# EFTC Credit (eftccredit.com), full text corpus > Long-form companion to https://eftccredit.com/llms.txt. Independent, primary-source reference on the federal Education Freedom Tax Credit (EFTC), also called the Educational Choice for Children Act (ECCA), the Federal Scholarship Tax Credit (FSTC), and IRC §25F: the dollar-for-dollar federal income tax credit for donations to Scholarship Granting Organizations (SGOs) that fund K-12 scholarships, effective January 1, 2027: up to $1,700 per taxpayer, and up to $3,400 on a joint return when each spouse gives, under Treasury's proposed regulations of October 1, 2026. Published by EFTC Credit (eftccredit.com), an independent educational resource. Not affiliated with, endorsed by, or part of the IRS, the Treasury, the Department of Education, or any government program. Legal claims are tied to the verbatim statutory text of 26 U.S.C. §25F and official IRS/Treasury guidance, archived at /documents, including Treasury's October 1, 2026 proposed regulations (REG-117199-25, not final) and temporary regulations (T.D. 10057, which take effect without a comment period). The core facts below say which source each one rests on. Where Treasury has not ruled, this site says so rather than guessing. State-by-state status last updated 2026-10-05. Everything below is reproduced from eftccredit.com; each item links to its canonical page. --- ## Core facts and their legal status (as of October 1, 2026) - Statute, 26 U.S.C. §25F (enacted July 4, 2025): a nonrefundable federal income tax credit for cash contributions to Scholarship Granting Organizations, capped at $1,700 per taxpayer per year, for contributions made in 2027 and later. Unused credit carries forward up to 5 years. The credit applies only to gifts to SGOs on the list of a state that elects to participate. - Treasury's proposed regulations (REG-117199-25, released October 1, 2026; not final; taxpayers, SGOs, and states may rely on them for contributions made on or after January 1, 2027): spouses filing jointly are treated as separate taxpayers, so up to $3,400 on a joint return when each spouse makes and designates their own gift; a state tax credit for the same gift is subtracted before the $1,700 cap (a $2,500 gift with a $500 state credit still yields the full $1,700 federal credit); a partner's or S corporation shareholder's share of the entity's gift does not count; a donor may give to an SGO in any participating state regardless of where the donor lives. - Scholarships under the proposed regulations: household income at or below 300% of area median gross income; a student counts for a state only if the student resides there, and may attend school in another state; tuition and other charges billed by the school are paid directly to the school; qualified expenses and the meaning of "school" follow §530(b)(3), with separate §530 guidance still to come. - SGOs under the proposed regulations: spend at least 90% of the organization's income on scholarships by the end of the following taxable year; an SGO whose activities are at least 85% scholarship granting may apply the test to its §25F segregated account instead of all receipts; an annual financial and programmatic audit, by an outside professional when total receipts exceed $500,000. - Temporary regulations (T.D. 10057, which take effect without a comment period and apply from September 1, 2026): a gift counts only if designated as a §25F contribution to the SGO when made; cash includes checks, credit and debit cards, electronic transfers, and after-tax payroll deductions, but not digital assets; SGOs register in an IRS SGO portal (not yet open), send each donor a written acknowledgment with a unique donor number by January 31, and report to the IRS by February 28 (donors do not give the SGO a Social Security number); for 2027 a state files Form 15714 by January 1, 2027 and its SGO list by February 15, 2027; a state must list every qualifying organization located in the state that seeks inclusion and may not impose SGO rules more restrictive than §25F. - Still open: final regulations; the §530 guidance on qualified expenses and schools (including homeschools); Form 8525, Federal Scholarship Tax Credit (the donor claim form, not yet released); the IRS area median gross income figures. --- ## Glossary ### §25F (Section 25F) The section of the Internal Revenue Code that creates the federal scholarship tax credit. Added by the One Big Beautiful Bill Act in 2025; it applies to taxable years ending after December 31, 2026, so contributions made in 2027 and later. Treasury and the IRS issued proposed and temporary regulations under it on October 1, 2026. Source: https://eftccredit.com/glossary#section-25f ### §25F segregated account The separate account an SGO must keep exclusively for qualified contributions and their earnings. Every designated gift goes in, whether or not the donor ends up claiming a credit, with its own complete books and records. A multistate SGO keeps one account per state. Under Treasury's 85 percent safe harbor, an SGO whose activities are at least 85% scholarship granting measures the 90% test against this account; a multistate SGO meets the test separately for each state's account. Source: https://eftccredit.com/glossary#segregated-account ### §530 (Coverdell rules) The Code section §25F cross-references to define qualifying expenses and what counts as a 'school', which sends part of that definition back to each state's law. Source: https://eftccredit.com/glossary#section-530 ### $1,700 cap The maximum §25F credit, set at $1,700 'to any taxpayer.' Treasury's proposed regulations treat spouses filing jointly as separate taxpayers, so a joint return can claim up to $3,400 when each spouse gives; taxpayers may rely on that rule for 2027. Source: https://eftccredit.com/glossary#1700-cap ### 300% AMI / AMGI (Area Median Gross Income) The income ceiling for scholarship eligibility: 300% of the area's median gross income, an area-specific figure adjusted for family size, not a single national number. Treasury's proposed regulations compute it the way HUD does for Section 8 housing, count everyone living with the student as the household, and say the IRS will publish the figures annually in the Internal Revenue Bulletin (not yet published as of October 1, 2026). Source: https://eftccredit.com/glossary#300-percent-ami ### 501(c)(3) The federal tax-exempt charitable status an SGO must hold to operate. Source: https://eftccredit.com/glossary#501c3 ### 85 percent safe harbor A rule in Treasury's proposed regulations: if at least 85% of a single-State SGO's activities are scholarship granting (§25F, state tax-credit, or other scholarships, plus the administration, fundraising, and compliance that support them), it applies the operating tests, including the 90% test, to its §25F account rather than to the whole organization, and the 90% base becomes the account's contributions and earnings. The 85% activity test is separate from the 90% spending test. Multistate SGOs must meet the 85% level in all cases. Treasury asked for comments on how to measure activities and whether 85% is the right line. Source: https://eftccredit.com/glossary#85-percent-safe-harbor ### 90/10 rule §25F requires an SGO to spend at least 90% of its income on scholarships, which leaves at most 10% of that income for everything else. Under Treasury's proposed regulations, income means total gross receipts from all sources (cash method, before expenses), and each year's 90% must be spent by the last day of the following taxable year; an SGO using the 85 percent safe harbor applies the test to its §25F account instead. Source: https://eftccredit.com/glossary#90-10-rule ### Administrative cap Shorthand for the share of income the 90% test leaves for operations and administration: at most 10%. It is a consequence of the spending test, not a separate rule. An SGO using the 85 percent safe harbor measures the test on its §25F account alone, so money it receives outside that account is not in the 90% base. Source: https://eftccredit.com/glossary#administrative-cap ### AMT (Alternative Minimum Tax) A parallel federal tax calculation. Treasury's proposed regulations confirm the §25F credit is allowed against both regular tax and the AMT (the taxes imposed by sections 1 and 55(a)). Source: https://eftccredit.com/glossary#amt ### Annual SGO audit Under Treasury's proposed regulations, every SGO gets a yearly financial and programmatic audit and gives the results to each state that lists it. An organization with total receipts over $500,000 must use an independent professional or accredited body; one at $500,000 or less may use a committee of independent persons unrelated to management, signing under penalties of perjury. Source: https://eftccredit.com/glossary#annual-sgo-audit ### Anti-earmarking Donors cannot designate their contribution for a specific student or family. Source: https://eftccredit.com/glossary#anti-earmarking ### Articles of incorporation The document filed with a state's Secretary of State that legally creates a corporation. For a 501(c)(3) it must limit the organization's purposes to exempt ones and dedicate assets to charity on dissolution. Source: https://eftccredit.com/glossary#articles-of-incorporation ### Bylaws The internal