# Treasury and IRS exclude digital-asset donations from scholarship-credit cash contributions

> Treasury and IRS published binding temporary regulations implementing aspects of the section 25F scholarship tax credit for contributions in 2027 and later taxable years.

- URL: https://riadefi.com/regulation/2026-10-02-irs-section-25f-scholarship-credit-digital-asset-contributions/
- Posture: Final rule
- Authorities: Internal Revenue Service; U.S. Department of the Treasury
- Event date: 2026-10-02
- Effective: 2026-12-01
- Version: 1, published 2026-10-03 (first published 2026-10-03)
- Advisor-relevant: yes

## What changed

Treasury and IRS published binding temporary regulations implementing aspects of the section 25F scholarship tax credit for contributions in 2027 and later taxable years. Section 1.25F-1T(a)(12) defines qualifying cash payments in U.S. dollars and expressly excludes any digital asset. A direct cryptocurrency contribution therefore does not satisfy this cash definition. The regulations become effective December 1, 2026; the definition section specifies applicability beginning September 1, 2026 and expiration on or before October 1, 2029.

## Who it affects

- Digital-asset holders considering contributions to scholarship granting organizations
- Advisers coordinating charitable and tax planning for clients with cryptocurrency holdings
- Scholarship granting organizations receiving client contributions

## What is still open

- Whether a particular contribution meets all other section 25F requirements, including recipient and state eligibility
- The donor's separate tax consequences if digital assets are sold before a U.S.-dollar contribution
- Whether subsequent regulations modify the temporary definition

## What it means for an advisor

- Flag direct digital-asset contributions as excluded from the regulation's qualifying cash definition
- Coordinate any proposed sale and subsequent cash donation with the client's tax adviser
- Check recipient eligibility, contribution designation, and substantiation before incorporating the credit into a client plan

## Sources

1. [Federal Scholarship Tax Credit](https://www.federalregister.gov/documents/2026/10/02/2026-20264/federal-scholarship-tax-credit) · Internal Revenue Service and U.S. Department of the Treasury · 2026-10-02 · effective 2026-12-01


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Published by Ketju Research on RIADeFi (https://riadefi.com). Educational research for financial professionals; not investment, legal, tax, or compliance advice.