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HB 88

AN ACT relating to the qualified elementary and secondary education scholarship federal tax credit.

2026 Regular Session Introduced by Kim Banta and 14 co-sponsors

Kentucky will annually participate in the federal education scholarship tax-credit program, listing eligible SGOs and reporting them to the federal government.

to Primary and Secondary Education (H)
#auditorofpublicaccounts #charitableandnonprofitorganizations #education #elementaryandsecondary #finance #federallawsandregulations
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Bill Summary · HB 88

Summary of HB 88 (2026 Regular Session, Kentucky)

Purpose and intent

HB 88 creates a framework for Kentucky to participate in the federal qualified elementary and secondary education scholarship tax credit program (as established under 26 U.S.C. § 25F and any successor). The bill designates state officials and processes to identify eligible scholarship-granting organizations (SGOs) and to report the state’s participation to federal authorities.

Key provisions

  • Participation in the federal program (annual):
    The Commonwealth affirmatively elects to participate in the federal tax credit program for qualified elementary and secondary education scholarships each calendar year. It also requires identification of SGOs located within Kentucky.

  • Designation of reporting official:
    The Auditor of Public Accounts is designated as the official responsible for:

    • Reporting Kentucky’s election to participate in the 26 U.S.C. § 25F program.
    • Submitting to the U.S. Treasury the list of Kentucky-based SGOs that meet the § 25F requirements.

  • Public list and guidance (on Auditor’s website):
    The Auditor must maintain and publish a list of SGOs on the website. The listing must include:

    • The applicable administrative regulations promulgated by the Auditor.
    • Other guidance from federal authorities (U.S. Treasury/IRS) related to the program.

  • Regulatory authority and application process:
    The Auditor may promulgate administrative regulations under KRS Chapter 13A to establish:

    • The application process for an entity to qualify as an SGO.
    • Documentation required for inclusion on the Kentucky list of SGOs.

  • Interagency cooperation:
    The Auditor may enter into agreements with other state agencies to aid in implementing the section.

Who/what is affected

  • Entities:
    Kentucky-based scholarship-granting organizations (SGOs) that participate in or qualify for the federal tax-credit program under § 25F.

  • State officials:
    The Auditor of Public Accounts acts as the central administrator and point of contact for reporting to the federal government and for maintaining the SGO list.

  • Public access:
    The Auditor’s website will host the list of eligible SGOs and related regulatory guidance.

Procedural and timeline aspects

  • Annual election and reporting:
    The bill requires an annual Kentucky election to participate in the federal tax credit program, with the Auditor submitting the list of qualifying SGOs to the federal authorities under 26 U.S.C. § 25F(g).

  • Regulatory development timeline:
    The Auditor is authorized to promulgate regulations to implement the process (application, documentation, and criteria for SGOs) under Kentucky’s administrative code rules (KRS Chapter 13A).

  • Effective details:
    The text provided does not specify an effective date beyond standard legislative passage; it outlines ongoing, annual participation and ongoing publication/administrative processes.

Notable details

  • The bill aligns Kentucky’s participation with federal tax-credit mechanisms for education scholarships, but Kentucky’s action is administrative and administrative-regulatory in nature, focusing on state listing, oversight, and reporting rather than creating a new state tax credit program.

  • A broad list of co-sponsors from both chambers indicates legislative support, but the bill’s concrete fiscal impact or beneficiary details (e.g., dollar amounts, cap on credits) are not specified in the text provided.

If you want, I can add a brief FAQ section addressing common questions (e.g., “Can Kentucky residents claim a tax credit?”, “What qualifies as an SGO under Kentucky law?”) based on the federal program and typical state implementation patterns.

Compiled from official sources — confirm details with the bill’s official record.

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