Dear Friends of Catholic Education,

Thank you for your interest in the new Federal Scholarship Tax Credit — a first-of-its-kind opportunity that could open the door for thousands more students to receive the education that's right for them. This is the first in a series of updates we'll share as the program takes shape, so you'll be ready when the time comes.

Signed into law in July 2025, the Federal Scholarship Tax Credit (FSTC) — sometimes called the Education Freedom Tax Credit — will allow individual taxpayers to claim a federal tax credit of up to $1,700 per year for contributions to approved Scholarship Granting Organizations (SGOs), beginning January 1, 2027.
Why this is such a significant opportunity:

• It's a dollar-for-dollar tax credit, not a deduction. Every dollar you contribute (up to $1,700) comes directly off your federal tax bill — meaning you can direct part of the taxes you already pay toward scholarships for students.
• It's designed for individuals. You don't need to own a business or navigate a complex application process to participate.
• It helps real families. Scholarships can support K–12 tuition as well as tutoring, instructional materials, and special education services. Families earning up to 300% of their area's median income may qualify — reaching working- and middle-class households across our region.

The IRS announced this month that 27 states have already elected to participate. Pennsylvania has not yet opted in. Governor Shapiro has indicated he is waiting for final federal regulations — expected later this year — before deciding, and the deadline for the Commonwealth to join for 2027 is January 1, 2027.
The stakes for our students are high. Demand for scholarships in Pennsylvania already far exceeds supply — tens of thousands of applications across the Commonwealth went unfunded last year — and the Diocese of Pittsburgh Scholarship Organization is already part of the state network of more than 250 scholarship organizations that could put these federal dollars to work immediately.

1. Stay tuned. We'll notify you as soon as final federal rules are released and when Pennsylvania makes its decision, along with clear instructions on how to participate.
2. Consider making your voice heard. If you'd like to see Pennsylvania opt in, please contact Governor Shapiro's office.
3. Share this with others. If you know friends or family who'd want to direct their federal tax dollars toward student scholarships, encourage them to join this update list.

To those of you who already give through Pennsylvania's EITC program — thank you. Your generosity is funding scholarships for students right now, and the federal program is expected to complement, not replace, that vital support.

We're grateful for your interest and look forward to keeping you informed. If you have questions in the meantime, please don't hesitate to reach out.

Gratefully,

Anthony Novelli
Director, EITC/OSTC Services
anovelli@diopitt.org
412-745-3360