rulebook a nonprofit's board adopts: how directors are chosen, how meetings and votes work, what officers do. Not filed with the state, but under the §25F temporary regulations a state listing a new SGO checks that its bylaws (or other governing documents and policies) require the SGO rules. Source: https://eftccredit.com/glossary#bylaws ### Carryforward Credit you can't use this year because it exceeds your tax liability can be carried forward for up to 5 years. What carries forward is unused credit, never gifts above the $1,700 cap. Under Treasury's proposed regulations, carryforwards are used oldest first, before the current year's credit. Source: https://eftccredit.com/glossary#carryforward ### Categorical eligibility A way to verify income without reviewing it directly: an award letter, dated within the last 12 months, showing someone in the student's household currently receives SNAP, TANF, WIC, Section 8 housing, or SSI. Under Treasury's proposed regulations only those five programs count; school-wide free or reduced-price lunch and Medicaid are not on the list, and Treasury asked for comments on adding state and tribal programs. Foster children are covered by a separate safe harbor. Source: https://eftccredit.com/glossary#categorical-eligibility ### Chairperson Not a separate job, the director who runs a given meeting: calls each agenda item, asks for the vote, keeps things moving. At a brand-new organization's first meeting it's usually the founder who convened it; once a president is elected, chairing board meetings is normally part of the president's role. Source: https://eftccredit.com/glossary#chairperson ### Charitable solicitation registration State registration most SGOs must complete before fundraising in a state, typically renewed annually. Complying with a state's general charity laws is part of being 'located in' that state under Treasury's temporary regulations, which is a condition of appearing on its SGO list. Source: https://eftccredit.com/glossary#charitable-solicitation-registration ### Conflict-of-interest policy A board-adopted policy requiring directors and officers to disclose personal stakes in the organization's decisions and to step aside from votes where they have one. The IRS publishes a sample in the Form 1023 instructions and asks on the form whether you have one. Source: https://eftccredit.com/glossary#conflict-of-interest-policy ### Coverdell ESA A tax-advantaged education savings account under §530. Distinct from a state-funded Education Savings Account (ESA) and from a §25F scholarship. Source: https://eftccredit.com/glossary#coverdell-esa ### Covered State The regulations' term for a state that has made a valid §25F election for a given calendar year. Donors anywhere in the U.S. may give to an SGO on any covered State's list; scholarships go only to students who reside in that state. Source: https://eftccredit.com/glossary#covered-state ### Determination letter The IRS letter recognizing an organization as tax-exempt under 501(c)(3), issued after Form 1023 approval. Donors, grantmakers, banks, and state SGO lists all ask for it. Source: https://eftccredit.com/glossary#determination-letter ### Director minimum The smallest board a state allows a nonprofit corporation to have, set by the state's nonprofit corporation act. Commonly three; some states (like Arizona, California, Delaware, Kansas, Virginia) allow one. Three-plus unrelated directors is the practical floor for charity credibility regardless. Source: https://eftccredit.com/glossary#director-minimum ### Disbursement Paying out scholarship funds. Under Treasury's proposed regulations, tuition, fees, room and board, and similar school charges must be paid directly to the school; other vendors can be paid directly if verified and not related to the student; a qualified digital wallet is allowed; and money goes to a family only as a qualified reimbursement backed by a receipt. Source: https://eftccredit.com/glossary#disbursement ### Disqualified person Someone an SGO may not award a scholarship to: a substantial contributor; an officer, director, or trustee (or anyone with similar powers); anyone who participates in selecting recipients or setting awards, including committee members; and family members of all of these. Under Treasury's proposed regulations, officers and selectors stay disqualified through the end of the year after they leave, and family includes spouses, ancestors, descendants, siblings and their descendants, and the spouses of those relatives. Source: https://eftccredit.com/glossary#disqualified-person ### Dissolution clause The articles provision saying that if the organization shuts down, remaining assets go to another charity or government body, never to insiders. The IRS organizational test expects it; writing it expressly is the safe path in every state. Source: https://eftccredit.com/glossary#dissolution-clause ### Donor substantiation The written acknowledgment an SGO must provide each donor by January 31 of the following year to support a claimed §25F credit: the SGO's EIN, the year's designated total, the unique donor number, and any goods or services provided. The donor then reports the donor number on Form 8525. Source: https://eftccredit.com/glossary#donor-substantiation ### ECCA (Educational Choice for Children Act) The bill name Congress used for the legislation that became §25F. Same program, different label. Source: https://eftccredit.com/glossary#ecca ### EFTC (Education Freedom Tax Credit) The common name for the §25F credit, used by advocacy groups and adopted by the U.S. Treasury in its June 2026 guidance announcement. Source: https://eftccredit.com/glossary#eftc ### EIN (Employer Identification Number) The federal tax ID number every organization needs for banking, hiring, and IRS filings. Issued free and instantly by the IRS online application; any site charging for one is a middleman. Source: https://eftccredit.com/glossary#ein ### Eligible student A child who is eligible to enroll in a public elementary or secondary school and whose household income, for the calendar year before the scholarship application, is not more than 300% of area median gross income. The student does not have to be enrolled when applying. SGOs can verify income directly or through categorical eligibility, and foster children are treated as meeting the income test. Source: https://eftccredit.com/glossary#eligible-student ### ESA (Education Savings Account) A government-funded, family-controlled account for a range of education expenses. A different school-choice model than an SGO tax-credit scholarship. Source: https://eftccredit.com/glossary#esa ### Fiscal year The 12-month accounting period an organization chooses (calendar year for most). It drives the Form 990 deadline: the 15th day of the 5th month after the fiscal year ends. Source: https://eftccredit.com/glossary#fiscal-year ### Form 1023 / 1023-EZ IRS applications for 501(c)(3) status. The streamlined 1023-EZ ($275) is for smaller orgs that qualify; the full Form 1023 ($600) is for larger or more complex organizations. Source: https://eftccredit.com/glossary#form-1023 ### Form 8525 Form 8525, Federal Scholarship Tax Credit, is the form a donor files with the federal return to claim the §25F credit, listing each SGO's unique donor number, as named in Treasury's proposed regulations. The form and its instructions had not been released as of October 1, 2026. Source: https://eftccredit.com/glossary#form-8525 ### Form 990 The annual information return exempt organizations file with the IRS: the 990-N postcard (receipts normally $50,000 or less), the 990-EZ (under $200,000 receipts and $500,000 assets), or the full 990. Public by law, and three straight missed years auto-revokes exemption. Under Treasury's proposed regulations, an SGO attaches its annual §25F certification and report to its Form 990. Source: https://eftccredit.com/glossary#form-990 ### FSTC (Federal Scholarship Tax Credit) The IRS's name for the same §25F credit, used on the IRS program landing page and in the title of Form 8525, Federal Scholarship Tax Credit. Source: https://eftccredit.com/glossary#fstc ### Income verification Confirming an applicant's household income is within 300% of area median gross income before awarding a scholarship. Treasury's proposed regulations allow four methods: direct review (pay stubs, prior-year returns, IRS transcripts, W-2s, or other relevant data sources), categorical eligibility, a safe harbor for need-based tutoring or special-needs services at schools in low-income areas, and automatic eligibility for foster children. Source: https://eftccredit.com/glossary#income-verification ### Incorporator The person who signs and files the articles of incorporation. Their job ends once the board holds its first meeting and ratifies the formation. Source: https://eftccredit.com/glossary#incorporator ### IRS SGO list The list the IRS publishes on irs.gov of SGOs on every covered State's list, organized by state, for organizations that authorize disclosure. Removed SGOs are shown as removed, with the date. Under Treasury's proposed regulations, a donor may rely on an organization's presence on this list at the time of the gift, unless the donor knew it didn't qualify or was responsible for or aware of the