Most people I talk to have the same reaction when they first hear about the Education Freedom Tax Credit: “So it’s a tax deduction?” No. It is something much better. And once you understand the difference, you’ll see why this is such an unusual opportunity.
Here is the point in one sentence: a tax credit lets you move money you already owe the federal government into Christian education instead. You aren’t giving more. You are deciding where your money goes.
A deduction versus a credit
A deduction lowers the income you are taxed on. If you give $1,700 to a charity and you’re in the 22 percent tax bracket, a deduction saves you about $374. The other $1,326 comes out of your pocket. (And since most families now take the standard deduction, many get no tax benefit from charitable gifts at all.)
A credit lowers the tax itself, dollar for dollar. Give $1,700 to the Homeschool Fund, and your federal tax bill goes down by $1,700.
| Tax deduction | Tax credit | |
|---|---|---|
| What it reduces | Your taxable income | Your tax bill itself |
| Gift of $1,700 saves you | About $374 (22% bracket) | $1,700 |
| Your real cost | About $1,326 | $0 |
That’s why we say a tax credit isn’t really a donation in the usual sense. It’s a redirection.
Follow the money
Let’s say you owe $9,000 in federal income tax this year.
Without the credit: all $9,000 goes to the U.S. Treasury. From there, Congress decides what to do with it.
With the credit: you give $1,700 to the Homeschool Fund. Your tax bill drops to $7,300. The Treasury receives $7,300, and a Christian homeschool family receives $1,700 in scholarship help.
You paid the same $9,000 either way. The only difference is where $1,700 of it ended up. Instead of disappearing into a $7 trillion federal budget, it stays in your hands long enough for you to point it toward something you believe in.
If you’re married and file jointly, you and your spouse can each give $1,700 and redirect a combined $3,400.
“But I usually get a refund”
This is the most common question, and it trips up a lot of people. A refund doesn’t mean you didn’t pay taxes. It means you overpaid during the year through your paycheck withholding, and the government is giving some of it back.
The credit reduces the tax you owe. Your withholding stays the same. So if you normally get a refund, your refund gets bigger by the amount of the credit.
For example, suppose your tax for the year is $6,000 and you had $7,000 withheld. Normally you’d get a $1,000 refund. If you give $1,700 to the Homeschool Fund, your tax drops to $4,300, and your refund grows to $2,700. You get your $1,700 back.
If you’d rather not wait until April, you can adjust your Form W-4 with your employer so that less tax comes out of each paycheck during the year. Ask your tax preparer about this.
A few rules to know
- Up to $1,700 per person, per year. A married couple filing jointly can claim up to $3,400 if each spouse gives.
- Individuals only, cash gifts. Gifts from a business or through a partnership don’t qualify.
- Mark it when you give. A tax-credit gift has to be designated as one at the time of the gift.
- You can’t owe less than zero. The credit can’t exceed your tax, but any unused amount carries forward up to five years.
- No earmarking. You can’t direct your gift to a particular student. The fund awards scholarships by published rules.
- Gifts made on or after January 1, 2027 count. You’ll receive an acknowledgment letter by January 31, 2028, and claim the credit on IRS Form 8525 with your 2027 return.
Why this matters
For decades, Christian families who wanted to educate their children themselves have paid twice: once in taxes for a system they don’t use, and again for the books, curriculum and tutoring they actually do use. Many families who would love to homeschool simply can’t make the numbers work.
The Education Freedom Tax Credit changes that equation. For the first time, a grandparent in Nashville, a business owner in Louisville, or a young couple in Oklahoma City can take a portion of what they already owe Washington and send it straight to Christian education. That’s not new spending. It’s a new choice.
I can’t think of a better use for $1,700 of your federal taxes.
- Pre-register for 2027
- Read: The Education Freedom Tax Credit explained
- For donors: what to know before you give
This is not tax or legal advice. The examples above are simplified for illustration. Everyone’s tax situation is different, so talk with your tax advisor before you give.
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