Educational Choice for Children Act of 2025

Tax Credits for Individuals and Corporations: Individuals can receive a credit against their tax equal to the amount of qualified contributions, limited to the greater of 10 percent of their adjusted gross income or $5,000 (Section 2(a)(1)). Corporations can also receive a credit of up to 5 percent of their taxable income (Section 2(b)(1)).

Educational Opportunities for Students: The bill provides scholarships for qualified elementary and secondary education expenses, which can include tuition, books, online materials, and even educational therapies for students with disabilities (Section 2(a)(1)(c)(3)).

Tax-Free Scholarship Income: For individuals, gross income will not include amounts provided to a dependent through these scholarships (Section 4(a)).

Protection of Organizational and School Autonomy: The bill states that scholarship granting organizations and private or religious schools should have maximum freedom and should not be subject to mandate, direction, or control by any Federal, State, or local government entity (Section 5(a)(1) and (2)).

Preservation of Parental Rights: The Act specifies that no government entity shall disfavor or discourage parents from using scholarships at private or nonprofit institutions, including faith-based schools (Section 5(a)(3)).

Limitations on Tax Credits: Individual credits are capped at either 10 percent of adjusted gross income or $5,000, whichever is greater (Section 2(a)(1)(b)(1)). Corporations are limited to a credit of 5 percent of their taxable income (Section 2(b)(1)).

Volume Cap Restrictions: Taxpayers can only claim the credit up to the amount of the volume cap allocated by the Secretary (Section 2(a)(1)(b)(2)). This cap starts at $10,000,000,000 for the year 2026 (Section 3(a)).

Reduction Based on State Credits: The amount of the federal credit allowed for a taxpayer is reduced by any amount allowed as a credit on a State tax return for the same qualified contributions (Section 2(a)(1)(b)(3)).

Requirements for Scholarship Organizations: Organizations must undergo annual financial and compliance audits by an independent certified public accountant (Section 2(a)(1)(c)(4)(F)). They must also ensure that no officer or board member has been convicted of a felony (Section 2(a)(1)(c)(4)(G)).