problem that led to its removal. Source: https://eftccredit.com/glossary#irs-sgo-list ### IRS SGO portal The IRS online system every organization planning to solicit §25F contributions must register in, as soon as possible and preferably before appearing on any state list (temporary regulations). Registration gives the SGO the uniform donor-number format and lets it authorize listing on the IRS SGO list; the SGO reports donor totals through it by February 28. Not yet open as of October 1, 2026. Source: https://eftccredit.com/glossary#irs-portal ### IRS State section 25F portal The IRS online system a state uses to register (with a special-purpose EIN) and to file its election, SGO list, list changes, and certifications. The governor, or whoever state law designates, may authorize up to two designated officials to use it (temporary regulations). Not yet open as of October 1, 2026. Source: https://eftccredit.com/glossary#irs-state-portal ### Located in a State Under Treasury's temporary regulations, an organization is located in a state if it is authorized to do business there and complies with that state's generally applicable charity laws, including transparency, accountability, and fraud-prevention rules. No headquarters or in-state staff is required. Source: https://eftccredit.com/glossary#located-in-a-state ### Minutes The written record of a board meeting: who attended, what was decided, how votes went. Nothing to do with clock time, the name comes from 'minute' as in small ('my-NOOT'), i.e. brief notes. Kept permanently; auditors, banks, the IRS, and state vetting teams treat minutes as proof the board actually governs. Source: https://eftccredit.com/glossary#minutes ### Motion A proposal formally placed before a board for a vote, spoken as a sentence starting "I move that…". Nothing gets voted on at a board meeting until someone states it as a motion; the minutes then record it as a resolution if it passes. Source: https://eftccredit.com/glossary#motion ### Multistate SGO An SGO that appears on more than one covered state's list. It must be located in each state, at least 85% of its activities must be scholarship granting, and it keeps a separate §25F account per state, lets donors choose how their gift is split among those states, and meets the operating tests separately for each account. Source: https://eftccredit.com/glossary#multistate-sgo ### Nonrefundable credit A credit that can reduce your federal tax to $0 but cannot create a refund beyond the tax you owed. The §25F credit is nonrefundable. Source: https://eftccredit.com/glossary#nonrefundable ### Notice 2025-70 The late-2025 IRS notice requesting public comment on §25F implementation. Treasury's October 2026 proposed regulations respond to those comments. Source: https://eftccredit.com/glossary#notice-2025-70 ### OBBBA (One Big Beautiful Bill Act) Public Law 119-21, the 2025 reconciliation law. Section 70411 of OBBBA added §25F to the tax code. Source: https://eftccredit.com/glossary#obbba ### Opt-in / advance election (Form 15714) A state's election to participate in §25F, made by the governor (the mayor in DC) or whoever state law designates, one calendar year at a time; a completed election can't be revoked. Without it, families in the state can't receive §25F scholarships. For 2027, a state files an advance election on Form 15714 by January 1, 2027 and perfects it by submitting its SGO list by February 15, 2027. For later years, an advance election runs January 2 to September 30 of the prior year, with the list submitted between October 1 and January 1. Source: https://eftccredit.com/glossary#opt-in ### Organizational meeting The first official board meeting after incorporation: adopt bylaws, elect officers, authorize the bank account and the 501(c)(3) application. Its minutes are the founding record everything else cites. Source: https://eftccredit.com/glossary#organizational-meeting ### Participating state A state that has opted in and submitted its list of qualified SGOs to the IRS. The regulations call it a covered State. Source: https://eftccredit.com/glossary#participating-state ### Proposed regulations The Treasury/IRS rules interpreting §25F (REG-117199-25), released October 1, 2026 alongside temporary regulations. They are not final. Comments are due December 1, 2026, with a public hearing scheduled for December 15, 2026; taxpayers, SGOs, and states may rely on them for contributions made on or after January 1, 2027, until final rules are published, if they follow them consistently. Source: https://eftccredit.com/glossary#proposed-regulations ### Qualified contribution A cash donation by an individual to an SGO that the donor designates, to the SGO and at the time of the gift, as a §25F contribution; the designation is irrevocable, and a donor may designate only part of a gift. Under Treasury's regulations, cash means currency, check, money order, electronic transfer (including credit or debit card), after-tax payroll deduction, or similar, in U.S. dollars, and never a digital asset; stock is not cash. The value of any goods or services the donor receives is subtracted. Under the proposed regulations, a partner's or S corporation shareholder's share of the entity's gift does not count. Source: https://eftccredit.com/glossary#qualified-contribution ### Qualified digital wallet A third-party electronic payment platform an SGO may use to pay scholarship expenses: families submit purchase requests, the platform tracks approved expenses, and it pre-approves vendors and pays them directly or requires timely receipts. Treasury's proposed regulations list it as an approved payment method. Source: https://eftccredit.com/glossary#qualified-digital-wallet ### Qualified elementary/secondary education expense An education cost a scholarship can pay for, defined by cross-reference to §530(b)(3)(A): tuition, fees, academic tutoring, special-needs services, books, supplies, and other equipment; room and board, uniforms, transportation, and supplementary items and services (including extended-day programs) required or provided by a school; and computer technology, equipment, and internet access. Treasury says separate §530 guidance on qualified expenses and on what counts as a school is a high priority; it was not out as of October 1, 2026. Source: https://eftccredit.com/glossary#qualified-expense ### Qualified reimbursement The only way an SGO may pay money to a family under Treasury's proposed regulations: repaying a qualified expense the family has already paid, backed by a receipt showing both the payment and that the expense qualifies, after the SGO checks that no other source has covered the same expense. Source: https://eftccredit.com/glossary#qualified-reimbursement ### Quorum The minimum number of board members who must be present for a meeting's votes to count. Each state's nonprofit law sets a default (commonly a majority of directors) and how far bylaws may lower it. Source: https://eftccredit.com/glossary#quorum ### Registered agent The person or company with an in-state street address designated to receive legal papers for the corporation. Every state requires one; a board member at a real address works, or commercial services charge roughly $100 a year. Source: https://eftccredit.com/glossary#registered-agent ### Renewal / sibling priority The award priority §25F requires: first students who received a scholarship from the SGO the previous school year, then students with a sibling who received one from that SGO. Treasury's proposed regulations let the priority vary by award type: it matters most for tuition, fees, and room and board, while tutoring or special-needs awards can be prioritized by need. Source: https://eftccredit.com/glossary#award-priority ### Second The one-word reply ("Second.") a DIFFERENT board member gives after a motion, meaning "I agree this deserves a vote." A motion with no second dies without a vote, it's the board's filter against one-person tangents. Not needed on a one-person board. Source: https://eftccredit.com/glossary#second ### Self-dealing prohibition Shorthand for the §25F rule barring an SGO from awarding scholarships to disqualified persons: substantial contributors, officers, directors, trustees, anyone who helps select recipients or set awards, and their family members. Treasury's proposed regulations make no exception for anonymized selection or unpaid volunteers. Source: https://eftccredit.com/glossary#self-dealing ### SGO (Scholarship Granting Organization) A nonprofit that receives donations and awards K-12 scholarships. Under §25F, donors give to an SGO and claim the credit; the SGO awards scholarships to eligible families. Source: https://eftccredit.com/glossary#sgo ### Single-State SGO An SGO on the list of only one covered State. It may use the 85 percent safe harbor if it qualifies, or else meet the 90% test on all of its income. Source: https://eftccredit.com/glossary#single-state-sgo ### Solely within the State The §25F requirement that an SGO's scholarships go to students in its state. Under Treasury's proposed regulations it means the student resides in that state under state law; where the student attends school or buys things doesn't count, so a resident can use the scholarship at a school in another state. Dependents of Armed