The nation’s first federal tax-credit scholarship program, set to launch Jan. 1 and help cover private- and public-school expenses.

Created under last year’s tax and spending law, the program offers taxpayers a nonrefundable, dollar-for-dollar federal tax credit of up to $1,700 annually—or $3,400 for married couples filing jointly—for donations to approved scholarship-granting organizations, which distribute funds to eligible families. Scholarships can cover private school tuition, tutoring, disability services, books, computers, and other education expenses. Families earning up to three times their area’s median income qualify, covering roughly 96% of students in participating states. The rules let states select which qualifying SGOs participate, but limit additional restrictions on how they distribute funds and require annual independent audits. At least 31 states have said they will participate (see where your state stands).

By 2030, officials estimate the program could generate nearly $26B annually, funding about 2.2 million scholarships. See how school vouchers work and the debate surrounding them.