Alaska nonprofits can now apply to grant K-12 scholarships under a new federal tax credit

Alaska nonprofits can now apply to join the state's first list of approved K-12 scholarship organizations, with first approvals expected by Sept. 30, 2026.

Starting Jan. 1, 2027, a taxpayer who donates to an approved organization can claim a dollar-for-dollar federal income-tax credit of up to $1,700 a year. The scholarships are tax-free and can cover tuition, tutoring, supplies or disability services, at public, charter, home, private or religious schools.

Awards go only to students in households earning up to three times their area's median income. Each organization must fund at least 10 students who don't all attend the same school, and spend at least 90 percent of its money on scholarships.

Congress created the credit in the 2025 reconciliation law; the administration calls it the Education Freedom Tax Credit. Governors choose yearly whether to take part, and Dunleavy has opted Alaska in, calling it "a tremendous opportunity" for students however they learn. Nonprofits apply through [email protected].

The credit draws on federal tax revenue, not the state budget.

The Association of Alaska School Boards opposes public financing of private, parochial or home schooling "whether through vouchers, tax credits, or individual K-12 savings accounts," arguing it drains money from public classrooms. NEA-Alaska likewise opposes using tax systems to fund private and religious schooling, citing constitutional and funding concerns.