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An update from Kentucky Education Fund

Kentucky Education Fund

Oct 16, 2026

From Will Hodges, Adviser to the Kentucky Education Fund

I am emailing to provide an update on behalf of the Kentucky Education Fund. Once again, we are a statewide 501(c)(3) nonprofit organization established to provide scholarships for eligible K-12 educational expenses through the federal scholarship tax credit program beginning in 2027. The Fund seeks to connect eligible Kentucky students and families with expanded educational opportunities.

Rob Stafford and I have shared information with numerous educational institutions across the state. We continue to have daily conversations about how we can help schools maximize the upcoming federal tax credit program. We will continue to present at various events and schedule individual meetings over the next few months. If we have not yet spoken with your institution and you need a scholarship granting organization to help you navigate this opportunity, please reach out.

Kentucky’s Area Development Districts have been instrumental in launching this nonprofit organization. They were identified as a partner because of their collective representation across all 120 Kentucky counties. Executive directors representing Kentucky’s 15 Area Development Districts served as the Fund’s initial incorporators to establish the nonprofit corporation. If you would like to attend one of the scheduled Area Development District educational events, please review the current schedule below. These events are free of charge.

As local boards review our organization, they are beginning to return memorandums of understanding to partner with the Kentucky Education Fund. Once those are returned, please also include the educational institution's logo for use on our donation/application software platform. The portal will be live to accept donations on behalf of institutions on Jan. 1, 2027. Our goal is for the portal to be available for review by Dec. 1, 2027. Once agreements are returned, we will start sharing marketing materials (later this month) for distribution across your communities. We will also soon ask institutions for individuals they desire to have administrative viewing rights to their fund in our software program.

We are still waiting for final guidance on allowable expenditures. The Treasury Department and the IRS recognize that guidance describing the types of expenses permitted is critical to States, SGOs, eligible students, and other stakeholders. Such guidance will be issued separately under section 530. As indicated previously, the Treasury Department and the IRS are developing that guidance and treating its issuance as a high priority.

Nearly three in four tax filers can claim the tax credit. It is estimated that over 60% of tax filers can claim the full $1,700 credit. The donor pool is more than double earlier estimates. Any donor can reduce federal withholding on Form W-4 by the expected credit and give the same amount throughout the year. Kentucky is expected to have over 1.4 million eligible donors. If 10% of these donors participate, an estimated $218,000,000 will be generated for the federal tax credit program. If roughly 45% of eligible donors participate, the total increases to $1,000,000,000. We will continue to share, educate, and market this opportunity. In Kentucky, over 700,000 students are eligible for scholarships through this program. If you are a school, please do not miss this opportunity for your students. As time passes, more and more individuals will contribute. Please be positioned to capture these funds for your children.