Trump Tax Plan: Homeschool Tax Credit

Signed into law by President Trump on July 4, 2025, the One Big Beautiful Bill Act introduced broad changes to federal education tax policy, including provisions that may benefit homeschooling families. While the legislation does not create a direct federal tax credit specifically for homeschooling, it expands several financial mechanisms that families can use to support education-related expenses, such as scholarship donation credits and more flexible 529 plan rules.

A financial advisor can help families evaluate how these changes affect their tax strategy or long-term education savings goals. Connect with an advisor for free.

Trump Tax Plan: Potential Tax Benefits for Homeschooling

Although the legislation stops short of establishing a federal tax credit for homeschooling itself, it includes two notable provisions that may provide indirect financial support. These measures expand access to education funding and broaden the permitted uses of existing tax-advantaged accounts. 

Tax Credit for Donations to Scholarship-Granting Organizations

One of the most significant education-related provisions is the creation of a federal tax credit for contributions to certified scholarship-granting organizations. Section 25F of the legislation allows taxpayers to claim a dollar-for-dollar credit, subject to an annual cap, for donations that fund K–12 education scholarships. The maximum credit is $1,700 per tax year and is not indexed for inflation.

These scholarships can be used by families, including those who homeschool, to pay for qualified educational expenses, such as: 

• Tuition and fees
• Curriculum and instructional materials
• Books and educational content
• Online courses
• Tutoring services from qualified professionals
• Standardized test fees
• Dual enrollment classes
• Educational therapies, such as speech and occupational therapy

How Does It Compare With the Previous Law?

Under prior federal law, no comparable federal tax credit existed for contributions to scholarship-granting organizations. Tax incentives of this type were generally limited to state-level programs.

While some states continue to offer credits or deductions tied to school choice or education donation programs, federal tax law historically did not include a parallel mechanism that could indirectly support homeschooling expenses. This provision represents a new federal pathway for funding K–12 education costs, including those associated with homeschooling, through third-party scholarship programs.

Check out our in-depth study to learn more about how the the One Big Beautiful Bill Act (OBBBA) impacts Americans across the country.

Using 529 Education Savings Accounts for Homeschooling Expenses

The bill also expands what constitutes a “qualified education expense” under Section 529 education savings plans. These plans have traditionally been used for postsecondary education and, more recently, limited K–12 tuition expenses. The legislation significantly broadens their scope.

According to Section 70413 ¹ of the bill, families will be allowed to use 529 funds, without incurring taxes or penalties, for a wide variety of K–12 costs, including:

• Curriculum and materials
• Online educational programs
• Tutoring by credentialed professionals
• Standardized test fees
• Costs of dual enrollment college courses
• Educational therapies

Furthermore, in 2026, the law allows up to $20,000 in annual withdrawals from 529 accounts for qualified K-12 education expenses (up from $10,000 in 2025).

How Does It Compare With the Previous Law?

Previously, 529 accounts could be used for up to $10,000 per year in K–12 tuition expenses. ² However, the IRS does not currently recognize most homeschooling-related costs, such as curriculum materials, tutoring, or therapies, as qualified expenses. This means families using 529 funds for those purposes could have faced taxes and penalties. 

The change will, for the first time at the federal level, treat a wide range of homeschool-related expenditures as qualified uses of 529 funds. That offers more flexibility and financial relief for homeschool families.

How OBBBA Could Impact Public Schools

The One Big Beautiful Bill Act includes several tax and education-related provisions that may influence public school funding over time. By expanding education-related tax benefits that can be used outside traditional public school systems, the legislation could shift some financial support toward families pursuing private or home-based education options. If broadly adopted, these changes may alter the relative financial incentives associated with public education.

Public schools, which depend heavily on federal and state funding formulas tied to student enrollment, could experience downstream effects if a meaningful number of families choose alternative education pathways. Enrollment declines can translate into reduced per-student funding, potentially resulting in budget constraints and difficult decisions regarding staffing levels or academic programs.

Supporters of the legislation argue that expanded school choice and increased competition could encourage public schools to adapt and innovate.

Ultimately, the extent of the impact will depend on how widely the new provisions are utilized and how state policymakers respond to any resulting funding pressures.

Bottom Line 

Although the new legislation does not offer a stand-alone federal tax credit for homeschooling families, it introduces two major enhancements: a new credit for donations to scholarship-granting organizations and expanded access to 529 education savings accounts for homeschool-related expenses. These changes align with Trump’s ongoing push for school choice, reflecting both past campaign promises and executive actions. As tax policy continues to evolve, a financial advisor can help families take full advantage of any available tax benefits for education.

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