Resource Center · Glossary
Program Glossary
The program uses precise terms, and small differences matter — particularly the difference between the federal credit, the Scholarship Granting Organization that awards scholarships, and the private administrator that supports it.
A–Z
Terms and Definitions
- 90% scholarship-spend requirement
- The condition that an SGO spend at least 90% of its income on scholarships for eligible students.
- Administrator
- A private services provider, such as PSC, that supplies technology, operations, fundraising, compliance, and scholarship-administration support to an SGO. The administrator is not the SGO.
- Carryforward
- The unused portion of the credit that may be carried forward to later tax years, subject to the statutory carryforward period.
- Disqualified person
- A person to whom an SGO may not award a scholarship because of a relationship that the program prohibits.
- Education Freedom Tax Credit (EFTC)
- The federal income-tax credit established under Internal Revenue Code Section 25F for qualifying cash contributions to approved Scholarship Granting Organizations.
- Eligible student
- A K–12 student who meets the program's household-income and enrollment conditions, as verified by the awarding SGO.
- Federal Scholarship Tax Credit
- An alternate name used for the same federal credit established under Section 25F.
- Nonrefundable credit
- A credit that can reduce federal income-tax liability to zero but does not generate a refund beyond that liability.
- Qualified contribution
- A cash contribution to a qualifying SGO that meets the statutory conditions for the credit, made without earmarking for a particular student.
- Qualified education expense
- An expense category recognized by the program, such as tuition and fees, tutoring, instructional materials, or special-needs services.
- Renewal and sibling priority
- The required ordering that gives priority to returning scholarship recipients and qualifying siblings before other applicants.
- Scholarship Granting Organization (SGO)
- A qualifying 501(c)(3) nonprofit organization that receives qualified contributions and awards scholarships for qualified K–12 education expenses under the program.
- Separate accounts requirement
- The condition that an SGO hold qualified contributions in separate accounts and avoid commingling them with other funds.
- SGO list
- The roster of organizations a participating state has identified as eligible to receive qualified contributions in that state.
- State election
- A participating state's decision to opt in and identify the Scholarship Granting Organizations listed for the program in that state.
- White-label program page
- A participating SGO's own branded contribution, application, and provider pages, operated on PSC's platform under the SGO's name and policies.
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