Forces members and of individuals residing on Indian Lands can qualify in two states. Source: https://eftccredit.com/glossary#solely-within-the-state ### State credit (ordering rule) Any state tax credit allowed for a contribution to an SGO. Under Treasury's proposed regulations, a state credit on designated dollars is subtracted from the contribution before the $1,700 cap applies ($2,500 gift, $500 state credit: full $1,700 federal credit), and when a state credit covers both designated and non-designated dollars, it is applied to the non-designated dollars first. A state deduction does not reduce the federal credit. Source: https://eftccredit.com/glossary#state-credit ### State SGO list The list of SGOs located in a covered State that the state submits to the IRS each year. Under Treasury's temporary regulations, the state must certify it includes every organization located there that qualifies and asks to be listed, may add to it only until its deadline (February 15 for 2027), and may remove an SGO only through a due-process procedure or at the SGO's request. Any public state list must match the submitted one and link to the IRS SGO list. Source: https://eftccredit.com/glossary#state-sgo-list ### Substantial contributor Under Treasury's proposed regulations, anyone who gives an SGO more than $5,000 in its taxable year, if that is also more than 2% of the contributions it received that year, tested both for the whole organization and for its §25F account. A spouse's gifts count together. The status lasts for that year and the next, and it makes the donor and the donor's family disqualified persons. Treasury's example: $6,000 of $450,000 (1.33%) is not substantial. Source: https://eftccredit.com/glossary#substantial-contributor ### Tax liability The total federal income tax you owe for the year, before withholding. The §25F credit can't exceed it, but withholding does not disqualify you, since liability is what matters. Under Treasury's proposed regulations, the credit applies against both regular tax and the alternative minimum tax, after certain other personal credits such as the child tax credit. Source: https://eftccredit.com/glossary#tax-liability ### Tax-credit scholarship The model §25F uses: private donations to an SGO earn the donor a tax credit, and the SGO awards scholarships. Privately funded, not a government appropriation. Source: https://eftccredit.com/glossary#tax-credit-scholarship ### Temporary regulations (T.D. 10057) The §25F rules Treasury and the IRS issued October 1, 2026 that take effect without a comment period and apply from September 1, 2026: definitions (including located in a State and qualified contribution), SGO registration in the IRS SGO portal, donor acknowledgments and IRS reporting, state elections and SGO lists, and the bar on state rules stricter than §25F. They expire October 1, 2029, and their text matches the corresponding proposed regulations. Source: https://eftccredit.com/glossary#temporary-regulations ### Timely written acknowledgment The regulations' term for the statement an SGO must give each donor by January 31 of the year after the gift: its EIN, the donor's total designated contributions for the year, the donor's unique donor number, and whether any goods or services were provided (with a description and good-faith value). It can be delivered electronically if the donor consents. The donor number takes the place of a Social Security number, so the SGO doesn't need the donor's. Source: https://eftccredit.com/glossary#timely-written-acknowledgment ### Unique donor number A number (created in a uniform format the IRS provides through its SGO portal) that an SGO includes on each donor's written acknowledgment and reports to the IRS. The donor enters it on Form 8525, letting the IRS match credits to donors without donors sharing a Social Security number with the SGO. Under Treasury's proposed regulations, a donor who leaves it off is presumed not to have made a qualified contribution to that SGO, unless the donor produces the SGO's acknowledgment when the IRS asks. Source: https://eftccredit.com/glossary#unique-donor-number ### Voucher Government funds that pay private-school tuition for a family. A different model than the privately funded §25F tax-credit scholarship. Source: https://eftccredit.com/glossary#voucher --- ## Explainers ### For donors, families, and advisors #### The biggest obstacle to the §25F credit isn't politics, it's the adoption gap Once a state opts in and the program is live, the question that decides whether the Education Freedom Tax Credit works isn't political, it's whether ordinary taxpayers actually claim a credit that pays them back dollar-for-dollar. History says free money gets left on the table: workers skip employer 401(k) matches, and the no-cost presidential campaign checkoff fell from 29% participation to about 4%. The four frictions that suppress uptake (awareness, paperwork, cash-flow timing, and trust), why each one is fixable, and why adoption is won at the operator layer, not in the political fight. Audience: Advocates, SGO operators, donors, journalists, and policymakers. Updated 2026-10-01. Full article: https://eftccredit.com/learn/eftc-adoption-gap #### When do you actually get your §25F money? Claim the Education Freedom Tax Credit in your paycheck, not next year's refund Most people assume a January 2027 donation means waiting until the April 2028 refund to see the $1,700 back, roughly 16 months. It doesn't have to. The §25F credit is earned in the 2027 tax year, and federal withholding is adjustable in real time: with a corrected Form W-4, you recover the credit across your 2027 paychecks instead of lending it to the IRS interest-free. How the paycheck route works, why it's fully allowed (the W-4 is built to account for credits, and Treasury's October 2026 rules leave withholding to ordinary tax law), the three guardrails that keep it clean (you need the tax liability, you must actually make and designate the gift, and you should run the numbers with a preparer), how a two-earner couple plans for up to $3,400, why an after-tax payroll deduction counts as a cash gift, and a step-by-step for donors and their accountants. Audience: Donors, employees, and their tax advisors. Updated 2026-10-01. Full article: https://eftccredit.com/learn/eftc-paycheck-withholding #### The CPA's guide to the §25F Education Freedom Tax Credit: advising clients on the federal scholarship credit A practitioner's reference to IRC §25F (the EFTC / ECCA / FSTC) and Treasury's October 2026 proposed and temporary regulations: the $1,700 dollar-for-dollar credit, why it works for standard-deduction clients, what binds and what clients may rely on, the §25F(e) double-benefit bar, the state-credit reduction applied before the cap, AMT and the §26(a) ordering, the 5-year FIFO carryforward, up to $3,400 on a joint return when each spouse gives, the cash and designation rules, the partnership and S corporation rule, the IRS SGO list, the unique donor number and Form 8525, and year-end planning pointers, each rule cited to the statute or the regulation paragraph. Audience: CPAs, enrolled agents, and tax advisors. Updated 2026-10-01. Full article: https://eftccredit.com/learn/eftc-guide-for-cpas #### Year-end tax planning and the EFTC: which December matters The Education Freedom Tax Credit takes effect January 1, 2027, which turns the usual year-end playbook upside down for one transition year: a cash gift to an SGO in December 2026 earns no federal credit, while the identical gift three weeks later, designated as a §25F gift, comes back dollar-for-dollar, up to $1,700 per taxpayer ($3,400 for a married couple when each spouse gives). What a 2026 gift is still worth (the §170 deduction, state scholarship credits), why to check the IRS SGO list before a January 2027 gift, why December 31, 2027 becomes the first real EFTC deadline, the cash-only and designation rules, the no-double-benefit rule, the five-year carryforward, the paperwork Treasury's October 2026 rules require, and a planning checklist by calendar. Audience: Donors and their advisors planning charitable gifts. Updated 2026-10-01. Full article: https://eftccredit.com/learn/eftc-year-end-tax-planning #### The EFTC, explained for your community: a shareable one-pager A plain-language, forward-it-to-anyone explainer of the new federal scholarship tax credit: what it is (up to $1,700 per person off your federal taxes, dollar for dollar, for donating to a scholarship organization, or $3,400 for a married couple who each give), when it starts (January 1, 2027), who qualifies, how to check your state, the four steps to actually do it, whether you can support your own school, and the honest fine print. Written for parent lists, congregation emails, and community group chats. Audience: Parents, community members, and anyone sharing the program. Updated 2026-10-01. Full article: https://eftccredit.com/learn/eftc-community-explainer #### Can donors direct an EFTC gift to a specific school? What §25F actually prohibits Section 25F bans earmarking a donation for any particular student, and that ban is student-level, not school-level. Treasury's October 2026 proposed rules restate it but say nothing about school preferences, which remain common practice in