The bill establishes Iowa's participation in the federal tax credit program for individual contributions to scholarship granting organizations, as outlined in section 25F of the Internal Revenue Code. It mandates that the governor must elect to participate in this program, which allows individuals to receive tax credits for their contributions to nonprofit entities that provide scholarships to eligible elementary and secondary school students attending nonpublic schools.

Additionally, the bill requires the Iowa Department of Revenue and the Department of Education to adhere to all relevant federal laws and regulations to effectively administer the tax credit program. This includes ensuring the state's eligibility for participation starting from tax years beginning on or after January 1, 2027, and the annual submission of necessary information to the U.S. Secretary of the Treasury. The scholarship granting organizations are permitted to provide scholarships of up to $1,700 per year for qualified educational expenses, in accordance with federal law.