H.R. 1, One Big Beautiful Bill Act (full text), signed into law by the President on July 4, provides federal tax credits up to $1700 for contributions to private-school scholarship granting organizations in states that do not provide a state tax credit for such contributions. States must elect in to participate in this program. Sec. 70411 of the new law provides in part::
(a) Allowance of Credit.--In the case of an individual who is a citizen or resident of the United States ... there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the aggregate amount of qualified contributions made by the taxpayer during the taxable year.
(b) Limitations.-- ``(1) In general.--The credit allowed under subsection (a) to any taxpayer for any taxable year shall not exceed $1,700. ``(2) ...The amount allowed as a credit ... shall be reduced by the amount allowed as a credit on any State tax return of the taxpayer for qualified contributions made by the taxpayer during the taxable year.
(c) Definitions.--For purposes of this section-- ``(1) ...The term `covered State' means one of the States ... that ...voluntarily elects to participate under this section and to identify scholarship granting organizations in the State.... `
(2) ... The term `eligible student' means an individual who-- (A) is a member of a household with an income which, for the calendar year ...is not greater than 300 percent of the area median gross income.... and (B) is eligible to enroll in a public elementary or secondary school.
(3) ... The term `qualified contribution' means a charitable contribution of cash to a scholarship granting organization that uses the contribution to fund scholarships for eligible students solely within the State in which the organization is listed pursuant to subsection (g).
News media describe the provision as a national school voucher plan. [Thanks to Scott Mange for the lead.]