state scholarship-credit programs. What donors can and cannot direct, the §25F and state designations the rules do require, the disqualified-person limits on donors' own families, and the award rules the SGO must still follow. Audience: Donors, schools, and SGO operators. Updated 2026-10-01. Full article: https://eftccredit.com/learn/designating-gifts-to-schools #### Can the EFTC help public-school students? What §25F actually allows The Education Freedom Tax Credit (§25F) is often described as a private-school program, but its eligibility is student-based, not school-based, and it defines qualified expenses by reference to the IRC §530(b)(3)(A) Coverdell list, which covers academic tutoring, special-needs services, books, supplies, and computer technology. A public-school student from a qualifying household can receive scholarship support, and Treasury's October 2026 fact sheet lists tutoring for students attending a local public school as an example. What the statute and Treasury's proposed rules allow, including a safe harbor for school-based tutoring in low-income areas, what happens in practice today, and the honest limits. Audience: Public-school families, advocates, journalists, and SGO founders. Updated 2026-10-01. Full article: https://eftccredit.com/learn/eftc-for-public-schools #### The §25F donor number: how the IRS matches your scholarship tax credit (no SSN to the SGO) Treasury's §25F regulations (previewed in June 2026, issued October 1, 2026) set up a unique donor number for the federal Education Freedom Tax Credit: the Scholarship Granting Organization issues each donor a number on a written acknowledgment, reports contributions to the IRS under it, and the donor reports it on Form 8525, so the IRS can match a claimed credit to a real donor and a real SGO without the donor ever handing the SGO a Social Security number. What the number is, how it flows, and what it means for donors and SGO operators. Audience: Donors, tax advisors, SGO founders and operators. Updated 2026-10-01. Full article: https://eftccredit.com/learn/25f-donor-number #### What is the Education Freedom Tax Credit? The EFTC explained The Education Freedom Tax Credit (EFTC) is the new federal tax credit for donations to K-12 scholarship organizations, worth up to $1,700 per taxpayer ($3,400 for a married couple who each give, under Treasury's proposed rules) and starting January 1, 2027. What the credit does, what Treasury's October 2026 rules settled for donors, where the name comes from, what it means for donors, families, schools and scholarship organizations, and where each state stands. Audience: Anyone new to the program, donors, families, schools, operators. Updated 2026-10-01. Full article: https://eftccredit.com/learn/education-freedom-tax-credit #### What is the Federal Scholarship Tax Credit? The FSTC explained Federal Scholarship Tax Credit (FSTC) is the term the IRS uses for the federal K-12 scholarship donation credit at IRC §25F. What the credit is, why the IRS uses this name, how it behaves as a tax item (non-refundable, five-year carryforward, cash only, no double benefit), and what tax professionals need to know before the 2027 tax year. Audience: Taxpayers, CPAs, tax advisors, anyone researching the IRS term. Updated 2026-10-01. Full article: https://eftccredit.com/learn/federal-scholarship-tax-credit #### What is ECCA? The Educational Choice for Children Act explained A complete guide to the Educational Choice for Children Act (ECCA), also known as the Federal Scholarship Tax Credit (FSTC) and codified at IRC §25F. How the federal scholarship tax credit works, who qualifies, when it begins, and what state participation means. Audience: Anyone new to the program, parents, donors, educators, advocates. Updated 2026-10-01. Full article: https://eftccredit.com/learn/what-is-ecca #### How donors claim the $1,700 scholarship tax credit: rules, carryforward and examples How the Education Freedom Tax Credit (EFTC / §25F) works for donors: $1,700 per taxpayer ($3,400 for a married couple who each give, under Treasury's proposed rules), 5-year carryforward, non-refundable, cash only, no double-deduction with §170, plus worked examples. Audience: Donors, taxpayers, accountants. Updated 2026-10-01. Full article: https://eftccredit.com/learn/federal-tax-credit-explained #### EFTC scholarship eligibility: who qualifies and what's covered Which K-12 students qualify for EFTC scholarships, the income limits, what schools and educational expenses are covered, and how families apply through a Scholarship Granting Organization (SGO). Audience: Parents and guardians of K-12 students. Updated 2026-10-01. Full article: https://eftccredit.com/learn/scholarship-eligibility #### When a state opts out of the EFTC, the money leaves with it The Education Freedom Tax Credit is federal, so residents can claim up to $1,700 each whether or not their state opts in, by giving to an SGO in any participating state. But under Treasury's October 2026 rules, scholarships go only to students who live in a participating state. Opt out, and your residents fund students elsewhere. The math, the stakes, and why opting in costs the state nothing in scholarship money. Audience: Advocates, voters, legislators, journalists, and state officials. Updated 2026-10-01. Full article: https://eftccredit.com/learn/state-opt-out-money-leaves #### How states opt in to the EFTC: the governor certification process How a state opts in to the federal EFTC scholarship program under Treasury's October 2026 temporary regulations: the election by the governor or a state-law designee, Form 15714 by January 1, 2027 and the SGO list by February 15, 2027, what the state must certify, why it must list every qualifying SGO, legislative vs. executive paths, what citizens can do, and what happens when a state doesn't participate. Audience: Advocates, voters, legislators, journalists. Updated 2026-10-01. Full article: https://eftccredit.com/learn/governor-opt-in-process #### EFTC for families of students with disabilities or special education needs How families of K-12 students with disabilities can use EFTC scholarships for special-needs services, tutoring, private-school tuition, and assistive technology under Treasury's October 2026 proposed regulations: the low-income-area safe harbor for school-selected services, need-based priority, how providers get paid, and what still awaits Treasury's §530 guidance. Audience: Parents of K-12 students with disabilities or IEPs. Updated 2026-10-01. Full article: https://eftccredit.com/learn/ecca-special-needs #### EFTC for homeschool and microschool families: what's covered and how to apply Whether and how homeschool, microschool, learning-pod, and hybrid-school families can use EFTC scholarships under Treasury's October 2026 proposed rules: the state-law "school" test, which expenses qualify, how SGOs must pay, and how to find an SGO that supports your educational model. Audience: Homeschool, microschool, hybrid-school families. Updated 2026-10-01. Full article: https://eftccredit.com/learn/ecca-homeschool-microschool #### Every kid is “eligible.” In half the states, homeschoolers still can’t use the federal scholarship Nearly every K-12 child can be an eligible student under the federal Education Freedom Tax Credit (EFTC / §25F). But the scholarship can only pay for expenses tied to a “school,” and the law, and Treasury’s October 2026 proposed rules, send that word back to each state. An interactive 50-state + DC map: where homeschoolers can likely use the scholarship, where they likely can’t, and the 29 states where it comes down to one box on a form. Audience: Homeschool families, SGOs, policy advocates, journalists. Updated 2026-10-01. Full article: https://eftccredit.com/learn/homeschool-eligibility-by-state #### EFTC vs. state scholarship tax credit programs: how they compare How the federal EFTC tax credit compares to existing state-level scholarship tax credit programs, whether donors can stack the two, and what families should know about each. Audience: Donors and families in states with their own scholarship credits. Updated 2026-10-01. Full article: https://eftccredit.com/learn/ecca-vs-state-tax-credits #### EFTC vs. 529 plans and Coverdell ESAs: how the federal scholarship tax credit compares to education savings accounts The Education Freedom Tax Credit (EFTC / §25F), 529 plans, and Coverdell ESAs are three different federal K-12 tax benefits, and the same 2025 law (the One Big Beautiful Bill) both created the EFTC and expanded 529 plans. How each one works, who it's for, and how one family can use more than one. Audience: Families and donors weighing K-12 education funding options. Updated 2026-10-01. Full article: https://eftccredit.com/learn/eftc-vs-529-and-esas #### EFTC, FSTC, ECCA or §25F: why one program has four names EFTC, FSTC, ECCA and §25F all name the same federal K-12 scholarship tax credit. Treasury's press releases and advocacy groups say EFTC; the IRS, Treasury's October 2026 regulations and Form 8525 say Federal Scholarship Tax Credit (FSTC); Congress passed it as ECCA; and tax professionals cite §25F. Which name to use, who uses which, and how to tell they are the same thing. Audience: Anyone confused by the program's many names. Updated 2026-10-01. Full