Virginia Education Funding Programs: Education Improvement Scholarships and the 2027 Federal Credit Explained

Quick answer: Virginia’s main education funding program for parents is the Education Improvement Scholarships Tax Credits (EISTC) program. Donors who give to approved scholarship foundations receive a Virginia tax credit worth 65 percent of the donation, and the foundations award scholarships for private K-12 schools and nonpublic pre-K programs. Students qualify if their family income is no more than 300 percent of the federal poverty guidelines, or 400 percent for a student with an IEP, and they meet one of several enrollment conditions. Scholarships are generally capped at the state share of per-pupil Standards of Quality funding for the child’s locality. Virginia has also opted in to the federal scholarship tax credit that starts January 1, 2027.

Virginia does not have a state education savings account or a voucher paid from the state budget. Instead, it relies on a tax credit program that has operated since 2013, plus a new federal credit coming in 2027. For many families the practical starting point is not a state website at all, but the admissions office of a participating private school.

This guide walks through eligibility, award amounts, the application path and what homeschooling families should know. For a national comparison, see our guide to state education funding programs.

Sources: Virginia Department of Education (VDOE), Education Improvement Scholarships Tax Credits Program, Information for Parents page; Code of Virginia, Title 58.1, Chapter 3, Article 13.3 (Education Improvement Scholarships Tax Credits) and section 22.1-254.1 (home instruction); IRS, Federal Scholarship Tax Credit participating states list (updated October 22, 2026). Income limits follow federal poverty guidelines, which change every year. This is general information, not legal or tax advice. Last verified October 2026.

Virginia's Program in One Table

Feature	Education Improvement Scholarships Tax Credits (EISTC)
Type	Tax-credit scholarship
Funded by	Donations from individuals and businesses to approved scholarship foundations
Donor credit	65 percent of the donation; individuals must give at least $500 and earn credits only on the first $125,000 donated in a taxable year
Statewide credit cap	$25 million in credits per fiscal year, issued first come, first served
Income limit for families	300 percent of federal poverty guidelines; 400 percent for a student with an IEP
Scholarship size	Generally up to the state share of per-pupil Standards of Quality (SOQ) funding for the locality where the child lives; some special education schools can award more
Where to start	A participating nonpublic school or pre-K program

If you are new to these terms, our article on ESA vs. voucher vs. tax-credit scholarship explains the differences.

Who Qualifies for an EISTC Scholarship

The income test

VDOE states that scholarships are available for students whose family income does not exceed 300 percent of the federal poverty guidelines, and that the limit is 400 percent for students with disabilities who have an individualized education program. The poverty guidelines are published each year by the U.S. Department of Health and Human Services, so the dollar limit for your household size changes annually. Ask the scholarship foundation which year’s guidelines and which income documents it uses.

The enrollment test

The Code of Virginia defines an eligible “student” as a Virginia resident who meets at least one of these conditions:

1. enrolled in and attended a Virginia public school for at least half of the current school year;
2. enrolled in and attended a Virginia public school for at least half of the school year immediately before receiving the scholarship;
3. is a prior recipient of a scholarship foundation scholarship;
4. is eligible to enter kindergarten or first grade; or
5. lived in another state the year before receiving the scholarship and did not attend a Virginia nonpublic school for more than half of that year.

In practice, this means the program is designed mainly for families moving from public school to private school, children starting school, families new to Virginia and students renewing a scholarship. A child who has been in a Virginia private school for years without a scholarship generally does not meet these conditions.

Under the current Code, a student with an IEP written under IDEA can qualify as an “eligible student with a disability” without meeting the general enrollment conditions above, subject to the income limit VDOE lists. Amended definitions in the Code are set to apply to taxable years beginning January 1, 2028, so check VDOE’s page for any changes before the 2028 school year.

Pre-K children

The program also funds scholarships for at-risk four-year-olds who cannot get services through Head Start or the Virginia Preschool Initiative and who attend a qualifying nonpublic pre-K program. Family eligibility for pre-K follows the same 300 and 400 percent income limits, with additional paths for homeless children and children whose parent or guardian did not graduate from high school.

How Much a Scholarship Can Pay

VDOE explains that scholarships “are generally limited to the state share of per-pupil Standards of Quality funding” for the locality where the student lives, or the state share of per-pupil Virginia Preschool Initiative funding for pre-K. Attendees of some special education schools can receive larger scholarships. VDOE posts a spreadsheet of SOQ amounts by locality for each program year, including 2026-27.

Two points follow from that rule:

• The cap depends on where you live. Two families in different counties can face different maximums.
• The cap is a ceiling, not a promise. Each scholarship foundation decides actual awards based on what it raised and how many students it serves.

Under the Code, scholarships cover qualified educational expenses, defined as school-related tuition and instructional fees and materials, including textbooks, workbooks and supplies used only for school work.

How to Apply

VDOE says the first step “is to contact a participating non-public school or pre-kindergarten program.” Its parent page includes an interactive map of participating schools and programs with contact details. A practical sequence:

1. Make a short list of schools. Use VDOE’s map to see which nearby schools participate.
2. Ask each school which scholarship foundations it works with. Some foundations serve a single school; others serve a network or a region.
3. Check your eligibility. Confirm your household income against the current poverty guideline multiple and confirm which enrollment condition your child meets.
4. Gather documents. Expect to provide income documentation, proof of Virginia residency and, if relevant, proof of prior public school attendance or a copy of an IEP.
5. Apply early. Foundations award scholarships from donations they have received, and the program’s $25 million statewide credit cap limits the total available each fiscal year.
6. Plan for the rest of tuition. Compare the likely award to the school’s tuition and fees, and ask about school-based aid.

