Tax Deduction vs. Tax Credit — What Donors Really Need to Know

February 24, 2026

When you give to support K–12 scholarships, not all tax incentives are created equal — and knowing the difference can help make your gift go further.

What a Tax Deduction Does

A tax deduction lowers the amount of your income that’s subject to tax.

So if you donate $1,000 and you’re in a 24% tax bracket, that gift might reduce your tax bill by roughly $240. It’s helpful — but the value depends on your tax rate and whether you itemize your deductions.

What a Tax Credit Does

A tax credit is way more powerful: it reduces your tax bill dollar for dollar.

So a $1,000 tax credit knocks $1,000 off the taxes you owe. Simple, straightforward, predictable — and often worth much more than a deduction.

Why This Matters for Education Giving

Under the new Education Freedom Tax Credit (effective 2027):

Donors can receive a federal tax credit up to $1,700 for contributions to eligible Scholarship Granting Organizations (SGOs).
That means money you would have sent to the IRS can instead directly fund scholarships for K–12 students.
Unlike a deduction — which just affects taxable income — this credit shrinks your actual tax bill one-for-one.

The Bottom Line for Donors

If you care about maximizing your financial impact while supporting education choice, a tax credit trumps a tax deduction — period. You’re not just giving — you’re strategically directing dollars that benefit students and your own tax situation in a more efficient way.

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Scholarships at Work: Faith Academy Spotlight

February 19, 2026

When donors give to the Alabama Opportunity Scholarship Fund, they’re not just funding tuition. They’re opening doors to schools like Faith Academy in Mobile — places where students are known, supported, challenged, and grounded in faith. Faith Academy is a private Christian school committed to developing the whole child: academically, spiritually, and personally. Excellence isn’t just a tagline there. It’s woven into the classroom, the stage, the football field, and the daily rhythms of school life. And for many families, access to that kind of education is only possible because of scholarship support.

Who Can Claim the Education Freedom Tax Credit?

February 16, 2026

What Is the Education Freedom Tax Credit? The Education Freedom Tax Credit (EFTC) is a federal tax credit that lets Alabama taxpayers reduce their federal income tax liability by donating to a qualified Scholarship Granting Organization (SGO) like the Alabama Opportunity Scholarship Fund. When you give, you get a dollar-for-dollar federal tax credit, not just a deduction, for your contribution. Key benefit: Donate up to $1,700 per individual and cut your federal tax bill by the exact same amount. This makes the EFTC one of the most impactful tools for supporting school choice and education scholarships in Alabama.

What the Education Freedom Tax Credit Means for Alabama Families and Donors

February 11, 2026

Big changes are coming to school choice and Alabama families stand to benefit in a major way. The new Education Freedom Tax Credit , launching in 2027, creates a federal tax credit for people who donate to scholarship-granting organizations like the Alabama Opportunity Scholarship Fund (AOSF) . Translation: taxpayers can redirect part of their federal tax bill to fund K–12 scholarships for students right here in Alabama. This isn’t a policy talking point. It’s a real, practical opportunity to expand educational access for families who need options. Let’s break it down.

My Why: Sherri's School Choice Story

January 31, 2026

Sherri Rowton, Development Director, shares why she supports school choice for all Alabama families. I was fortunate to grow up in a family where education was always a top priority. My mother was a first-generation college graduate who spent her career as an elementary school teacher. My father overcame a difficult childhood by enlisting in the military, where he earned a bachelor’s degree and two graduate degrees. From an early age, I saw how education can open doors and change the trajectory of a life. I later spent two decades as a fundraiser for Auburn University, where I witnessed firsthand the transformative power of education. Our generous donors gave so that others could earn an education—something no one could ever take away from them. But that foundation must begin well before college, equipping students for lives in which they, and their families, can truly flourish. That is why Alabama Opportunity Scholarship Fund is so invaluable. Through the generosity of our supporters, we empower parents to choose the school and learning environment that best fits the needs of their children—whether public, private, homeschool, or microschools. My own family experienced the difference the right school can have. Our local public school provided my older son with exactly what he needed to succeed; he is now a college graduate with a full-time career. My younger son, however, needed an environment with more structure than his school could provide. We were able to find a setting that better met his needs, and he is now a college senior—an outcome I sincerely doubt would have been possible without that change. It is my honor and privilege to work alongside such generous donors who make opportunities like these possible for families across Alabama. Education freedom is truly a win-win for families, for our donors, and for the future of our state.