For families & donors
Two new tax rules worth knowing about
Two recent federal changes make Christian school more affordable — one for families saving in a 529 account, and one for donors who want their giving to fund scholarships. Here is what each one does, in plain language.
For families
529 savings can now pay for K-8 school
Beginning in 2026, a family can withdraw up to $20,000 per child per year from a 529 savings account for K-12 expenses — double the old $10,000 limit — and the list of allowed expenses is wider than tuition alone. For a KCA family, that means money saved in a 529 can help pay for school now, not only college later.
How a KCA family might use it
A grandparent opened a 529 for your daughter years ago. Starting in 2026 you can withdraw from that account to cover her KCA tuition for the year — paid through your normal monthly payment plan — instead of waiting until college.
Rules and paperwork vary by state 529 plan. Confirm with your plan provider or tax preparer before you withdraw.
Tuition
Tuition at a private or religious K-8 school like KCA.
Books & materials
Curriculum, workbooks, and required classroom materials.
Tutoring & testing
Tutoring, standardized testing fees, and dual-enrollment costs.
Educational therapies
Certain therapies for a student with a disability.
For donors
A federal tax credit for scholarship gifts, starting in 2027
Starting January 1, 2027, an individual can claim a federal tax credit of up to $1,700 for a cash gift to an approved Scholarship Granting Organization. Kentucky has chosen to take part, and a donor does not have to live in Kentucky to give to a Kentucky scholarship organization and claim the credit.
A credit, not a deduction
A deduction lowers the income you are taxed on. A credit lowers the tax you owe, dollar for dollar — up to $1,700 per taxpayer.
Kentucky is participating
The credit only works in states that opt in. Kentucky opted in and opened sign-ups for scholarship organizations in the summer of 2026.
Donors can live anywhere
This is the part most people miss: a donor in any state can give to a Kentucky scholarship organization and claim the credit.
The money becomes scholarships
Scholarship organizations award the funds to families for tuition. It is not a gift to the school's general budget.
Where KCA stands
KCA has not named a scholarship organization partner yet. Kentucky's approved list is still being built, and we would rather tell you nothing than tell you something that turns out to be wrong. We are following it closely and will post the details here — including how to direct a scholarship gift toward KCA families — as soon as they are confirmed. Call or email the office if you would like to be notified.
What to do now
Practical next steps
If you are a KCA family
Ask your tax preparer about the 529 change before this year's tuition payments, and call the office if you want help understanding what applies to your plan.
Tuition & enrollmentIf you want to give now
Gifts made today go to the tuition assistance fund the usual way. The new credit applies to giving in 2027 and after — it does not change what you give this year.
Give & partnerIf you have questions
The office is glad to talk it through, and to tell you plainly what we do and do not know yet about the scholarship credit.
Contact the officeThe figures and dates above come from the federal law signed in 2025 and later IRS guidance. This page is general information for KCA families and donors, not tax advice — please talk with your own tax preparer about your situation.