Eight Groups Filed to Manage Kentucky Scholarship Tax Credits

The organizations aim to facilitate a new program allowing donors to redirect tax funds to student scholarships.

Updated on Sept. 21, 2026 in Scholarships

Isometric editorial illustration of a brass mortarboard resting on simple geometric blocks, representing the Kentucky scholarship tax program. — Eight organizations have applied to manage Kentucky’s new tax credit program, which allows taxpayers to redirect funds toward private and homeschool scholarships starting in 2027. AI Illustration. Upload story photo >

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Eight organizations have applied to become scholarship granting organizations in Kentucky ahead of a new tax credit program. Starting in 2027, the program will allow taxpayers to claim a credit for donations directed toward private and homeschool scholarships.

Why it matters

The program is designed to allow Kentuckians to redirect tax dollars to local schools rather than to Washington D.C. Supporters argue the credit will provide essential support for both rural and urban areas throughout the state.

Eligible families must have a household income no more than 300% of the area median gross income, a threshold that covers an estimated 90% of Kentucky students. Taxpayers can receive a one-for-one tax credit on up to $1,700 of donations.

The players

Andy Beshear

He is the current Governor of Kentucky who previously vetoed the legislation that created the scholarship tax credit program.

Kentucky Education Foundation

This organization is led by the state's 15 area development district directors and intends to offer payroll deduction options.

Special Education Lifeline

This nonprofit, based in Greenup County, formed in 2024 to participate as a scholarship granting organization.

The details

Most of the applicant organizations intend to serve religious and private schools, while two are based out-of-state. The initiative was passed by the legislature over the veto of Governor Andy Beshear and includes plans for automatic payroll deductions for public school employees.

The Special Education Lifeline nonprofit was formed in 2024.
A constitutional amendment was voted down by Kentucky voters in 2024.
The federal scholarship tax credit program begins on January 1, 2027.

Culture Shift

This development follows a pattern set by the Kentucky scholarship tax credit legislation. The shift toward private-sector scholarship management reflects a broader move to decentralize educational funding away from state and federal control.

Taxpayers can utilize these new credits to redirect their funds toward local educational institutions starting in 2027. Families should check their eligibility against the 300% median income threshold to determine if they qualify for these new scholarship opportunities.

The takeaway

The implementation of these tax credits offers a new mechanism for families to fund private education through private donations. Residents should keep track of approved organizations as the 2027 start date approaches to ensure their contributions qualify for the credit.