Education Freedom Tax Credit can save donors 354% more than a deductionUnder the program, donors can receive a federal tax credit of up to $1,700. The Federal Scholarship Tax Credit program safeguards against abuse by the wealthy while providing a generous benefit to middle-class donors. A $1,700 tax credit reduces the person’s federal income tax dollar for dollar by $1,700. By comparison, a $1,700 tax deduction would reduce taxable income by $1,700, not their tax bill. In this example, the tax credit saves the taxpayer $1,326 more than a tax deduction of the same size.