What does Preamble of High-Quality Charter Schools Act do?

This bill proposes to amend the Internal Revenue Code of 1986. The proposed amendment would allow a tax credit for charitable donations. These charitable donations would be specifically for the creation or expansion of charter schools.

What does SHORT TITLE. of High-Quality Charter Schools Act do?

This bill is formally titled the High-Quality Charter Schools Act.

What does TAX CREDIT FOR CONTRIBUTIONS TO ELIGIBLE CHARTER SCHOOL of High-Quality Charter Schools Act do?

This section amends the Internal Revenue Code to create a new tax credit for contributions to eligible charter school organizations. The credit allows individuals who are U.S. citizens or residents to claim 75% of qualified contributions made to these organizations. The maximum credit allowed is the greater of 10% of the taxpayer's adjusted gross income or $5,000. An 'eligible charter school organization' must be a 501(c)(3) organization, a charter management organization, or a charter school that meets specific criteria related to grant funding, student performance, or state selection. Qualified contributions are defined as charitable contributions in the form of cash or marketable securities for the creation or expansion of charter schools. Contributions taken into account for the credit cannot be used as charitable contributions for purposes of section 170. Unused credit can be carried forward to the succeeding taxable year, but no later than the fifth taxable year after the credit arose. The credit is subject to a 'volume cap' established under the High-Quality Charter Schools Act.

What does FAILURE OF ELIGIBLE CHARTER SCHOOL ORGANIZATION TO MAKE of High-Quality Charter Schools Act do?

This section amends the Internal Revenue Code of 1986 by adding a new subchapter, 'Eligible Charter School Organizations,' under Chapter 42. It establishes a requirement that eligible charter school organizations must expend a certain amount of qualified contributions before an expenditure deadline. If an organization fails to meet this requirement, contributions made in the following year will not be treated as qualified contributions for purposes of section 25F. The 'required expenditure amount' is generally 100% of qualified contributions, adjusted for reasonable administrative expenses and potential carryovers. A 'safe harbor' allows administrative expenses up to 10% of total qualified contributions to be considered reasonable if related to charter school creation or expansion. Organizations can carry over up to 15% of qualified contributions to the following taxable year. The 'expenditure deadline' for qualified contributions is the first day of the fifth taxable year following the year the contributions were received. The term 'expenditures' includes formally committed amounts, even if not yet spent.

What does VOLUME CAP. of High-Quality Charter Schools Act do?

This section establishes a volume cap of $5,000,000,000 for tax credits under section 25F of the Internal Revenue Code of 1986, starting in calendar year 2026. Initially, $10,000,000 in tax credits are allocated to each state, available for individuals residing in that state to claim credits for qualified contributions. Any unused state allotments are carried over to the following year and added to the amount available nationwide. The nationwide volume cap can increase by 5% if the Secretary determines that 90% or more of the available credits are claimed in a given year. The volume cap is applied on a first-come, first-served basis, based on the date of the qualified contribution. The Secretary is required to develop a real-time system to track qualified contributions for credit claims.

What does ORGANIZATIONAL AND PARENTAL AUTONOMY. of High-Quality Charter Schools Act do?

This section establishes a prohibition on regarding eligible charter school organizations as acting on behalf of governmental entities due to participation in this Act. The Act aims to allow eligible charter school organizations maximum freedom to provide for the needs of students without governmental control, to the extent permissible by law. The definitions of 'charter school' and 'eligible charter school organization' are derived from section 25F(c) of the Internal Revenue Code of 1986, as added by section 2(a) of this Act.

What does EFFECTIVE DATE. of High-Quality Charter Schools Act do?

This section establishes the effective date for amendments made by this Act. The amendments will apply to taxable years beginning after December 31, 2025.

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High-Quality Charter Schools Act

Last updated: 3/19/2026 · Introduced: 5/20/2025

Author: Tim Scott (R-SC)

TL;DR (AI)

This bill creates a new tax credit for individuals who donate to eligible charter school organizations, allowing them to claim up to 75% of their contribution, capped at $5,000 or 10% of their adjusted gross income.
Eligible charter school organizations are required to spend qualified contributions within five years, with a safe harbor for reasonable administrative expenses and carryovers, or risk losing the credit for subsequent contributions.
The bill establishes a $5 billion national volume cap for these tax credits, initially allocating $10 million per state, with potential increases based on credit utilization.

119th Congressin committeeHR. 2798(In Committee)Official page

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Includes provisions on preamble, short title., and 5 more.

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