Education Freedom Credit

How does the tax credit work?

An individual taxpayer may make a qualifying cash contribution to an approved Scholarship Granting Organization, or SGO, and may receive a federal income tax credit of up to $1,700 per year. A credit reduces federal income tax owed, dollar for dollar, subject to the program’s rules and the taxpayer’s circumstances.

Contributions go to an approved SGO, not directly to Capstone. The SGO then awards scholarships to eligible K–12 students. Donors cannot earmark a contribution for a particular student.

Who can participate?

Parents, grandparents, other family members, friends, and community supporters may be able to participate if they meet the federal tax requirements. They do not have to live in North Dakota to contribute to an approved North Dakota SGO. That means a grandparent in another state, for example, may be able to help fund scholarships for eligible North Dakota students through this program.

What could this mean for North Dakota?

The potential is significant. North Dakota processed just over 470,000 individual income tax returns in 2024. If taxpayers representing just 10% of that number—approximately 47,000—each made a qualifying $1,700 contribution, they could generate nearly $80 million in scholarships. This is an illustration, not a forecast: the number of returns does not establish how many taxpayers will qualify for or use the credit, and scholarship funds would serve eligible students across the state.

For Capstone, additional scholarship resources could help more families access an education that forms young men and women in wisdom and virtue.

How would a family receive tuition assistance?

Families seeking a scholarship would apply through a participating SGO. The SGO would review the application, verify eligibility—including applicable household income requirements—and award scholarships under its program rules. An eligible scholarship could then help pay tuition at Capstone. Contributing to an SGO does not reserve funds for a donor’s child or another specific student.

We do not yet have application instructions, deadlines, award amounts, or confirmation of which approved SGO will serve Capstone families. We will share those details when they are established so interested families know where and how to apply.