Scholarship Granting Organizations in North Carolina
North Carolina has filed an advance election with the IRS and appears on the participating-state list for 2027, so donors in North Carolina will be able to claim the federal scholarship tax credit once the program takes effect on January 1, 2027. The state's list of qualifying SGOs has not been submitted yet — the IRS has deferred that deadline and procedure to future guidance.
Where North Carolina stands
Governor vetoed opt-in legislation in August 2025; the legislature overrode the veto of House Bill 87 in June 2026. Confirmed on the IRS participating-state list for 2027. The Opportunity Scholarship program provides an existing administrative model.
From the Section 25F State Opt-In Tracker, reviewed July 2026. Status can change during legislative sessions.
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A short email the moment North Carolina's opt-in status changes, plus formation deadlines as January 1, 2027 approaches.
What this means in North Carolina
For donors
Once the program takes effect on January 1, 2027, North Carolina taxpayers who contribute to an SGO on the state's certified list can claim a dollar-for-dollar federal income tax credit of up to $1,700 per year ($3,400 for married couples filing jointly).
For families & schools
SGOs on the North Carolina list will award scholarships to K-12 students whose household income is at or below 300% of area median income — covering tuition, tutoring, books, and other qualified expenses.
For organizations forming an SGO
Formation is the useful work right now: secure 501(c)(3) status with an SGO primary mission and meet the four federal structural requirements. North Carolina has elected to participate, but no state has submitted its SGO list yet — the IRS has deferred that deadline and procedure to future guidance. Be ready to file the day North Carolina opens its process.
The federal rules are the same in every state
Section 25F’s structural requirements apply identically in North Carolina and every other participating state.
Donor credit
$1,700 / yr
$3,400 married filing jointly — dollar-for-dollar federal credit
Student eligibility
≤ 300% AMI
Household income at or below 300% of area median gross income
Spending ratio
90 / 10
At least 90% of annual revenues to qualified scholarships
Distribution
10+ students
Awarded to ten or more students not all at one school
Finding an SGO in North Carolina
No SGO is federally listed anywhere yet — the program takes effect January 1, 2027, and the procedure for a state to submit its list of qualifying SGOs is still pending IRS guidance. North Carolina has elected to participate, so organizations preparing now will be among the first able to serve North Carolina students. Our directory will list organizations by state as those listings are published.
North Carolina SGO questions, answered
Has North Carolina opted into the Education Freedom Tax Credit (Section 25F)?
North Carolina has opted into the Education Freedom Tax Credit (Section 25F). Governor vetoed opt-in legislation in August 2025; the legislature overrode the veto of House Bill 87 in June 2026. Confirmed on the IRS participating-state list for 2027. The Opportunity Scholarship program provides an existing administrative model.
Is the Education Freedom Tax Credit the same as the Federal Scholarship Tax Credit (FSTC)?
Yes. The Education Freedom Tax Credit (EFTC), the Federal Scholarship Tax Credit (FSTC), the Educational Choice for Children Act (ECCA), and Section 25F are four names for the same federal program — a dollar-for-dollar tax credit of up to $1,700 per year for donations to scholarship granting organizations, effective January 1, 2027.
Can North Carolina donors claim the $1,700 federal scholarship tax credit?
Once the program takes effect on January 1, 2027, North Carolina taxpayers who contribute to an SGO on the state's certified list can claim a dollar-for-dollar federal income tax credit of up to $1,700 per year ($3,400 for married couples filing jointly).
How do I find a Scholarship Granting Organization in North Carolina?
No SGO is federally listed anywhere yet. North Carolina has elected to participate for 2027, but the procedure and deadline for a state to submit its list of qualifying SGOs are still pending IRS guidance. The SGO Guide directory at sgoguide.com/find will list North Carolina SGOs as those listings are published.
How do I start an SGO in North Carolina?
Form (or restructure) a 501(c)(3) with a primary mission of providing scholarships to eligible students, then build the required compliance structure — no donor earmarking, an arm's-length award process, the 90/10 spending ratio, and awards to ten or more students who do not all attend the same school. North Carolina has elected to participate for 2027; the process for getting onto its SGO list is still being built, so the work that pays off now is being ready to file the moment it opens.
Around North Carolina
Every state bordering North Carolina has also opted in — Georgia, South Carolina, Tennessee and Virginia. This is one of the corners of the map where the program arrives everywhere at once on January 1, 2027.
Because eligibility turns on where the SGO is listed rather than where the donor lives, a donor in any of those states — or in any state at all — can give to an SGO listed in North Carolina and claim the full federal credit. What their own state's status decides is whether SGOs can be listed there to fund students who live there. Why donors and students are governed by different rules.
Disclaimer: This page summarizes publicly tracked legislative status and general program rules for educational purposes. It is not legal or tax advice. Section 25F regulations are still evolving — consult qualified counsel before making decisions about SGO formation or donations.
Talk it through before you decide.
Tell us about your organization and we’ll set up a consultation on your formation path, your state, and the timeline. It costs nothing and there is nothing to sign — and if it’s useful, we’ll walk through the platform on the same call.
What happens next
We read your submission and respond within one business day
A working session, typically 45–60 minutes — your situation, not a sales pitch
Which of the three paths fits, what your state requires, and what the timeline is
You leave with a clear recommendation — including when the answer is to join an SGO rather than form one, or to wait