OKLAHOMA CITY – Rep. Denise Crosswhite Hader, R-Piedmont, today is reminding Oklahomans they can opt-in on a federal income tax credit next year for individual contributions to scholarship granting organizations (SGOs). Funding is to be used for scholarships for elementary and secondary education expenses.

Crosswhite Hader is the House author of House Bill 3704, which recently was signed into law by the governor. She said the federal program is similar to the Oklahoma Equal Opportunity Education Scholarship program, a state tax-credit program that supports scholarship efforts in Oklahoma.

HB3704 declares the state's intent to participate to the fullest extent permitted by federal law in the federal Education Freedom Tax Credit. It also directs the governor to formalize the state's election and required agreements and designates the Oklahoma Tax Commission (OTC) as the administering agency. State agencies, including the Tax Commission and the governor, are prohibited from adopting rules or regulations that go beyond what federal law requires when implementing this act.

"This allows Oklahoma taxpayers the freedom to donate to a registered scholarship granting organization, whether they have children or not," Crosswhite Hader said. "The funding from these organizations will then be available for eligible Oklahoma students to attend the school of their choice or to help pay for other educational expenses, such as tutoring or academic materials. Every parent should have the right to determine the education that is best for their children, and taxpayers should be able to support such choices with their own tax dollars." 

Gov. Kevin Stitt previously signed an executive order opting Oklahoma into the federal program. Crosswhite Hader said this legislation just puts this in statute so going forward this will be available to all willing taxpayer participants.

The tax credit is part of the federal One Big Beautiful Bill Act signed into law last year by President Trump. The act provides for an individual, dollar-for-dollar tax credit of up to $1,700 per individual taxpayer or $3,400 for a joint federal return for contributions to state-approved, federally recognized nonprofits that distribute private-school scholarships to eligible children, defined as students from households earning no more than 300% of their county’s median income. 

States must proactively opt into the federal tax credit program, which takes effect Jan. 1, 2027. Oklahoma is now one of 27 states currently opted in.

Under HB3704, the OTC will be required to identify and register eligible SGOs, maintain and submit their list to the U.S. Treasury, develop rules, forms and procedures to administer the list, and ensure compliance with federal guidelines, including contribution reporting and scholarship distribution.

The Oklahoma Council on Public Affairs recently reported the tax credit could generate an additional $24 billion in education funding annually nationwide. Every $1 billion in scholarships could fund tuition at a school of choice for 77,000 students or cover tutoring for more than 300,000 students.