Federal regulators intend to publish by year’s end guidance that reads the new federal K–12 scholarship tax credit’s eligible expenses “as broad as we can,” the Treasury Department’s acting tax-policy chief said Thursday, less than seven weeks before the program opens. Kevin Salinger, who is also the Internal Revenue Service’s acting chief counsel, said the forthcoming update would cover “a large range of educational needs,” according to Education Week.

The preview matters because the credit is not limited to private-school tuition. It can finance scholarships for expenses connected to public, charter, private and religious schooling, but the precise boundaries have remained unresolved. Salinger did not identify particular expenses that Treasury will approve, and his remarks are not binding guidance. They do, however, give school districts and scholarship organizations a clearer signal about the administration’s intended direction before the credit takes effect Jan. 1.

Under the IRS program, an individual may claim a nonrefundable federal income-tax credit of as much as $1,700 for cash donated to an approved scholarship-granting organization, or SGO. Married couples filing jointly may claim up to $3,400 when both spouses contribute. The IRS listed 30 participating states as of Oct. 22, and each participating state must certify its SGOs before donations to them can generate the credit.

Why the Expense Definition Matters

Congress designed the credit by borrowing the list of qualified K–12 expenses used for Coverdell education savings accounts. That list includes tuition and fees, academic tutoring, special-needs services, books, supplies, equipment and computer technology. It also includes certain transportation, extended-day programs and other services when they are required or provided by a public, private or religious school.

That structure creates different practical stakes across school sectors. Tuition gives private-school families an obvious expense. Public schools generally do not charge tuition, so their students’ access may depend on whether guidance treats tutoring, after-school programs, devices, internet service, transportation or other supports as reimbursable in the circumstances schools actually use them. Salinger’s broad-reading signal therefore has potential consequences beyond conventional private-school choice.

Treasury’s existing proposed rules establish how donors, states and SGOs would operate, but they leave key expense questions for separate guidance. Written comments on those rules are due Dec. 1, and a public hearing is scheduled for Dec. 15. The rules would allow SGOs to pay schools directly for tuition and fees and to pay verified vendors for other eligible expenses, reducing the need for money to pass through families.

Public Schools Need an Operating Model

A broad expense definition would not automatically deliver money to public-school students. Families still need scholarships, SGOs need donations, and districts need a workable way to connect eligible services with those organizations. Private schools and established scholarship groups often already have tuition billing and application systems. Many districts do not.

A recent BPC analysis said public schools would not necessarily have to charge families a fee for an SGO to cover a qualifying service. The expense’s substance, rather than the existence of a bill, would control eligibility, and an SGO could pay a verified tutoring or after-school vendor directly. But districts would still need agreements, consent processes and records capable of showing that a scholarship paid for an eligible student and expense.

Salinger also said Treasury expects to issue employer guidance soon for after-tax payroll deductions directed to SGOs. That channel could widen the donor base, including through school-district employees, but its scale is unknown. Treasury has projected that the program could eventually support 11 million donors, nearly $26 billion in annual contributions and as many as 2.2 million scholarships by 2030. Those are estimates rather than guaranteed outcomes; the GAO review notes that Treasury’s cost-benefit analysis depends on donor participation and SGO capacity.

Safeguards Remain Unsettled

Broad eligibility also raises questions about services schools already owe students. A coalition of disability organizations has urged Treasury to make clear that scholarship money cannot replace services required under federal or state law, Education Week reported. The proposed regulations say the credit does not change state obligations under the Individuals with Disabilities Education Act, but detailed guidance will determine how SGOs distinguish optional special-needs services from supports a school must provide without charge.

Program integrity is another unresolved issue. SGOs must verify students, expenses and vendors, while states must certify organizations and submit annual lists. The IRS has said donors may generally rely on its approved-SGO list, but families and schools will still need to understand which expenses qualify and what documentation is required. The school-communications association NSPRA has cautioned that final definitions remain pending even as districts prepare for a January launch.

The Educator's Takeaway

Thursday’s remarks give education leaders a planning signal, not a final rule. Districts in participating states can map tutoring, extended-day, transportation, technology and special-needs programs that might fit the statute, while identifying which services are already legally required and therefore should not be shifted to scholarships. Finance, legal, special-education and family-engagement teams will need a common interpretation before promising access or designing payment systems. The most important near-term documents will be Treasury’s written expense guidance and payroll-deduction instructions, because they will determine whether public-school participation is administratively realistic or remains secondary to established private-school scholarship networks. Until those documents appear, districts should treat the broad-reading pledge as directional and avoid presenting any particular expense as approved.

What Comes Next

The policy summit where Salinger spoke placed the tax credit’s implementation alongside state and district preparations. Treasury’s year-end target leaves little time before the Jan. 1 start date. States must complete SGO lists, and organizations must build donor acknowledgments, applications and verification systems.

The immediate test is not whether regulators favor a broad program; Salinger’s remarks answer that. It is whether the written guidance defines expenses clearly enough for schools and families to act without shifting mandatory public obligations into privately administered scholarships. The breadth of those definitions, the safeguards attached to them and the number of donors who participate will determine how much of the new credit reaches students across different school settings.