article: https://eftccredit.com/learn/what-is-fstc #### EFTC / §25F timeline: key dates from enactment to the 2027 launch A dated roadmap of the federal Education Freedom Tax Credit (EFTC / ECCA / §25F), each date marked done or upcoming: enactment, the advance election, Treasury's October 1, 2026 proposed and temporary regulations, the December 1 comment deadline and December 15 hearing, the January 1, 2027 launch and state election deadline, February 15, 2027 state SGO lists, and the 2028 acknowledgment, IRS reporting, filing, and 90% spending dates. Audience: Donors, families, SGOs, and advocates tracking the rollout. Updated 2026-10-01. Full article: https://eftccredit.com/learn/eftc-timeline-key-dates #### EFTC for private and faith-based schools: how to partner with an SGO How private, religious, and independent K-12 schools can benefit from the Education Freedom Tax Credit (EFTC / ECCA / §25F): how scholarship dollars reach your school through SGOs, what families need to qualify, and how to prepare for the January 2027 launch. Audience: Private, faith-based, and independent school leaders. Updated 2026-10-01. Full article: https://eftccredit.com/learn/eftc-for-private-schools #### SGO scholarships vs. ESAs vs. vouchers: how the three school-choice models compare The three main ways policy funds private education, tax-credit scholarships from SGOs (including the federal §25F / EFTC), education savings accounts (ESAs), and vouchers, compared on who funds them, who holds the money, eligibility, and how the federal credit fits and stacks. Audience: Families, donors, advocates. Updated 2026-10-01. Full article: https://eftccredit.com/learn/sgo-vs-esa-vs-voucher #### The federal SGO list: which organizations qualify and how donors verify one For a donation to earn the §25F credit, the scholarship granting organization must be on the list its state submits to the federal government. How an organization gets on that list, what makes it a qualifying SGO, why the IRS list can run behind a state's own roster, and how a donor confirms an organization qualifies before giving. Audience: Donors, SGO operators, tax advisors. Updated 2026-10-01. Full article: https://eftccredit.com/learn/federal-sgo-list #### What the Education Freedom Tax Credit pays for: the §530 qualified-expense list §25F does not define its own expense list. It borrows the Coverdell education savings account list at IRC §530(b)(3)(A), and Treasury's October 2026 proposed regulations keep that cross-reference while its separate §530 guidance is still pending. The list reaches far beyond private-school tuition: tutoring, special-needs services, books, supplies, computers, and internet access. What a §25F scholarship can and cannot pay for, why states cannot narrow it, and how the money gets paid. Audience: Families, donors, schools, SGO operators. Updated 2026-10-01. Full article: https://eftccredit.com/learn/qualified-expenses-25f ### For SGO operators #### What is an SGO? A guide to EFTC Scholarship Granting Organizations What an SGO is, how organizations get designated by their state, the 90/10 rule, what compliance looks like, and how donors and families choose between SGOs. Audience: Nonprofits, schools, donors, families. Updated 2026-10-01. Full article: https://eftccredit.com/learn/sgo-guide #### How to start a Scholarship Granting Organization (SGO) under the EFTC The complete, start-from-nothing guide to launching a Scholarship Granting Organization (SGO) for the federal Education Freedom Tax Credit (EFTC / ECCA / §25F): incorporating a nonprofit, getting an EIN, filing for 501(c)(3) (Form 1023 vs 1023-EZ, real fees and timelines), opening the required separate bank accounts, registering to fundraise, meeting every §25F operating rule, getting on your state's list, and a step-by-step checklist, written for founders with zero nonprofit experience. Audience: First-time founders, nonprofit leaders, schools, community groups. Updated 2026-10-01. Full article: https://eftccredit.com/learn/how-to-start-an-sgo #### Can your existing nonprofit become an SGO? The §25F retrofit, step by step You are already a 501(c)(3), so most of the formation work is behind you. What carries over (your exemption, EIN, and registrations), the one test that decides whether retrofitting is the right move (Treasury's 85% scholarship-activity safe harbor; below it, 90% of ALL gross receipts must go to scholarships), the five §25F gaps an existing organization has to close, the single board meeting that closes them, and when forming a separate entity is the honest answer instead. Audience: Existing 501(c)(3) leaders, school foundations, scholarship funds, church and community nonprofits. Updated 2026-10-01. Full article: https://eftccredit.com/learn/existing-nonprofit-to-sgo #### The 90/10 rule and §25F compliance requirements for SGOs, explained A deep dive into the federal §25F rules every Scholarship Granting Organization must meet, updated for Treasury's October 2026 proposed regulations: the 90/10 rule (90% of income to scholarships, measured on total gross receipts or, under the 85% safe harbor, on the §25F account), the deadline to spend each year's income, the 10-student rule, renewal and sibling priority, anti-earmarking, disqualified persons, separate accounts, donor substantiation, and income verification. Audience: SGO operators, boards, nonprofit finance and compliance staff. Updated 2026-10-01. Full article: https://eftccredit.com/learn/sgo-90-10-rule-compliance #### The §25F proposed regulations, explained: what Treasury's October 2026 rules mean for donors, families, SGOs, and states A practical walkthrough of the §25F (EFTC / FSTC) proposed regulations and temporary regulations Treasury and the IRS released October 1, 2026, organized for donors, families, SGO operators, and states: what is binding, what is proposed and can be relied on for 2027, and what is still open. Covers the $3,400 joint-return reading, state-credit ordering, the 90% test and 85% safe harbor, income verification, payments and audits, donor numbers and Form 8525, state election deadlines, key dates, and what changed from Treasury's June preview. Audience: SGO founders and operators, donors, advisors, state officials. Updated 2026-10-01. Full article: https://eftccredit.com/learn/25f-proposed-regulations-preview #### SGO software: the management platform for Scholarship Granting Organizations (§25F) What SGO software does and why the federal §25F 90/10 rule makes it essential: donor onboarding and identity verification, payment processing, per-donor §25F receipts, family applications and income verification, an award engine with renewal and sibling priority, separate-account fund accounting, state reporting, and an audit trail. A buyer's checklist, a build-vs-buy guide, and the four buying-decision questions, pricing model, fund custody, disbursement controls, and data portability, to ask any vendor before you sign. Audience: SGO founders, operators, boards, nonprofit finance staff. Updated 2026-10-01. Full article: https://eftccredit.com/learn/sgo-software #### The SGO compliance calendar: §25F deadlines and recurring obligations A milestone-by-milestone view of what a Scholarship Granting Organization must do to stay compliant with §25F: state list timing, the 90/10 test, annual third-party audits, donor acknowledgments and unique donor numbers, separate-account rules, and yearly renewals. Audience: SGO operators, boards, nonprofit finance and compliance staff. Updated 2026-10-01. Full article: https://eftccredit.com/learn/sgo-compliance-calendar #### How SGOs disburse EFTC scholarship funds to schools and families Money-out is the hardest part of running a Scholarship Granting Organization. The four payment routes Treasury's October 2026 proposed rules allow (school charges paid to the school, verified vendors, receipted family reimbursements, qualified digital wallets), why scholarship money must stay in the §25F segregated account, the record every disbursement needs, when a payment counts toward the 90% test, and the controls that keep disbursement audit-clean. Audience: SGO operators, boards, nonprofit finance staff. Updated 2026-10-01. Full article: https://eftccredit.com/learn/disbursing-funds-to-schools #### Income verification for SGOs: confirming household eligibility under §25F Every §25F scholarship goes to a household at or below 300% of area median gross income, and the SGO must confirm it. How Treasury's October 2026 proposed rules define AMGI, the household, and household income, the four verification methods (direct documents, SNAP/TANF/WIC/Section 8/SSI award letters, the low-income tutoring and special-needs safe harbor, and foster children), how to size the award, and how to keep records that survive the annual audit. Audience: SGO operators, program staff, boards. Updated 2026-10-01. Full article: https://eftccredit.com/learn/income-verification-for-sgos #### How to recruit donors for your SGO under the Education Freedom Tax Credit A §25F scholarship organization runs on donations, and the credit changes the pitch: a donor redirects up to $1,700 of federal tax they already owe ($3,400 for a married couple when each spouse gives, under Treasury's proposed rules). Who your donors are (anywhere in the U.S.), the