To amend the Internal Revenue Code of 1986 to allow a credit against tax for charitable donations to nonprofit organizations providing education scholarships to qualified elementary and secondary students.

The "Educational Choice for Children Act of 2025" introduces a new federal tax credit under the Internal Revenue Code for individuals. This credit is allowed for qualified contributions made to scholarship granting organizations (SGOs) , which provide educational scholarships. The maximum credit an individual can claim is the greater of 10 percent of their adjusted gross income or $5,000, and it is subject to a national volume cap. A scholarship granting organization must be a 501(c)(3) non-profit, not a private foundation, with its primary activity being the provision of scholarships for qualified elementary or secondary education expenses. These organizations are required to maintain separate accounts for qualified contributions, undergo annual financial and compliance audits, and verify the income of eligible students. They must also avoid earmarking contributions for specific students and are prohibited from awarding scholarships to disqualified persons. An eligible student is defined as an individual whose household income does not exceed 300 percent of the area median gross income and who is eligible to enroll in a public elementary or secondary school. Qualified elementary or secondary education expenses include tuition, curriculum materials, books, online educational materials, tutoring, standardized test fees, dual enrollment fees, and educational therapies for students with disabilities, including expenses for homeschooling. The bill establishes a national volume cap for the credit, set at $5 billion annually for calendar years 2025 through 2028, allocated on a first-come, first-served basis. This cap can increase in subsequent years if 90 percent or more of the cap is utilized. To ensure accountability, SGOs are subject to a "failure to distribute receipts" provision, requiring them to distribute a significant portion of their receipts as scholarships within a specified timeframe, with a safe harbor for administrative expenses. Furthermore, the act stipulates that amounts received by dependents as scholarships from SGOs for qualified education expenses are exempt from gross income. Crucially, the legislation includes strong provisions for organizational and parental autonomy , explicitly prohibiting federal, state, or local government entities from mandating, directing, or controlling any aspect of SGOs or non-public schools. It also protects parental rights to use these scholarships at private or religious educational institutions without discrimination.