Married Couples Could Claim Up to $3,400 in New IRS Tax Credits Starting in 2027: Who Qualifies?

Married couples in the US could claim up to $3,400 in federal tax credits from 2027 by donating to eligible scholarship organisations. However, the maximum is not automatic, and couples must meet separate contribution requirements for each spouse to qualify for the full amount.

The Education Freedom Tax Credit allows eligible taxpayers to claim up to $1,700 each for qualifying cash contributions to Scholarship Granting Organisations (SGOs). The credit is non-refundable, meaning it can reduce eligible federal tax liability but does not automatically provide a cash payment for any unused amount.

The US Department of the Treasury and the Internal Revenue Service (IRS) announced proposed regulations on 1 October 2026. The programme is scheduled to begin on 1 January 2027 under legislation enacted in 2025.

How Married Couples Can Qualify for the $3,400 Credit

Under Section 25F of the Internal Revenue Code, eligible taxpayers can claim a credit of up to $1,700 for qualifying cash contributions to approved SGOs. Married couples filing jointly could claim a combined maximum of $3,400. Under the proposed regulations, each spouse is treated as a separate taxpayer when applying the individual limit. Both must make qualifying contributions to receive the maximum combined credit.

For example, if both spouses contribute enough to qualify for the full individual credit, they could potentially claim $3,400 on their joint federal tax return. If only one spouse makes a qualifying contribution, the couple cannot automatically claim the full amount. The credit is based on eligible donations, not marital status alone. The proposed regulations explain the separate taxpayer limits and the conditions for claiming the credit.

Who Is Eligible for the New IRS Tax Credit?

Taxpayers must make qualifying cash contributions to an eligible SGO. These organisations must meet the programme's requirements and be recognised as eligible through the relevant state certification process. States can voluntarily participate in the programme and submit lists of qualifying scholarship organisations to the IRS. An organisation's charitable status alone does not guarantee that donations to it qualify for the federal credit.

The IRS reported that 30 states had opted into the programme by the time the regulations were announced on 1 October 2026. Taxpayers should check the latest official information to confirm that their chosen organisation is eligible for the relevant tax year. The credit is intended for eligible US citizens and residents who make qualifying contributions under the programme's rules.

Why the $3,400 Maximum Is Not Guaranteed

The Education Freedom Tax Credit is non-refundable. It can reduce eligible federal income tax liability, but taxpayers cannot automatically receive any unused credit as cash. For example, a taxpayer eligible for a $1,700 credit who has only $1,000 in relevant federal income tax liability may not be able to use the entire credit against that year's tax.

Eligible unused amounts can generally be carried forward for up to five years, subject to the programme's rules. State tax benefits also affect the calculation. The federal credit is reduced by the amount of any state tax credit claimed for the same qualifying contribution. Taxpayers must also account for the rules governing charitable deductions for contributions covered by the federal credit. Consequently, the amount a couple can ultimately use depends on qualifying donations, state tax credits, and their individual tax circumstances.

What Can the Scholarships Cover?

The programme supports scholarships for eligible kindergarten-through-12th-grade students. Depending on the applicable requirements, qualifying educational expenses may include:

• Private school tuition and other eligible school expenses
• Academic tutoring
• Services for students with special needs
• Books and educational materials
• Computers and other qualifying educational equipment

Not every expense automatically qualifies. Scholarship organisations must follow the applicable programme requirements when awarding funds. The tax credit supports donations used to fund eligible scholarships; it is not a direct payment to parents or a general-purpose education allowance.

When Can Couples Claim the Credit?

The credit applies to qualifying contributions made from 1 January 2027. Eligible taxpayers who donate during 2027 would generally claim the credit on their 2027 federal tax return, filed in 2028. Although the Treasury and IRS have issued temporary regulations to establish implementation procedures, the comprehensive regulations remain proposed. Taxpayers should check the latest official guidance before making a contribution.

For married couples, the potential $3,400 credit offers a way to support eligible education scholarships while reducing federal income tax. However, the maximum depends on both spouses meeting the contribution requirements, the organisation's eligibility and the amount of credit they can use under the applicable rules.