year.

For homeschool families: These grants are only for homeschooling families, and HSLDA requires that the homeschool be privately funded rather than paid with public funds such as an ESA.

Official sources

Corral is not part of any of these programs. Each program’s administrator decides who qualifies and what can be bought. Use this to find the right program and the right questions, then confirm with them.

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