Spring Hill and Thompson's Station families will have access to a new federal scholarship program for K-12 students starting Jan. 1, 2027.

The Education Freedom Tax Credit passed as part of President Donald Trump's One Big Beautiful Bill Act in 2025. The program, first reported on by Rachel Wegner of the Columbia Daily Herald, gives taxpayers a dollar-for-dollar federal tax credit for contributions to approved nonprofits called scholarship granting organizations, or SGOs. Those organizations then distribute scholarships to eligible students to cover expenses at public and private schools.

The U.S. Department of the Treasury and IRS released temporary rules for the program on Thursday, Oct. 1. Tennessee is one of 30 states that have opted in, the Tennessee Department of Education (TDOE) announced Wednesday, Oct. 7.

Who qualifies

To receive a scholarship, a student must be eligible to enroll in a public school and come from a household earning at or below 300% of the area's median gross income. The U.S. Department of Housing and Urban Development sets those figures.

That threshold varies by county. HUD's fiscal year 2026 median family income for a family of four in Maury County is $109,500, according to HUD income data. At 300%, a Maury County family of four earning up to $328,500 could qualify. Williamson County falls under the Nashville metro area, where the median is higher, meaning the income ceiling there would be even greater.

The federal Treasury Department estimates about 96% of children in participating states could be eligible. As many as 2.2 million scholarships nationwide could be funded by 2030, according to the agency.

How the tax credit works

Individual taxpayers can claim up to $1,700 per year for contributions to SGOs. Married couples filing jointly can claim up to $3,400. The credit directly reduces federal income tax owed. If the credit exceeds the tax bill, the remaining amount rolls forward for up to five years, according to a U.S. Education Department fact sheet.

Donors cannot earmark contributions for a specific student. SGOs must spend at least 90% of their funds on scholarships and distribute awards to at least 10 students attending different schools.

What scholarships cover

Scholarships can pay for qualifying K-12 expenses including tuition, tutoring, special education services, books, supplies and certain extended day care programs. The scholarship amount is set by each SGO and cannot exceed the qualified expenses covered.

Officials react

U.S. Treasury Secretary Scott Bessent called the program the nation's first nationwide school choice program in an Oct. 1 news release.

Gov. Bill Lee said in the TDOE's Oct. 7 announcement that Tennessee would pursue every opportunity to let parents choose the learning environment that fits their child's needs. Tennessee Commissioner of Education Lizzette Reynolds described the tax credit as a first step in expanding educational options for families.

Not everyone supports the program. Paige Shoemaker DeMio, a senior policy analyst at the Center for American Progress, a nonprofit think tank, argued the tax credit strips states of oversight power over SGOs and may disproportionately benefit wealthy families. DeMio wrote that the credit "works as a loophole for the federal government to subsidize private education using public taxpayer dollars."

How this differs from state vouchers

The federal tax credit is separate from Tennessee's existing school voucher programs. State vouchers go directly to families by set deadlines. The federal program routes money through SGOs, which decide which students receive scholarships.

What's next

Tennessee has not yet released a list of approved SGOs. The TDOE is asking organizations interested in participating to fill out a preliminary interest form. Families should watch for the state's official SGO list, which will be posted on the TDOE website before the Jan. 1 launch.