HB 1, passed during the 2026 Regular Session of the Kentucky General Assembly, represents a historic opportunity to expand educational opportunities for students across the Commonwealth. By allowing Kentucky to participate in a new federal scholarship tax credit program, lawmakers created a way to encourage private investment in education while keeping charitable dollars working here at home. And, we are one step closer to the program becoming reality.
Getting HB 1 across the finish line required lawmakers to look past months of misleading rhetoric and misplaced criticism. Rather than allowing misinformation to derail a once-in-a-generation opportunity, the General Assembly stayed focused on the facts. The result is a program that encourages private investment in Kentucky students, keeps charitable dollars in the Commonwealth, and creates new opportunities for children in public schools, private schools, and home-school settings – all without increasing state taxes.
That vision recently took another important step forward when Secretary of State Michael Adams signed the documentation enrolling Kentucky in the federal program with the Internal Revenue Service, and his office finalized the administrative regulations needed to implement HB 1. With those administrative steps complete, the focus now shifts from Frankfort to communities across Kentucky.
Beginning with the 2027 tax year, eligible taxpayers will be able to contribute up to $1,700 annually to an approved Kentucky Scholarship Granting Organization (SGO) and receive a dollar-for-dollar federal tax credit for that contribution. Instead of those tax dollars going to Washington, Kentuckians can choose to invest them directly in educational opportunities that benefit students in our communities.
The scholarships supported through these organizations can help cover a variety of educational expenses, including books, instructional materials, tutoring, academic programs, and other qualifying educational costs. Most importantly, the program is designed to benefit students regardless of whether they attend a public school, a private school, or are educated at home.
The legislation creates a unique opportunity for Kentucky’s public schools. School districts may establish or partner with Scholarship Granting Organizations to bring additional private resources into their communities. Local businesses, civic organizations, philanthropists, and individual taxpayers can work together to provide new educational opportunities for students without increasing state taxes or reducing existing education funding.
The General Assembly acted to ensure Kentucky would not miss this opportunity, joining other states across the nation. Rather than leaving available federal tax credits on the table, lawmakers chose to create a framework that allows charitable giving to directly benefit Kentucky students and families.
Now comes the most important part. HB 1 will only achieve its full potential if Kentuckians embrace it. Nonprofit organizations should consider becoming Scholarship Granting Organizations. Community foundations can help organize local efforts. Businesses can invest in the future workforce by supporting students in the communities where they operate. Churches, civic groups, and philanthropists can establish scholarship funds that expand opportunities for children. Individual taxpayers can participate simply by making a qualifying contribution and claiming the federal dollar-for-dollar tax credit.
This program represents the best of what can happen when government creates opportunities for communities rather than mandates from Frankfort or Washington. It relies on local leadership, charitable generosity, and community partnerships to meet the unique educational needs of students across the Commonwealth.
Organizations are now able to begin preparing to become approved Scholarship Granting Organizations. Kentucky’s list of SGOs will be submitted to the Internal Revenue Service in time to allow approved organizations to begin receiving qualifying donations during the 2027 tax year. Those contributions will be eligible for the federal tax credit when taxpayers file their 2027 federal income tax returns in 2028.
HB 1 created a remarkable opportunity for Kentucky. Now it is time for communities to put that opportunity to work.
Whether you are interested in establishing a Scholarship Granting Organization, supporting one that serves your community, or making a qualifying contribution as an individual taxpayer, you have the chance to help expand educational opportunities for Kentucky students. Together, we can keep charitable dollars in Kentucky, strengthen public, private, and home-school educational opportunities, and invest in the next generation of leaders who will shape the Commonwealth’s future.
As always, I can be reached anytime through the toll-free message line in Frankfort at 1-800-372-7181. You can also contact me via email at amy.neighbors@kylegislature.gov and keep track through the Kentucky legislature’s website at legislature.ky.gov.
(HD21 – News from the Office of Rep. Neighbors)