Treasury Outlines SGO Parameters Expected in Regulations
June 10, 2026
Author
Yesterday, the U.S. Department of Treasury held an event where they previewed for the implementation of the new federal scholarship tax credit program created in the One Big Beautiful Bill Act. Of note, they said not to expect the proposed regulations before September. Given an expected 30鈥�45 day comment period followed by OMB review, final regulations may not be issued until December. 91porn advises districts to wait for final regulations rather than rely heavily on the information released today.
Here is a brief summary of how Treasury is proposing to address key aspects of the SGO program not specified in the statute:
- 90% spending requirement鈥�� this would be measured against total receipts, not net of expenses. Safe harbor: if the SGO's activities are primarily scholarship-granting, it can measure the 90% against funds held in a segregated Section 25F account. Multistate SGOs must satisfy this separately per state.
- What this means for public schools partnering with an SGO: If a district works with a community foundation to collect SGO donations, those funds must be kept in a separate account, and the foundation may use no more than 10% for administrative costs. While the foundation can support the program through other general funds, it cannot exceed the 10% cap on managing SGO donations.
- What this means for public schools partnering with an SGO: If a district works with a community foundation to collect SGO donations, those funds must be kept in a separate account, and the foundation may use no more than 10% for administrative costs. While the foundation can support the program through other general funds, it cannot exceed the 10% cap on managing SGO donations.
- School definition鈥�� consistent with Section 530; includes public, private, religious, K鈥�12. Home schools qualify if treated as schools under state law. Tribal schools expressly included.
- What this means for public school : If you are in a state that defines homeschooling as a form of private schooling rather than creating a distinct "homeschooling" statute, homeschooling students would be able to get scholarships. States that have this policy include: AL CA, IN, MA NE, WI, TX.
- What this means for public school : If you are in a state that defines homeschooling as a form of private schooling rather than creating a distinct "homeschooling" statute, homeschooling students would be able to get scholarships. States that have this policy include: AL CA, IN, MA NE, WI, TX.
- Defining eligible expenses: Treasury will issue separate guidance after the September proposed regulations are released that will determine what 鈥渜ualified elementary and secondary education expenses鈥� qualify for scholarships. They note that these must be 鈥渁dditive.鈥�
- What this means for public schools: Districts seeking clarity on what programming qualifies beyond tutoring and afterschool services will need to wait. It remains unclear whether offerings like new AP/IB courses, new CTE pathways, extended-year services and programs or other supplemental enrichment programs will be eligible.
- What this means for public schools: Districts seeking clarity on what programming qualifies beyond tutoring and afterschool services will need to wait. It remains unclear whether offerings like new AP/IB courses, new CTE pathways, extended-year services and programs or other supplemental enrichment programs will be eligible.
- Student income verification: SGOs can verify student eligibility (under 300% AGI) through multiple methods, including direct documentation (pay stubs, W鈥�2s, tax returns, IRS transcripts, or commercial data) or categorical eligibility via existing federal, state, or tribal assistance programs. Foster children are automatically eligible (no income verification required), and Treasury is considering additional low鈥慽ncome area safe harbors.
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