The IRS has issued proposed regs on the Federal Scholarship Tax Credit (FSTC). The guidance clarifies how to claim the credit for qualified cash contributions to eligible Scholarship Granting Organizations (SGOs). It also addresses, among other things, how state tax credits affect the federal credit and how unused credits can carry forward for up to five years. The IRS also issued temporary regs on procedures for states and SGOs. Together, the proposed and temporary regs establish reporting, verification and audit requirements. Taxpayers, SGOs and states can rely on the proposed regs for contributions beginning Jan. 1, 2027. The temporary regs expire Oct. 1, 2029. Contact us with questions.
