A new federal credit for gifts to scholarship granting organizations takes effect on Jan 1, 2027. A taxpayer can claim a dollar-for-dollar credit of up to $1,700, or $3,400 for a married couple filing jointly. Utah has opted in and appears on the IRS list of participating states for 2027, according to ACE Scholarships, and Ballotpedia listed Utah among 27 opted-in states as of March 18, 2026.
ACE Scholarships is named as a scholarship granting organization for Utah. We have not been able to confirm the full list of Utah organizations, so families should ask any group that says it is participating to show where it appears on the state's list.
For Salt Lake families this is a donor credit first. Grandparents or employers in the valley can direct gifts to a participating organization and reduce their federal tax, and families then apply to that organization. How it will interact with Utah Fits All or Carson Smith eligibility has not been set out in anything we could verify, so treat it as a new and separate source for 2027.
Combining it with other sources
This source can sit alongside a school's own aid, parish or member rates and payment plans. The one hard rule in Utah is that a child holds only one of Utah Fits All, the original Carson Smith Scholarship or the Carson Smith Opportunity Scholarship at a time, so each child takes one path and a sibling may take the other.
Common questions
Has Utah opted into the federal scholarship tax credit for 2027?
Utah has opted into the federal scholarship tax credit and is on the IRS list of participating states for 2027, according to ACE Scholarships, and Ballotpedia listed Utah among 27 opted-in states in March 2026. The credit starts Jan 1, 2027 and is worth up to $1,700 per taxpayer, or $3,400 for a married couple filing jointly.
How can Salt Lake grandparents use the federal scholarship tax credit?
Salt Lake grandparents who owe federal income tax can give to a participating scholarship granting organization starting Jan 1, 2027 and claim the federal scholarship tax credit, up to $1,700 each or $3,400 for a married couple. The organization, such as ACE Scholarships, awards scholarships under its own rules, and the grandchild's family applies to it directly.
Which organizations give federal tax credit scholarships in Utah?
ACE Scholarships is named as a scholarship granting organization for Utah under the federal scholarship tax credit that begins in 2027. A complete list of Utah organizations had not been published in a source we could verify as of October 2026, so Salt Lake families should ask any organization to confirm its participating status before applying or giving.