HR-2798 — High-Quality Charter Schools Act

YourVoice.Now Summary

Corporate BenefitsTransparency & Accountability

Donors to top-rated charter schools would get 75% of the gift back as a tax credit, capped at $5 billion a year.

Corporate Benefits

Tax credit for charter school donations — Donors recover 75 percent of the contribution
Credit ceiling for high earners — Set at 10 percent of adjusted gross income when above $5,000
Volume cap — $5 billion in credits a year, growing 5 percent once 90 percent is claimed

Transparency & Accountability

Audit requirements — Recipient organizations must obtain annual independent financial audits
Credit tracking — Treasury must track claimed credits and update availability in real time
Government control over recipients — Organizations given maximum operating freedom under the Act

The details

Donors would get a large federal tax credit for giving to certain charter school groups. The credit equals 75 percent of the donation. Each donor's credit is capped at $5,000, or 10 percent of their adjusted gross income, whichever is larger. Donors could not also claim the usual charitable deduction for the same gift. Unused credit could carry forward up to five years. Recipients must be nonprofit charter schools or charter management organizations. They must either hold a federal expansion grant or rank in their state's top 10 percent for student performance. They must keep the donations in separate accounts, get annual independent audits, and spend the money within five years. Nationwide, credits are capped at $5 billion a year starting in 2026. Ten million dollars is set aside per state, and the rest is first-come, first-served.

Congressional Summary

High-Quality Charter Schools ActThis bill establishes a federal tax credit for 75% of the qualified contributions of cash or market securities made by an individual to an eligible charter school organization to create or expand the charter schools operated or managed by the organization. (Limitations apply.)The bill limits the tax credit to the greater of $5,000 or 10% of the individual’s adjusted gross income. The tax credit is not refundable, but any amount of the tax credit that exceeds an individual’s tax liability for the tax year may be carried forward for up to five tax years.Further, the bill establishes an annual $5 billion volume cap (which must be increased under certain circumstances) from which $10 million must be distributed to each state for allocation of the tax credit to individuals residing in the state. The remaining amount of the volume cap must be allocated to individuals on a first-come, first-serve basis. The bill requires the Internal Revenue Service (IRS) to develop a system for tracking qualified contributions in real time.Under the bill, an eligible charter school organization generally is required to spend all of the qualified contributions (less reasonable administrative expenses) within a certain amount of time. If the IRS determines that an organization has failed to meet such spending requirements, the tax credit is not allowed for contributions to the organization for one year after the date of the determination.

Legislative Subjects

Charitable contributionsElementary and secondary educationIncome tax creditsStudent aid and college costsTax-exempt organizations

Details

Congress: 119th
Chamber: House
Status: summarized
Action: Introduced in House
Action Date: 2025-04-09
Date Added: 2026-07-25
Source: Congress.gov →

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