Gov. Mike Braun announced Thursday that Indiana will opt into a new initiative allowing Hoosiers to collect federal tax savings for investments made in K-12 scholarships.
The new federal tax credit was established under President Donald Trump’s One Big Beautiful Bill and applies to charitable contributions made to scholarship-granting organizations that serve eligible K-12 students.
“Parents are in charge of their children’s education,” Braun said in a news release. “As a state, we are prioritizing that through universal school choice and a state tax credit for donations made to scholarship granting organizations, which helps make a high-quality education accessible and affordable for every Hoosier family.
“Under President Trump’s leadership, we welcome this increased focus on school choice at the federal level and are ready to leverage this additional, federal tax credit to expand opportunities for students and families across our state,” he continued.
Braun visited Saint Philip Neri Catholic School to mark the occasion, speaking with teachers and students.
Families can access scholarships through eligible scholarship-granting organizations to support qualified educational expenses, including costs incurred for children at public and private schools — such as tuition, fees, tutoring, educational therapies, transportation or technology.
Beginning Jan. 1, 2027, Hoosiers will be eligible for a nonrefundable federal tax credit of up to $1,700 for contributions to participating scholarship-granting organizations. Any unused credit may be carried forward for up to five years.
"Every child is unique, and Indiana is home to a variety of high-quality educational options to meet those needs, regardless of a family’s income or ZIP code,” said Indiana Education Secretary Katie Jenner.
“This new federal tax credit will continue to drive investments in scholarships, ensuring high-quality educational opportunities are within reach for every learner, in an environment that helps them reach their greatest potential,” she said.
The state of Indiana also offers a 50% tax credit for donors to qualified Indiana scholarship-granting organizations. There are no limits to the amount a donor can contribute to them.
Several GOP-led states have also opted in, according to Ballotpedia News. Students in states that do not opt in cannot receive scholarships funded under the program, but donors in those states can still receive a federal tax credit by donating to scholarship-granting organizations in participating states.
In order to qualify for a scholarship under the program, students must live in households earning no more than 300% of the area’s median gross income and be eligible to enroll in K-12 schools.
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