Month: June 2026

The Internal Revenue Service announced that 27 states have elected to participate in the Federal Scholarship Tax Credit (FSTC) program, which enables eligible taxpayers to claim a federal tax credit for qualified contributions to Scholarship Granting Organizations (SGOs) providing scholarships for qualified elementary and secondary education expenses.

In order to claim the tax credit of up to $1,700, you must contribute to an SGO located in a state that elects to participate in the FSTC program and submits a list of qualified SGOs. State participation in the program is voluntary.

As of early 2026 multiple states have formally opted into the program, including: Alabama, Alaska, Arkansas, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Louisiana, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming.

Many people have hobbies – things they enjoy doing in their spare time – and some even make a little extra money from them. But there’s a difference between a hobby and a business, especially in how each is treated when it comes to filing taxes.

Businesses operate to make a profit while hobbies are for pleasure or recreation. Here are some common questions you should ask yourself when deciding if what you’re doing is a hobby or business. No single thing is the deciding factor.

• Is there an intent to make a profit?
• If the activity makes a profit, how much is it?
• Can you expect to make a future profit from the appreciation of the assets used in the activity?
• Do you depend on income from the activity for your livelihood?
• Are any losses due to circumstances beyond your control or are the losses normal for the startup phase of your type of business?
• Are operations adjusted to improve profitability?
• Is the activity carried out like a business with complete and accurate books and records kept?
• Do you and your advisors have the knowledge needed to carry out the activity as a successful business?

Review all the factors to make the best decision. Regardless of the decision, if you’re paid through payment apps for goods and services during the year, you may receive an IRS Form 1099-K for those transactions. These payments are taxable income and must be reported on federal tax returns.

Additionally, if you received payment in the form of digital assets, you may also get a Form 1099-DA. Whether you have a hobby or run a business, good recordkeeping throughout the year will help when you file taxes.