Beech Tree News Network

New Law to Unlock Federal Scholarship Tax Credit for Kentucky Families

LEXINGTON, Ky. — The Bluegrass Institute today welcomed the Kentucky General Assembly's override of Governor Andy Beshear's veto of House Bill 1, making Kentucky the 28th state to opt into the federal Education Freedom Tax Credit program. The action opens the door to new educational options for Kentucky students in public, private, and home school settings — at no cost to Kentucky taxpayers.

"Education is perhaps the most important service we perform for future generations," said Caleb O. Brown, CEO of the Bluegrass Institute. "Kentucky families deserve the same opportunities that families in 27 other states — including six of our border states — already have. We are glad the legislature acted to ensure that these federal education dollars will benefit Kentucky students."

Brown added, “This could mean a substantial increase in education funding for some of Kentucky’s most vulnerable students.”

Under the law, Kentucky will participate in the Education Freedom Tax Credit. Beginning in the 2027 tax year, individuals who contribute to qualified Scholarship Granting Organizations (SGOs) will receive a dollar-for-dollar federal tax credit of up to $1,700 per year. SGOs will distribute those funds as scholarships to eligible K-12 students for qualifying educational expenses — including private school tuition, tutoring, transportation, curriculum materials, and internet access — without impacting state revenue.

"This is a meaningful step forward for Kentucky students and families," Brown said. “We look forward to seeing the innovative ways parents find to educate their children, whether it’s private tuition or supplementing public education.”