Making Music Matter For Kids Scholarship Program 2027
Congress Enacts First-Ever Federal Tax Credit for Education Scholarships
Discover how the One Big Beautiful Bill Act & ECCA Tax Credit empower donors to support 501(c)(3) community scholarship programs. Make a difference in music education for kids while enjoying new tax benefits!
The One Big Beautiful Bill Act paves the way for new school choice opportunities starting in 2027
Big changes in tax law are opening up new opportunities for donors to save on taxes while supporting meaningful causes like music education and scholarships for kids. Two key pieces of legislation — the One Big Beautiful Bill Act and the Educational Choice for Children Act (ECCA) — offer new benefits to individuals and businesses who contribute to qualified 501(c)(3) organizations like ours.
Understanding New Giving Incentives: The One Big Beautiful Bill Act & ECCA
After years of debate and incremental progress at the federal level, July 2025 marked a turning point in the national conversation on educational choice. President Donald Trump signed the One Big Beautiful Bill Act into law—a sweeping package that included the most ambitious federal education tax credit program to date.
Here’s what you should know 👇
What Is the One Big Beautiful Bill Act? The One Big Beautiful Bill Act, passed in 2025, is a large federal tax reform package that affects individuals, businesses, and nonprofits.One of the most exciting changes for donors is the enhanced charitable giving incentives, making it easier for more people to receive tax benefits for supporting community-based organizations.Key Donor Benefits Under This New Law:
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💰 Above-the-Line Deduction for Everyone
Even if you don’t itemize, you can now deduct up to $1,000 (single) or $2,000 (married filing jointly) for qualified charitable cash donations. -
📈 Higher Deduction Limits for Itemizers
If you itemize your taxes, you can continue to deduct charitable contributions up to 60% of your Adjusted Gross Income (AGI) — making it easier to support causes you love while lowering taxable income. -
📊 New “Floor” for Itemizers
For itemizers, only donations that exceed 0.5% of your AGI can be deducted. This primarily impacts smaller contributions, but encourages donors to plan strategically. -
🏢 Corporate Giving Changes
Corporate donors now have a 1% floor on deductions, but can still deduct up to 10% of taxable income for qualifying gifts, with unused amounts carried forward up to five years. -
⭐ Scholarship Tax Credit (NEW)
A new nonrefundable federal tax credit is now available for contributions to eligible scholarship-granting organizations (like community scholarship programs) — which ties directly into the Educational Choice for Children Act (ECCA).
What Is the Educational Choice for Children Act (ECCA)?
The Educational Choice for Children Act (ECCA) is designed to expand educational opportunities for students by empowering individuals and businesses to contribute to approved scholarship-granting organizations.Here’s How It Works:
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✍️ When you make a contribution to a qualified scholarship organization, you can claim a dollar-for-dollar federal tax credit for your donation — up to $1,700 per tax return.
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🧾 Unlike a deduction (which lowers taxable income), a credit reduces your actual tax bill — making it a powerful incentive.
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🙌 Both individuals and businesses can participate.
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📌 The credit is nonrefundable, meaning it can reduce your tax liability to zero but won’t generate a refund beyond that.
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🏫 Your donation helps fund scholarships for students (often from low- to middle-income families) to access better educational opportunities — while giving you a direct tax benefit.
Example: How The ECCA - Education Choice For Children Act Works
The One Big Beautiful Bill Act creates an individual, dollar-for-dollar tax credit of up to $1,700 per individual taxpayer for contributions to state-approved, federally recognized non-profits that distribute 90% of the $1,700.00 scholarship to eligible children. There is no cap on the total amount of donations and the program requires states to opt in. The program will start on January 1, 2027.
Why This Matters for Our Community Scholarship Program
As a 501(c)(3) community scholarship-granting organization, donations to Making Music Matter for Kids Inc. qualifies us for both the new charitable deduction rules and the ECCA federal tax credit.
Donors can now enjoy greater tax deductions under the One Big Beautiful Bill. Individuals can deduct up to 60% of their adjusted gross income for cash gifts, while private organizations allow 30%. With the ECCA, donations to a 501c3 SGO result in a 100% tax return, supporting children's music education. This is not just good; it's an investment in our greatest asset—our children through music.
This means donors can:
Family Qualifications Information: To qualify for a scholarship
Qualifications:
To qualify for the scholarship families must have a child enrolled in a public school and be under 300% of their Area’s Income limit. So another words the maximum allowable income to get the scholarship is three times the calculated income for that particular area
For example, let's say that the income for your region is $100,000, your household could earn up to $300,000 and still be eligible for the scholarship. This is the majority of family incomes across the country, estimated to be around 85-90% of the general population that will be eligible to receive the scholarship.
Our Scholarship program is no longer just for low-income. No more financial constraints, limited access to quality music education.
Families will no longer face judgment for seeking assistance for their children, perceived as being unable to provide.
By the way music education should have always been provided through tax payer dollars but the majority of schools have failed and no parent wanting to better their childs education should ever be subjected to feeling this way, and this bill puts tax dollars back into families to choose what's best for their children
State-Dependent: States must voluntarily elect to participate to receive this funding. If a student is in a state that decides not to participate in the program, then none of the students in that state would be eligible to receive scholarship funds.
Regardless of state participation, Our organization is registered through the federal government as a Community Based 501c3 music organization and only community based nonprofits can participate in the ECCA. As a community organization we can receive support from a wide variety of sources, including many individuals, government agencies, grants, and other public charities.
Under the One Big Beautiful Bill donors can now receive a much higher tax-deduction from community organizations. For cash gifts, individuals can deduct up to 60% of their adjusted gross income. Under private organizations, donors have a much lower deductible rate. Cash donations are now limited to 30% of the donors Income.
Schools Retain Choice: Donors cannot mandate that their contribution go to a particular family. Similarly, parents cannot assign their tax credit directly to their child’s educational expenses. Instead, the SGOs will be charged with independently determining students’ eligibility. The SGOs must be independent 501(c)(3) entities that are not affiliated with a school and must meet other criteria set forth in the law.
No Caps: The law does not have any caps the number of families that can participate in the program or the total scholarship amounts available. Effective Date: The federal tax credit for eligible donations takes effect starting in January 2027. Stay Tuned: The federal government is required to draft regulations and other guidance detailing how the program will operate, including recordkeeping and reporting obligation, as well as enforcement of a state’s certification of SGOs.
How Will This Affect Private and Independent Schools?
The answer to this question will largely depend on whether your state’s Governor opts in to this program. If your school is in a state that does not currently have a school choice program in place, a state can still choose to participate if an eligible SGO is developed. If your state chooses to participate, your school may see increased applicants. States need to elect participation in time for the initial scholarship and donation cycle (i.e., before the program launches in 2027). Stay tuned for an announcement from officials in the state in which you operate to determine whether your school will be eligible.
Ready to Learn More or Plan Your Year-End Giving?
This is an exciting time to support kids, music, and education — Unlocking Musical Potential for Children Across The Country while taking advantage of powerful new tax incentives.
Together, we can make a difference in the lives of kids and help them reach their full potential. Thank you for your interest in Making Music Matter For Kids Inc.