Same Gift. One Saves $374. The Other Saves $1,700.
You and your spouse write a $1,700 check to a charity. You take the standard deduction. You're in the 22% bracket. That gift saves you $374 in taxes. That's the new above-the-line deduction for non-itemizers. $2,000 cap for joint filers. Your $1,700 fits under it.
Now picture the same $1,700 check. Same money. Different mailbox. This time, the IRS hands you back the whole $1,700. Dollar for dollar. Off your tax bill.
That's a credit. Not a deduction. The gap between those two numbers is the whole game. 4.5 times the tax benefit on the same gift.
The Tool
The One Big Beautiful Bill created a new line in the tax code called IRC §25F. It's called the Federal Scholarship Tax Credit. Here's how it works. You send cash to a Scholarship Granting Organization. An SGO. That's a nonprofit that gives K-12 scholarships. You get a dollar-for-dollar tax credit. Up to $1,700 per person. Married couple filing jointly? $3,400.
It works whether you itemize or take the standard deduction. That alone makes it strange. Most charitable tax breaks vanish the second you stop itemizing. This one doesn't care.
And you can give to an SGO in any of the 27 states that opted in. You don't have to live there. Texas. Florida. South Dakota. Pick one.
The Wall
The same bill that built this credit also built a wall. Same piece of legislation. Two rules sitting right next to each other.
Starting in 2026, there's a new 0.5% AGI floor on charitable deductions. Not for you on the standard deduction. The floor only touches itemizers.
But look at what it does to them.
If their adjusted gross income is $300,000, the floor is $1,500. Meaning the first $1,500 they give to charity produces zero deduction. Nothing. Dead weight.
A couple at that income tithing $5,000 a year to their church just lost $360 in tax benefit. The floor ate it.
The Escape
Now read one sentence from the statute. §25F(e):
Any qualified contribution for which a credit is allowed under this section shall not be taken into account as a charitable contribution for purposes of section 170.
I mean. Read that again.
The FSTC does not live in §170. That's the part of the code where charitable deductions live. Where the floor lives. Where all the limits and phase-outs and headaches live.
The FSTC sits in §25F. A different room. The floor can't reach it. The floor can't even see it.
Your $1,700 SGO gift never touches §170. It never counts against the floor. It never competes with your church donations.
Right.
It's not a stimulus check. It's not a tax cut.
Nor is it the $1,000 "Trump Accounts" for American newborns.
Trump calls it "American brilliance at its best"… and the CEO of Coinbase says it's opening up a "golden age for freedom" in America.
Jeff Brown was consulted by members of Congress to help shape this "gift."
The Stack
This is where it gets good for anyone already doing Qualified Charitable Distributions.
Quick refresher. If you're 70½ or older, you can send up to $111,000 straight from your IRA to a charity. It counts toward your required minimum distribution. It never hits your AGI. That's channel one.
Channel two is the FSTC. Cash from your bank account. Goes to an SGO. Comes back as a credit on your return.
Different pockets. Different lines on the return. Different sections of the code.
The QCD cuts your income. The FSTC cuts your tax. They don't overlap. They don't cancel. They stack.
So picture a retired couple. They send $20,000 from their IRAs to their church via QCD. Income drops. AGI drops. Then they write a $3,400 check to an SGO in Florida. Tax bill drops by $3,400. Two doors. Both open. Both legal. Both work at the same time.
The gold accounting trick Washington hoped you'd never notice.
In 1934, the government executed a legal maneuver that transferred billions in wealth overnight.
Most Americans had no idea it was coming.
A small group who saw it early walked away wealthy.
Everyone else paid for it.
Trump has the same legal authority today. Advisors close to the administration believe he's considering using it. If he does, the transfer happens fast — and the window to be on the right side of it is already closing.
We put together a free report on exactly what this move is, why the timing points to now, and the one step ordinary Americans can take to position themselves before it happens.
It costs nothing. Takes 30 seconds to request.
The people who moved early in 1934 didn't have a warning.
You do.
The Fine Print
Cash only. Write a check or send a transfer. That's it.
First contributions start January 1, 2027. You claim the credit on your 2027 return, filed in 2028.
If your tax bill is too small to use the full credit, unused amounts carry forward for five years. So a low-income year doesn't waste it.
Look, Treasury hasn't dropped final guidance yet on a couple of details, including the married-filing-jointly cap. The per-taxpayer reading says $3,400. Watch for the ruling.
One more thing. Senate Democrats introduced S. 4297 in April with 31 cosponsors to repeal this before it launches. Long odds in this Congress. But Congress changes.
The code built two doors. Most people will walk through one. The other is in §25F.