Our general guide to applying for state education funding has a document checklist that also works for scholarship foundations.

What the Donor Rules Mean for Families

Understanding the donor side helps explain why scholarship availability varies. Under the Code of Virginia, donors receive a credit worth 65 percent of a monetary or marketable securities donation to an approved foundation. Individuals must donate at least $500 to qualify and earn credits only on the first $125,000 they donate in a taxable year; that individual cap does not apply to businesses. VDOE issues credits first come, first served, and total credits are capped at $25 million per fiscal year. When credits run out, donations slow, and foundations may have less to award. That is one reason to apply as early as your target school allows.

Virginia and Homeschooling

Virginia’s home instruction law, section 22.1-254.1 of the Code, lets a parent teach a child at home if the parent meets one of four criteria: holds a high school diploma, is a teacher with qualifications set by the Board of Education, provides a program of study or curriculum (including correspondence or distance learning) or provides evidence of being able to provide an adequate education. Parents must:

• notify the division superintendent each year by August 15, with a list of subjects to be studied and evidence of meeting one of the four criteria; and
• by August 1 after each year of home instruction, provide evidence of progress, either a composite score in or above the fourth stanine on a nationally normed achievement test (or an equivalent ACT, SAT or PSAT score) or an evaluation the superintendent accepts, such as a letter from a licensed teacher or a person with a master’s degree in an academic discipline who knows the child’s work.

The evidence-of-progress requirement does not apply to children under age six as of September 30. Parents may instead seek a religious exemption under section 22.1-254. The law also requires school boards to make AP, PSAT/NMSQT and PreACT exams available to home-instructed students.

On funding, EISTC scholarships pay school-related tuition and fees at participating nonpublic schools, so they do not fund home instruction. To see where homeschoolers can use public funds, read can homeschoolers use state education funds.

The 2027 Federal Scholarship Tax Credit in Virginia

The IRS explains that beginning January 1, 2027, individuals may be able to claim a Federal Scholarship Tax Credit of up to $1,700 for certain cash contributions to Scholarship Granting Organizations. A state must elect to participate and give the IRS a list of participating organizations. Virginia is on the IRS list of participating states for 2027 (updated October 22, 2026).

For Virginia families, that could mean additional scholarship money flowing through participating organizations starting in 2027. The federal and state programs are separate, with different rules, so ask any scholarship organization which program a given award comes from and what its eligibility rules are.

Questions to Ask a Scholarship Foundation

Each approved foundation runs its own application, so details differ. Before you apply, ask:

• Which schools do you fund? Some foundations limit awards to one school or a group of schools.
• Which income year and documents do you use? Ask whether they want a tax return, pay stubs or benefit letters.
• When do you make awards? Some award in spring for the next school year; others award on a rolling basis while funds last.
• Is the scholarship renewable? Prior recipients meet one of the Code’s enrollment conditions, but renewal still depends on the foundation’s funds and your continued eligibility.
• How is the money paid? Scholarships are typically paid toward tuition and fees at the school rather than to parents.
• What happens if we change schools? Ask whether an award can move with your child if the new school also works with that foundation.

Write down the answers for each school on your list. Comparing them side by side makes it easier to see which option leaves the smallest gap between tuition and aid.

Mistakes to Avoid

• Waiting until after enrolling. Because the enrollment test looks at public school attendance and prior scholarships, timing your application around the move from public to private school matters.
• Using last year’s income chart. Poverty guidelines update every year.
• Assuming the SOQ cap is your award. It is a maximum; the foundation sets the amount.
• Applying to the state. VDOE does not award scholarships to families. Start with a participating school.

Frequently Asked Questions

Does Virginia have an ESA or school vouchers?

No. As of October 2026, Virginia’s parent-facing program is the Education Improvement Scholarships Tax Credits program, a donor-funded tax-credit scholarship.

What is the income limit for Virginia EISTC scholarships?

Family income may not exceed 300 percent of the federal poverty guidelines, or 400 percent for a student with an IEP, according to VDOE.

How much is a Virginia Education Improvement Scholarship?

Scholarships are generally limited to the state share of per-pupil Standards of Quality funding for the locality where the student lives. VDOE posts the amounts by locality; foundations set actual awards.

Can a student already in private school get an EISTC scholarship?

Generally only if they meet one of the enrollment conditions, such as being a prior scholarship recipient, entering kindergarten or first grade, having moved from another state or qualifying as a student with a disability.

Is Virginia participating in the federal school choice tax credit?

Yes. Virginia is on the IRS list of states that elected to participate in the Federal Scholarship Tax Credit for 2027.

The Bottom Line

Virginia’s education funding for parents is a scholarship program built around private school tuition, income limits tied to the federal poverty guidelines and award caps set by locality. Start with a participating school, confirm which enrollment condition your child meets, apply early and keep an eye on the federal credit that begins in 2027. Homeschooling families should focus on the August 15 notice and the August 1 evidence-of-progress deadline.