This Act may be cited as the Federal Tax Credit Scholarship Improvement Act.

(a) In general Paragraph (1) of section 25F(b) of the Internal Revenue Code of 1986 is amended to read as follows: (1) Dollar limitation For purposes of this section— (A) In general The credit allowed under subsection (a) to any taxpayer for any taxable year shall not exceed the applicable amount (twice such amount in the case of a joint return). (B) Applicable amount The applicable amount is $1,700. (C) Adjustment for inflation (i) In general In the case of a taxable year beginning after December 31, 2026, the $1,700 amount under subparagraph (B) shall be increased by an amount equal to— (I) such amount, multiplied by (II) the cost-of-living adjustment determined under section 1(f)(3) by substituting calendar year 2025 for calendar year 2016 in subparagraph (A)(ii) thereof. (ii) Rounding If any increase determined under clause (i) is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50. (iii) Publication of adjusted amount Not later than November 1 of each calendar year, the Secretary shall publish the adjusted limitation applicable for the following taxable year.. (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2025.