dollar-for-dollar message that lands, what counts as a qualifying gift, how the 90% rule and the 85% safe harbor limit what you can spend to find donors, and a first-year acquisition plan. Audience: SGO founders, operators, boards, development staff. Updated 2026-10-01. Full article: https://eftccredit.com/learn/recruiting-donors-for-your-sgo #### State tax-credit scholarship programs and the federal EFTC: how they stack Long before the federal Education Freedom Tax Credit, states ran their own tax-credit scholarship programs, Arizona, Florida, Pennsylvania, Indiana, Ohio, Georgia, Iowa and more. How those state programs work, how the new federal §25F credit interacts with them, whether a donor can use both, and what an organization already running a state program needs to know to add the federal layer. Audience: Existing state-program SGO operators, donors, advisors. Updated 2026-10-01. Full article: https://eftccredit.com/learn/state-tax-credit-scholarship-programs --- ## Primary law and official guidance Archived verbatim so a citation can be checked against the text rather than a paraphrase. ### 26 U.S.C. §25F, Qualified Elementary and Secondary Education Scholarships Verbatim statutory text of IRC §25F, the federal income tax credit for scholarship granting organization contributions enacted as part of the Educational Choice for Children Act (ECCA / FSTC). Category: Statute (enacted law). Citation: Public Law 119-21, title VII, §70411(a)(1) (enacted July 4, 2025). Issued: 2025-07-04. Effective: 2027-01-01. Official source: https://www.law.cornell.edu/uscode/text/26/25F Archived text: https://eftccredit.com/documents/section-25f ### 26 U.S.C. §139K, Exclusion from Gross Income for Qualified ECCA Scholarships Verbatim text of IRC §139K, which excludes ECCA / FSTC scholarship amounts from the gross income of recipients and their families. Companion provision to §25F. Category: Statute (enacted law). Citation: Public Law 119-21, title VII, §70411(b)(1) (enacted July 4, 2025). Issued: 2025-07-04. Effective: 2027-01-01. Official source: https://www.law.cornell.edu/uscode/text/26/139K Archived text: https://eftccredit.com/documents/section-139k ### 26 U.S.C. §530(b)(3), Definition of Qualified Elementary and Secondary Education Expenses Verbatim text of the Coverdell statute that defines the educational expenses ECCA / FSTC scholarships can fund, referenced directly by §25F. Treasury's October 2026 proposed rules also use its definition of "school"; separate §530 guidance is still to come. Category: Statute (enacted law). Citation: 26 U.S.C. §530(b)(3) (Coverdell ESA expense definition). Official source: https://www.law.cornell.edu/uscode/text/26/530 Archived text: https://eftccredit.com/documents/section-530-b3-coverdell-expenses ### Public Law 119-21, §70411(c), ECCA / FSTC Effective Dates The effective-date provisions of the One Big Beautiful Bill Act §70411, governing when §25F (the federal scholarship tax credit) and §139K (the scholarship income exclusion) take effect. Category: Legislative provision. Citation: Public Law 119-21, title VII, §70411(c) (enacted July 4, 2025). Issued: 2025-07-04. Effective: 2027-01-01. Official source: https://www.congress.gov/119/plaws/publ21/PLAW-119publ21.pdf Archived text: https://eftccredit.com/documents/obbba-section-70411-effective-dates ### IRS Notice 2025-70, Request for Comments on §25F Implementation IRS Notice 2025-70 (issued November 2025) requested public comment on implementation of the §25F federal scholarship tax credit. Treasury answered with proposed and temporary regulations on October 1, 2026; this page notes where the rules followed or departed from the Notice. Category: IRS guidance. Citation: IRS Notice 2025-70 (issued November 2025). Issued: 2025-11-25. Official source: https://www.irs.gov/pub/irs-drop/n-25-70.pdf Archived text: https://eftccredit.com/documents/irs-notice-2025-70 ### IRS Revenue Procedure 2026-6, Advance Election Procedure for §25F Covered States IRS Rev. Proc. 2026-6 (Internal Revenue Bulletin 2026-02) sets the exclusive procedure for states to make an Advance Election to participate in the §25F Federal Scholarship Tax Credit for calendar year 2027, using Form 15714. Category: IRS guidance. Citation: Rev. Proc. 2026-6, 2026-02 I.R.B. (released December 12, 2025). Issued: 2025-12-12. Official source: https://www.irs.gov/pub/irs-drop/rp-26-06.pdf Archived text: https://eftccredit.com/documents/rev-proc-2026-6 ### IRS Federal Scholarship Tax Credit (FSTC), Official Program Page The IRS's official landing page for the §25F Federal Scholarship Tax Credit (FSTC / ECCA), the authoritative source for the program's forms, guidance, and updates as they are released. Category: IRS guidance. Citation: Internal Revenue Service, Federal Scholarship Tax Credit (FSTC) program page. Official source: https://www.irs.gov/government-entities/federal-state-local-governments/federal-scholarship-tax-credit-fstc Archived text: https://eftccredit.com/documents/irs-fstc-program-page ### Treasury Preview of Forthcoming §25F Guidance, Remarks by DAS Kevin Salinger (June 9, 2026) Full text of Treasury Deputy Assistant Secretary Kevin Salinger's June 9, 2026 remarks previewing the §25F proposed regulations (the 90% segregated-account safe harbor, multistate SGOs, income verification, audits, donor numbers, the IRS portal), with notes on where the October 1, 2026 rules followed or departed from the preview. Category: IRS guidance. Citation: U.S. Department of the Treasury, Office of Tax Policy, remarks delivered June 9, 2026; published June 10, 2026. Issued: 2026-06-10. Official source: https://home.treasury.gov/system/files/136/Preview-of-Forthcoming-Guidance.pdf Archived text: https://eftccredit.com/documents/treasury-25f-guidance-preview ### Treasury Press Release, Treasury Previews Education Freedom Tax Credit Guidance (June 10, 2026) Full text of the U.S. Treasury's June 10, 2026 press release previewing Education Freedom Tax Credit (§25F) guidance and committing to proposed regulations taxpayers could rely on for tax year 2027. The proposed regulations followed on October 1, 2026. Category: IRS guidance. Citation: U.S. Department of the Treasury press release (June 10, 2026). Issued: 2026-06-10. Official source: https://home.treasury.gov/news/press-releases/sb0527 Archived text: https://eftccredit.com/documents/treasury-eftc-press-release-june-2026 ### Treasury Fact Sheet, President Trump Delivers Affordable School Choice Options Through the Education Freedom Tax Credit Full text of the June 2026 U.S. Treasury / Working Families Tax Cuts fact sheet on the Education Freedom Tax Credit (§25F): the $1,700 credit, how it works, who qualifies, eligible expenses, and program impact estimates. Superseded by Treasury's October 2026 fact sheet. Category: IRS guidance. Citation: U.S. Department of the Treasury, Education Freedom Tax Credit Fact Sheet (Working Families Tax Cuts), released with the June 10, 2026 guidance preview. Issued: 2026-06-10. Official source: https://home.treasury.gov/wftc/fact-sheets/education-freedom-tax-credit-fact-sheet-113147.pdf Archived text: https://eftccredit.com/documents/treasury-eftc-fact-sheet ### Treasury Press Release, Treasury and IRS Issue Proposed Regulations to Implement the Education Freedom Tax Credit (October 1, 2026) Full text of the U.S. Treasury's October 1, 2026 press release announcing the §25F proposed and temporary regulations: up to $3,400 for married couples filing jointly, no state add-on rules for SGOs, the 85% safe harbor, and Treasury's 2030 estimates. Category: IRS guidance. Citation: U.S. Department of the Treasury press release sb0641 (October 1, 2026). Issued: 2026-10-01. Official source: https://home.treasury.gov/news/press-releases/sb0641 Archived text: https://eftccredit.com/documents/treasury-eftc-press-release-october-2026 ### Treasury Fact Sheet (October 2026 update), President Trump Delivers Affordable School Choice Options Through Education Freedom Tax Credit Full text of the updated Treasury and Department of Education fact sheet on the Education Freedom Tax Credit (§25F), released October 1, 2026 with the proposed regulations: $1,700 per individual, $3,400 for married couples, 2027 deadlines, and 2030 estimates. Category: IRS guidance. Citation: U.S. Department of the Treasury, Education Freedom Tax Credit fact sheet (Treasury-ED EFTC FAQ), released with the October 1, 2026 proposed regulations. Issued: 2026-10-01. Official source: https://home.treasury.gov/system/files/136/Treasury-ED%20EFTC%20FAQ.pdf Archived text: https://eftccredit.com/documents/treasury-eftc-fact-sheet-october-2026 ### OMB Unified Agenda Entries for the §25F Rulemaking (RIN 1545-BR97 and 1545-BS17, REG-117199-25) Verbatim text of Treasury's two entries for the §25F (EFTC / FSTC) rulemaking in the 2026 Unified Agenda, published by OIRA on July 3, 2026. Both list a timetable action of Interim Final Rule, and the temporary-regulations entry states its purpose is to let states submit SGO lists in the fall of 2026 before final regulations publish. Includes the OIRA review record: both RINs were received for EO 12866 review on September 10, 2026, the temporary regulations at the Interim Final Rule stage and the proposed regulations at the Proposed Rule stage. Review concluded