Ohio's election for 2027

A state takes part only if it elects to. Ohio is on the IRS's list of states that made an advance election to participate for 2027, and the Ohio Attorney General's office has confirmed that Ohio has opted to be a covered state for the federal scholarship granting organization program.

The election is not complete yet. Ohio must submit its list of SGOs to the IRS by February 15, 2027. If it does not, no organization in Ohio qualifies for 2027. As of 2026-10-16, no Ohio agency has published how an SGO gets onto that list. The Attorney General's office says it is unaware of any planned changes to the state-level SGO program.

What the federal credit is

• Up to $1,700 per taxpayer per year (26 U.S.C. 25F(b)(1)). The IRS's announcement of the proposed rules puts the combined limit for a married couple filing jointly at twice the per-taxpayer amount.
• The gift must go to an SGO on a participating state's list, and the SGO may use it only for scholarships within that state.
• The federal SGO rules are not the same as Ohio's. Federal law uses a household income limit based on area median income for students and its own spending test for SGOs; Ohio's certification uses different tests. An SGO that wants to offer both credits must meet both sets of rules.
• An amount credited under the federal credit cannot also be deducted as a charitable contribution (26 U.S.C. 25F(e)).

How the federal credit works with Ohio's credit

The law itself reduces the federal credit by any state credit for the same contributions. Under 26 U.S.C. 25F(b)(2), the federal 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.

How that reduction applies to a single gift is set out only in a proposed rule: Federal Scholarship Tax Credit, REG-117199-25, a notice of proposed rulemaking for publication in the Federal Register on October 2, 2026. Under the proposed rule, when one gift has a part designated as the federal qualified contribution and a part that is not, the state credit is applied first to the part that is not designated. Any state credit beyond that part still reduces the federal credit. If the whole gift is designated and a state credit is claimed on it, the federal credit is reduced dollar for dollar. This rule is proposed, not final, and it may change before final regulations are issued.

Ohio and federal rules also differ in ways the proposed rule does not resolve:

• Ohio lets a gift made by the unextended due date of a return count for the year before; the federal credit counts a contribution in the calendar year it is made.
• Ohio's law has no provision reducing the Ohio credit because of the federal credit.

What is still unknown

• Who in Ohio will submit the State's SGO list to the IRS by February 15, 2027, and what an SGO must do to be on it.
• Whether the final regulations keep the proposed ordering rule. Public comments and a public hearing come before any final rule.

Official sources

• IRS, Federal Scholarship Tax Credit (FSTC), including the list of participating states
• IRS news release IR-2026-117, announcing the proposed and temporary regulations
• REG-117199-25, Federal Scholarship Tax Credit (proposed regulations)
• 26 U.S.C. 25F
• Ohio Attorney General, Scholarship Granting Organization Certification, including its FAQ