The New SGO Tax Credit: A 100% Federal Tax Credit for Charitable Giving

A new federal tax credit beginning in 2027 could create one of the most valuable charitable giving opportunities available to individual taxpayers. In this episode of Traction with the Tiger, Chris Wittich explains how Scholarship Granting Organizations (SGOs) work, why qualifying donations may receive a 100% federal tax credit, which states have opted into the program, and what taxpayers should watch as additional IRS guidance is released.

Whether you’re a taxpayer, advisor, or simply interested in future tax planning opportunities, this episode breaks down what makes this credit unique and why it’s worth following before it becomes available.

Frequently Asked Questions

What is the SGO tax credit?

The Scholarship Granting Organization (SGO) tax credit is a new federal tax credit that begins in 2027. Eligible taxpayers may receive a dollar-for-dollar federal tax credit for qualifying cash contributions made to certified Scholarship Granting Organizations.

How much is the federal tax credit?

Individuals may claim up to a $1,700 federal tax credit for qualifying contributions. Married couples filing jointly may qualify for up to $3,400 if both spouses are eligible.

Can I claim both the tax credit and a charitable deduction?

No. The same contribution cannot be used for both the federal SGO tax credit and a charitable deduction. Taxpayers also cannot use the same donation for both federal and state tax credits.