Last verified: October 2026
Is the federal scholarship tax credit coming to Knoxville families?
It is expected to, because Tennessee has opted in. TDOE's SGO page says federal regulations were released October 1, 2026, that organizations can now file a preliminary interest form, and that a formal application will follow later this fall.
Until TDOE publishes approved SGOs, no family in Knox, Blount, Anderson or Sevier County can apply for one of these scholarships.
Who would qualify for a tax-credit scholarship in East Tennessee?
NCSL's reading of the federal statute sets two tests for a student: being eligible for public school, and living in a household at or under 300% of the area's median income. On the giving side, a donor can take up to $1,700 a year off federal income tax, dollar for dollar.
Unlike EFS, the federal law does not depend on Tennessee's school categories, so whether a Category IV school can benefit will depend on how each SGO sets its rules.
| Federal Scholarship Tax Credit is | Federal Scholarship Tax Credit is not |
|---|---|
| Federal: donors claim it on their own income tax, from 2027 | Taking family applications in Tennessee today |
| Switched on here by Tennessee's opt-in | Administered by TDOE the way EFS is |
| Meant for families earning up to 3x the local median | A set dollar figure |
| Distributed by nonprofit SGOs the state approves | A reason to skip the EFS application |