Trump Tax Plan: Homeschool Tax Credit

The “One Big Beautiful Bill Act,” signed by President Trump on July 4, 2025, makes several significant changes to federal education-related tax rules, especially those affecting homeschooling families. While it doesn’t create a dedicated homeschooling tax credit, it expands financial tools available to families, such as new scholarship donation credits and more flexible 529 plan options.

A financial advisor can help families evaluate how these changes may affect their personal tax strategy or long-term education savings goals.

Key Takeaways

• The Trump tax law, known as the One Big Beautiful Bill Act, introduces a federal tax credit for donations to scholarship-granting organizations, which can fund homeschooling expenses.
• It expands 529 plan rules to allow tax-free use of funds for a wide range of homeschool-related costs, such as curriculum and tutoring.
• The bill includes provisions that align with previous proposals focused on school choice and parental discretion in education spending.

Trump Tax Plan: Potential Tax Benefits for Homeschooling

While the legislation does not establish a direct federal tax credit for families who homeschool, it introduces two significant provisions that could provide indirect financial support. These provisions broaden access to educational funding and expand allowable uses of existing tax-advantaged accounts. 

Tax Credit for Donations to Scholarship Granting Organizations

A key element of the tax plan is the introduction of a federal tax credit for individuals who donate to certified scholarship-granting organizations. Section 25F of the bill allows taxpayers to claim a dollar-for-dollar credit, up to a specified cap, for contributions that fund K–12 education scholarships. The maximum credit depends on a taxpayer’s income and is capped at either $5,000 or 10% of income—whichever is greater.

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

The legislation makes clear that these scholarships may be used for students in “a homeschool (whether treated as a homeschool or a private school for purposes of applicable State law).” This provision increases accessibility for a wider range of homeschooling families.

How Does It Compare With the Previous Law?

Under previous federal law, there was no provision for a federal tax credit for contributions to scholarship-granting organizations. Such credits were generally available only at the state level.

Furthermore, while some states offered tax incentives for donations to school choice programs, federal tax law did not provide a parallel mechanism that directly or indirectly benefits homeschooling families. This credit represents a new federal avenue for funding homeschool expenses through third-party scholarships.

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 110110 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:

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

The language specifically includes homeschool expenses, even if a homeschool is not formally classified as a private school under state law. This ensures broader applicability across different state regulatory environments.

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 expenses¹. 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.

Alignment With Trump’s Education and School Choice Promises

The tax provisions reflect themes previously emphasized by the Trump administration, including the use of tax incentives to support educational alternatives. While the legislation itself focuses on tax incentives rather than direct regulatory action, its provisions align closely with the priorities outlined in the January 30, 2025, Executive Order on educational opportunity.

Reinforcing Parental Control and School Choice

In the Executive Order, President Trump stated, “Parents, not the government, play a fundamental role in choosing and directing the upbringing and education of their children.” The legislation mirrors this philosophy by giving families more financial flexibility in customizing their children’s education, particularly through tax-advantaged mechanisms that support homeschooling and private education.

• The tax credit for donations to scholarship-granting organizations advances the administration’s goal of expanding K–12 scholarship programs at the state level. This mirrors the Executive Order’s directive for the Department of Education to “issue guidance on how the States can use federal funding formulas to support their K-12 scholarship programs.”
• The expanded use of 529 accounts for homeschooling expenses builds upon a Trump-era tax change that first allowed families to withdraw up to $10,000 annually from 529 plans for K–12 tuition. The new law goes further by broadening qualified expenses to include homeschool curriculum, materials, tutoring, and other non-tuition costs — something not currently covered under federal law.

Delivering on Past Legislative Proposals

The tax provisions in the bill resemble earlier proposals such as the Education Freedom Scholarships and Opportunity Act and the School Choice Now Act, both of which were supported by the Trump administration but did not advance in Congress. The One Big Beautiful Bill Act includes a similar focus on the use of tax incentives to expand education-related options for families.

Additionally, the executive order called on multiple federal agencies, including the Departments of Education, Defense, Health and Human Services and the Interior, to create actionable plans for expanding educational alternatives. Although the tax legislation operates through the IRS rather than those agencies, it similarly aims to broaden access to educational options through financial incentives.

Broader Strategic Consistency

The White House fact sheet noted that “school choice has proven to be cost effective and saves taxpayer dollars.” By leveraging tax credits and existing savings mechanisms like 529 plans, the bill aims to incentivize private contributions and parental investment without significantly increasing federal education spending.

The provisions are consistent with past proposals that focused on expanding access to various forms of education through tax policy. For homeschooling families, the law marks a meaningful extension of federal support through indirect but impactful financial tools.

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 and parental empowerment, 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.

Tax Planning Tips

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