Federal Tax Credit Scholarship Improvement Act

The Federal Tax Credit Scholarship Improvement Act amends the Internal Revenue Code to increase the maximum tax credit available for contributions to scholarship programs from $1,000 to $1,700 per taxpayer. This change directly affects individuals and married couples filing jointly who donate to qualified scholarship organizations, allowing them to claim a larger deduction against their federal taxes. The bill also establishes an automatic annual adjustment mechanism that increases the credit limit based on inflation starting in 2026, with any adjustments rounded to the nearest $50 increment. These provisions are set to take effect for tax years beginning after December 31, 2025.