Treasury and the IRS estimate that the new federal scholarship tax credit could draw nearly $26 billion a year in qualified contributions by 2030. The figure arrives with the proposed rules published this week and rests on assumptions about how many states, charities and taxpayers take part. It is a forecast attached to an enacted credit that does not take effect until January 1, 2027, and it describes donations, not a federal budget cost.
What the Treasury and IRS estimate actually says
The projection sits in a Treasury release dated October 1, 2026. The sentence reads: “By 2030, Treasury and the IRS estimate that the program could support 600 to 700 SGOs, with more than 11 million taxpayers making nearly $26 billion in qualified contributions annually and funding as many as 2.2 million scholarships each year.” SGOs are scholarship-granting organizations, the charities that collect the donations and pay out the awards.
Three details in that sentence matter for how the number is read. The year is 2030, so it is a forward estimate, not a current total. The measure is qualified cash contributions, which is neither the amount of credit taxpayers will claim nor the revenue the Treasury forgoes. And the verbs are conditional: the program “could” support these organizations, and scholarships are “as many as” 2.2 million, a ceiling rather than a midpoint.
The IRS newsroom release issued the same day repeats the “nearly $26 billion in qualified contributions annually” wording, so the two agencies are presenting one estimate rather than two independent ones.
The arithmetic inside the $26 billion
The release gives three round numbers that can be set against each other. Dividing nearly $26 billion by more than 11 million contributing taxpayers gives an average of a little under $2,400 per taxpayer. Dividing the same total by as many as 2.2 million scholarships gives roughly $11,800 per scholarship. Both are simple divisions of the published figures, not numbers Treasury has stated, and the second one is flattering to the ceiling: if fewer than 2.2 million awards are funded, the average award would be larger.
Spread across 600 to 700 SGOs, the total would average somewhere near $37 million to $43 million in contributions per organization each year. That is the scale of operation the estimate assumes for a sector that, under the proposal, must be built from charities that qualify. Per the IRS release, an SGO must be a 501(c)(3) public charity, keep contributions in a segregated account, and appear on a participating state’s list.
Thirty states and a multistate safe harbor
The credit works only where a state agrees to take part. In the Treasury release, Secretary Scott Bessent said: “Thirty states have already opted in.” Education Secretary Linda McMahon called the measure “the largest expansion of school choice in history” that “will supercharge those opportunities for millions of children.” Those are statements of purpose from officials who administer and champion the program, and they sit next to a projection those same agencies produced.
The release also describes a multistate safe harbor, built around an 85% scholarship-granting activities threshold. Treasury says it could enable approximately 450 additional organizations and raise contributions by up to $3 billion annually. That is stated as an addition to the $26 billion, which would put the combined upper reach near $29 billion a year, again by simple addition of the published numbers. The safe harbor figure carries the same “could” and “up to” qualifiers as the main estimate.
Why the number is not in the regulation
The projection appears only in the press releases. The proposed rule in the Federal Register, published October 2, 2026, does not contain the $26 billion figure. A proposed rule is not final, and the estimate has not been tested in the regulatory comment process that follows publication.
That placement has a practical consequence. The binding parts of the program, including who qualifies as an SGO and how contributions are counted, will come from the final rule. The forecast of donor behavior is Treasury’s own communications product, and the agencies can revise it without amending any regulation. The IRS chief executive, Frank J. Bisignano, said the rules “provide states, scholarship-granting organizations, and taxpayers with the clarity they need to prepare for this new education tax credit,” which frames the proposal as guidance for preparation, not a guarantee of uptake.
What would have to happen for 2030 to look like the forecast
Reaching the projected scale takes several things at once, each visible in the release. More than 11 million taxpayers would have to contribute. Between 600 and 700 qualifying SGOs would have to exist and pass state listing. The release does not say how many states beyond the thirty already opted in the projection assumes. Whether the “nearly $26 billion” assumes the full safe harbor, or excludes it, is also something the release treats separately, since the $3 billion is described as an increase on top.
The credit is not yet in effect, so no actual contribution totals exist to compare with the forecast. The first real contribution data can come only after January 1, 2027. Until then the $26 billion remains what the Treasury release calls it: an estimate that the program “could” reach, issued on October 1, 2026, by the agencies that will run it.
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AI assistance was used in producing this article, which was reviewed against the official documents it cites.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
