Educational Choice for Children Act of 2025

Tax Relief for Individual Donors: Individuals who are U.S. citizens or residents can receive a tax credit for their qualified contributions, limited to the greater of 10 percent of their adjusted gross income or $5,000 (Section 2, subsection a).

Tax Relief for Corporate Donors: Corporations can receive a tax credit for qualified contributions, limited to 5 percent of their taxable income (Section 2, subsection b).

Financial Support for Students: Eligible students, defined as those from households with incomes not exceeding 300 percent of the area median gross income, can receive scholarships for various expenses including tuition, books, and even educational therapies for disabilities (Section 2, subsection c).

Tax-Free Scholarship Income: Scholarships provided by these organizations for qualified education expenses are not included in the recipient's gross income (Section 4, subsection a).

Protection of Educational Autonomy: The bill includes provisions to ensure that scholarship granting organizations and private or religious schools maintain maximum freedom and are not subject to mandate or control by government entities (Section 5, subsection a).

Limits on Tax Credits: The amount an individual can claim is capped at a specific dollar amount or a percentage of their income, which may limit the benefit for higher-income donors (Section 2, subsection b).

Limited Availability via Volume Cap: The total amount of the credit is subject to a $10,000,000,000 volume cap, and credits are allocated on a first-come, first-serve basis, which could mean the funds are exhausted during the year (Section 2, subsection b; Section 3, subsection a).

Restrictions on Contributions: Taxpayers cannot claim a charitable contribution deduction under section 170 for any contribution for which they are already receiving the tax credit (Section 2, subsection e).

Risk of Scholarship Loss due to Distribution Failures: If a scholarship granting organization fails to distribute its receipts according to the required amounts and deadlines, future contributions to that organization may not be treated as qualified contributions (Section 2, subsection c).