A new federal education tax credit has been created under the Educational Choice for Children Act (ECCA), opening the door to a potentially significant new source of education-related funding for states. While the legislation has been enacted, the program is still in its early implementation phase, with critical decisions being made now that will determine how it works in practice.

The U.S. Department of the Treasury and the Internal Revenue Service are currently developing the rules that will govern the program, including how Scholarship Granting Organizations (SGOs) are defined, approved, and overseen. These decisions will shape whether and how out-of-school time (OST) learning opportunities – such as afterschool and summer programs – are included as eligible educational supports.

As part of this process, the Indiana Afterschool Network (IAN) recently submitted formal public comments urging federal policymakers to clearly affirm the eligibility of OST and extended learning programs. IAN also emphasized the importance of implementation approaches that are practical, transparent, and workable for community-based nonprofits, including smaller organizations with deep local roots.

In parallel, IAN has been selected to participate in a national Scholarship Granting Organization (SGO) Start-Up Accelerator. Through this cohort, IAN is learning alongside peers from across the country about emerging models, accountability structures, and policy considerations, with a focus on ensuring any future approaches are community-centered and aligned with the realities of OST providers.

If Indiana ultimately opts into the program, the opportunity could be substantial. Even modest participation by taxpayers could redirect tens of millions of dollars annually toward education-related supports across the state – without requiring new public spending. The scale and structure of that opportunity, however, will depend heavily on federal guidance and state-level decisions still to come.

IAN’s role in this moment is to engage early, translate complex policy into implications for the field, and help ensure Indiana is prepared as decisions take shape. We will continue to share updates as federal guidance is finalized and as state conversations evolve.