Texas K–12 Scholarship Income Eligibility Under 26 U.S.C. § 25F: 254-County Empirical Analysis

A canonical econometric study and open-data engine joining official HUD FY 2026 Section 8 Multifamily Tax Subsidy Project (MTSP) income limits with IRS Statistics of Income (SOI) Form 1040 individual tax data across all 254 Texas counties. Demonstrates that 96.5% of Texas households qualify for 100% federal tax-credit scholarships ahead of the January 1, 2027 effective date.

Jurisdiction Coverage

254 / 254

All Texas counties ingested (FIPS 48001–48507)

Statewide Form 1040 Returns

13.6M+

IRS Statistics of Income (Tax Year 2022)

Statutory Eligibility Rate

96.5%

13,164,385 Texas filers below 300% AMGI

SGO Setup Fee

$0.00

Zero platform setup cost for Texas schools & CPAs

Austin-Round Rock

Travis, Williamson, Hays

HUD MFI (2026) $134,400

4-Person 300% AMGI $403,200

"A family of four earning up to $403,200 qualifies for 100% tax-credit scholarships under 26 U.S.C. § 25F, qualifying over 94% of Austin-Round Rock area households."

1-Person: $282,300 8-Person: $532,500 Est. Eligible: 95.3%

Dallas-Fort Worth

Dallas, Tarrant, Collin, Denton

HUD MFI (2026) $121,100

4-Person 300% AMGI $363,300

"Across the Dallas-Fort Worth metroplex, four-person households earning up to $363,300 satisfy federal § 25F eligibility, covering over 92% of all taxpayers."

1-Person: $254,400 8-Person: $479,700 Est. Eligible: 97.2%

Houston-The Woodlands

Harris, Fort Bend, Montgomery

HUD MFI (2026) $104,000

4-Person 300% AMGI $312,000

"In greater Houston-The Woodlands, middle-class families with four members qualify with annual incomes up to $312,000, while families of six qualify up to $362,100."

6-Person: $362,100 8-Person: $411,900 Est. Eligible: 96.3%

San Antonio-New Braunfels

Bexar, Comal, Guadalupe

HUD MFI (2026) $100,600

4-Person 300% AMGI $301,800

"In San Antonio-New Braunfels, the 300% AMGI threshold reaches $301,800 for a family of four and exceeds $241,500 even for a two-person household."

2-Person: $241,500 8-Person: $398,400 Est. Eligible: 97.3%

Checkable Legal & Econometric Methodology

All calculations in this study derive strictly from federal statutory text, Treasury administrative regulations, and published federal government datasets.

Statutory Income Definition

Under 26 U.S.C. § 25F(c)(2) (added by Public Law 119-21), an "eligible student" is a child residing in a household whose annual income does not exceed 300% of Area Median Gross Income (AMGI).

26 U.S.C. § 42(d)(5)(B): "Area median gross income shall be determined in accordance with determinations of area median gross income under section 8 of the United States Housing Act of 1937..."

In Section 8 and Multifamily Tax Subsidy Project (MTSP) data, HUD publishes Very Low Income (VLI) limits (column l50), representing exactly 50% of AMGI adjusted for household size. Therefore, the statutory 300% AMGI limit for any household size N is algebraically:

// Statutory AMGI 300% Formula
AMGI_300%(N) = (l50_N / 0.50) * 3.00
AMGI_300%(N) = 6.0 * l50_N

Treasury Asset-Disregard Rule

Under Treasury Regulation T.D. 10057 / REG-117199-25 (Prop. Treas. Reg. § 1.25F-3(c)(6)), household income vetting is executed strictly against cash Form 1040 Adjusted Gross Income (AGI).

Prop. Treas. Reg. § 1.25F-3(c)(6)(ii): Non-liquid equity and qualified savings are statutory disregarded in determining student scholarship eligibility.

The following assets are 100% excluded from eligibility calculations:

✓ Primary Residence Home Equity: Unrealized residential appreciation is never imputed as income.
✓ Section 529 College Savings Plans: Existing balances and earnings remain fully protected.
✓ Retirement Accounts: Balances in 401(k), 403(b), Traditional IRA, and Roth IRA plans are excluded.

Families need only provide page 1 of their prior-year Form 1040 (or qualify through categorical safe harbors such as SNAP, TANF, SSI, or Medicaid).

Primary Sources & Tail Modeling

County-level Form 1040 return totals and income distributions are matched directly against IRS Statistics of Income (SOI) Table 2 (Tax Year 2022).

Because the lowest 4-person 300% AMGI limit in Texas ($251,100 in rural counties) exceeds $200,000, 100% of filers under $200,000 AGI qualify. Filers earning $200k+ are modeled using Pareto tail interpolation:

// Pareto Tail Distribution (alpha = 1.6)
F(T) = 1.0 - (200,000 / T)^1.6
Eligible(200k+) = Returns(200k+) * F(T)

Primary Open-Data Government Sources:

HUD FY 2026 Section 8 MTSP File: huduser.gov (XLSX)
IRS SOI 2022 County Tax Data: irs.gov (22incytx.xlsx)