A New Way to Support Christian Education
From Tax Bill to a Classroom Seat
A new federal Education Freedom Tax Credit will give eligible donors an opportunity to support student scholarships while reducing their federal income tax liability...and yes.. you can even choose Chapel Hill Christian Academy!
Beginning January 1, 2027, qualifying cash contributions to an approved Scholarship Granting Organization (SGO) may qualify for a dollar-for-dollar federal income tax credit of up to $1,700 annually. Tennessee has elected to participate in the program.
At Chapel Hill Christian Academy, we are excited about the opportunity this creates to help more families access an education that is distinctively Christian, academically excellent, and biblically saturated.
What Is a Dollar-for-Dollar Tax Credit?
A tax deduction reduces your taxable income. A tax credit reduces your actual tax liability. If you make a qualifying $1,700 contribution and are eligible to use the full credit, your federal income tax liability is reduced by $1,700.
How the Math Works
Suppose your federal income tax liability before this credit is $5,000, and you qualify to use the full $1,700 credit:
How Can I Support Chapel Hill Students?
CHCA will share its participating SGO partner, giving instructions, and any available options for supporting scholarships for Chapel Hill students once those arrangements are confirmed. Contributions must be made through a qualified SGO to be eligible for the credit.
Plan Now. Make an Impact in 2027.
Prayerfully consider how this opportunity could help you invest in the next generation. Check this page for updates as giving details become available.
The credit is nonrefundable, and individual tax circumstances affect its use. Consult your tax adviser before contributing. Visit the IRS Federal Scholarship Tax Credit page for official program information.
Questions? Reach out to Ben Reed, finance@chapelhillchristianacademy.com or 931-553-3656
FAQ
Frequently Asked Questions
Can I give directly to a student or designate my gift for a specific child?
No. To qualify for the federal tax credit, your contribution must go to an approved Scholarship Granting Organization (SGO). Gifts cannot be earmarked for a particular student. The SGO determines scholarship eligibility and awards.
Can I donate directly to CHCA and receive this credit?
A direct gift to CHCA does not automatically qualify. Contributions must be made through an approved SGO. We will share the appropriate giving instructions once CHCA’s participating SGO arrangements are confirmed.
When can I begin giving?
The program begins January 1, 2027. Qualifying contributions must meet program requirements and go to an approved SGO in a participating state.
How much is the federal tax credit?
Eligible taxpayers may claim a credit of up to $1,700 annually for qualifying cash contributions. You may give more, but contributions above the annual limit do not increase that year’s maximum credit.
How is a tax credit different from a tax deduction?
A deduction reduces the income subject to tax. A credit reduces your actual tax liability. If you qualify to use the full credit, a $1,700 qualifying gift reduces your federal income tax liability by $1,700.
Does this mean my gift costs me nothing?
If you qualify for and can use the full credit, the tax savings can offset your qualifying contribution. You still make the gift upfront. Because the credit is nonrefundable, the benefit depends on your tax circumstances.
Can I support scholarships for Chapel Hill students?
CHCA will share any available school designation options once our participating SGO’s procedures are confirmed. Supporting scholarships at a school is different from choosing an individual student to receive your gift.
Is this the same as Tennessee’s Education Freedom Scholarship (EFS)?
No. Tennessee’s EFS is a state scholarship program for eligible students. The federal Education Freedom Tax Credit is a separate opportunity for donors to support scholarships through approved SGOs.
Will a scholarship guarantee admission to CHCA?
No. Students must complete CHCA’s admissions process and meet the school’s admissions requirements. Scholarship funding does not guarantee enrollment.
Where can I learn more?
Visit the IRS Federal Scholarship Tax Credit page for official information. Consult your tax adviser about how the credit applies to your situation, and check this page for CHCA’s giving updates.