September 29, and both rules were released October 1, 2026. Category: IRS guidance. Citation: 2026 Unified Agenda of Federal Regulatory and Deregulatory Actions, TREAS/IRS, RIN 1545-BR97 and RIN 1545-BS17 (both REG-117199-25), published July 3, 2026. Issued: 2026-07-03. Official source: https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202510&RIN=1545-BS17 Archived text: https://eftccredit.com/documents/unified-agenda-25f-rin-entries ### Treasury Proposed Regulations under §25F, REG-117199-25 (Federal Scholarship Tax Credit, October 2026) The §25F proposed regulations (REG-117199-25, RIN 1545-BR97), filed for Federal Register public inspection October 1, 2026: married couples up to $3,400, the 90% test and 85% safe harbor, multistate SGOs, income verification, audits, donor numbers, and limits on state add-ons. Comments due December 1, 2026. Category: IRS guidance. Citation: REG-117199-25, RIN 1545-BR97, Federal Register Doc. 2026-20277, 91 FR 62818 (public inspection October 1, 2026; published October 2, 2026; docket IRS-2026-1354). Issued: 2026-10-01. Official source: https://www.federalregister.gov/documents/2026/10/02/2026-20277/federal-scholarship-tax-credit Archived text: https://eftccredit.com/documents/treasury-proposed-regulations ### Treasury Temporary Regulations under §25F, T.D. 10057 (State Elections, SGO Lists, and SGO Registration, October 2026) The §25F temporary regulations (T.D. 10057, RIN 1545-BS17), filed for Federal Register public inspection October 1, 2026: IRS SGO portal registration, donor acknowledgments and reporting, state elections and SGO lists, the February 15, 2027 list deadline, and the bar on state add-ons. Category: IRS guidance. Citation: T.D. 10057, RIN 1545-BS17, Federal Register Doc. 2026-20264, 91 FR 62655 (public inspection October 1, 2026; published October 2, 2026). Issued: 2026-10-01. Official source: https://www.federalregister.gov/documents/2026/10/02/2026-20264/federal-scholarship-tax-credit Archived text: https://eftccredit.com/documents/treasury-temporary-regulations-td-10057 ### IRS Form 8525, Federal Scholarship Tax Credit: The Donor Claim Form (Not Yet Released) Form 8525, Federal Scholarship Tax Credit, is the form donors will attach to Form 1040 to claim the §25F (EFTC / FSTC) credit, as named in Treasury's October 2026 proposed regulations. The form and its instructions have not yet been released. Category: Coming soon. Citation: Internal Revenue Service; named in proposed Treas. Reg. § 1.25F-2(g) (REG-117199-25, October 2026). Status: not yet issued. Archived text: https://eftccredit.com/documents/irs-form-25f --- ## §25F status, all 50 states and D.C. (as of 2026-10-05) - Alabama: Opted in. Governor Kay Ivey. https://eftccredit.com/states/alabama - Alaska: Opted in. Governor Mike Dunleavy. https://eftccredit.com/states/alaska On August 20, 2026 Alaska opened applications for approval as a §25F Scholarship Granting Organization, the second state to do so after Kentucky: a letter of interest attesting to federal compliance plus an IRS 501(c)(3) determination letter, emailed to the Department of Education and Early Development, with the first approvals expected by September 30, 2026. On October 2, 2026 Gov. Dunleavy approved the first 20 organizations; applications stay open on a rolling basis and the state expects to submit its 2027 list to the IRS by December 1, 2026. - Arizona: Governor vetoed. Governor Katie Hobbs. decided 2026-04-14. https://eftccredit.com/states/arizona Gov. Hobbs vetoed SB 1106 (Jan 16, 2026) and a second opt-in bill in April 2026, citing the need to wait for IRS regulations. - Arkansas: Opted in. Governor Sarah Huckabee Sanders. decided 2026-01-16. https://eftccredit.com/states/arkansas - California: No decision yet. Governor Gavin Newsom. https://eftccredit.com/states/california - Colorado: Opted in. Governor Jared Polis. decided 2025-12-05. https://eftccredit.com/states/colorado Polis called opting in a "no-brainer" and said he would "be crazy not to" take the federal credit for Colorado families. - Connecticut: No decision yet. Governor Ned Lamont. https://eftccredit.com/states/connecticut - Delaware: No decision yet. Governor Matt Meyer. https://eftccredit.com/states/delaware - District of Columbia: No decision yet. Governor Muriel Bowser. https://eftccredit.com/states/district-of-columbia Mayor (DC has no governor). - Florida: Opted in. Governor Ron DeSantis. decided 2026-01-28. https://eftccredit.com/states/florida - Georgia: Opted in. Governor Brian Kemp. https://eftccredit.com/states/georgia - Hawaii: Declined. Governor Josh Green. https://eftccredit.com/states/hawaii Gov. Green declined to make the 2027 advance election. In March 2026 the legislature introduced four resolutions (HR68, HCR74, SR148, SCR158) urging him to reconsider; the opt-in is annual, so Hawaii can still elect in for a later year. - Idaho: Opted in. Governor Brad Little. https://eftccredit.com/states/idaho Opted in by Gov. Little's February 2026 executive order; HB 731 (effective July 1, 2026) later wrote participation into permanent statute so it cannot lapse when an order expires. - Illinois: No decision yet. Governor JB Pritzker. https://eftccredit.com/states/illinois - Indiana: Opted in. Governor Mike Braun. decided 2026-01-22. https://eftccredit.com/states/indiana - Iowa: Opted in. Governor Kim Reynolds. decided 2026-01-05. https://eftccredit.com/states/iowa - Kansas: Opted in. Governor Laura Kelly. In by legislative override of the governor's veto, not by the sitting governor. decided 2026-04-13. https://eftccredit.com/states/kansas Kelly vetoed SB 361 on April 8; legislature overrode the veto during the April veto session (House 85-38, Senate 29-10). Kansas completed the formal federal advance election and appears on the IRS roster as of July 7, 2026. - Kentucky: Opted in. Governor Andy Beshear. In by legislative override of the governor's veto, not by the sitting governor. decided 2026-03-17. https://eftccredit.com/states/kentucky Beshear vetoed HB 1; legislature overrode the veto the next day. HB 1 assigns the annual §25F election to the Secretary of State (not the governor), so the filing does not depend on the governor's cooperation. On July 22, 2026, Secretary of State Michael Adams completed the federal advance election and filed a regulation opening Kentucky's SGO declaration process, the first state to open an SGO sign-up. Kentucky appeared on the IRS's official participating-states list on July 27, 2026, taking the official roster to 30. - Louisiana: Opted in. Governor Jeff Landry. decided 2025-12-17. https://eftccredit.com/states/louisiana - Maine: No decision yet. Governor Janet Mills. https://eftccredit.com/states/maine - Maryland: No decision yet. Governor Wes Moore. https://eftccredit.com/states/maryland - Massachusetts: No decision yet. Governor Maura Healey. https://eftccredit.com/states/massachusetts - Michigan: No decision yet. Governor Gretchen Whitmer. https://eftccredit.com/states/michigan - Minnesota: Declined. Governor Tim Walz. decided 2026-03-24. https://eftccredit.com/states/minnesota Walz said opting in is "never going to happen"; his supplemental budget had proposed ending longstanding state nonpublic pupil and transportation aid if Minnesota opted in. - Mississippi: Opted in. Governor Tate Reeves. https://eftccredit.com/states/mississippi - Missouri: Opted in. Governor Mike Kehoe. https://eftccredit.com/states/missouri - Montana: Opted in. Governor Greg Gianforte. https://eftccredit.com/states/montana - Nebraska: Opted in. Governor Jim Pillen. decided 2025-09-29. https://eftccredit.com/states/nebraska - Nevada: Opted in. Governor Joe Lombardo. https://eftccredit.com/states/nevada - New Hampshire: Opted in. Governor Kelly Ayotte. decided 2026-01-29. https://eftccredit.com/states/new-hampshire Opted in via Gov. Ayotte's January 2026 advance election (final and on the IRS official list, independent of the implementing bill). In June 2026 the legislature passed HB 1774, the §25F implementing statute (Dept. of Revenue Administration participates and auto-renews; Dept. of Education builds and submits the qualifying-SGO list), through both chambers (Senate May 14, House May 21); awaiting final enactment. - New Jersey: No decision yet. Governor Mikie Sherrill. https://eftccredit.com/states/new-jersey - New Mexico: Declined. Governor Michelle Lujan Grisham. decided 2026-01-27. https://eftccredit.com/states/new-mexico - New York: Announced (not finalized). Governor Kathy Hochul. decided 2026-05-08. https://eftccredit.com/states/new-york Hochul announced intent to opt in May 8, 2026 via her FY2027 budget proposal, but said she will review IRS guidance before formally finalizing; not yet certified. After Treasury released the rules on Oct 1, 2026, her office said it is "carefully reviewing the proposed regulations"; still no advance election filed. - North Carolina: Opted in. Governor Josh Stein. In by legislative override of the governor's veto, not by the sitting governor. decided 2026-06-03. https://eftccredit.com/states/north-carolina Stein vetoed HB 87; the House overrode on May 20, 2026 and the Senate completed the override 30-19 along party lines on June 3, 2026, enacting the bill over the governor's objection. North Carolina is now opted in via legislative override (no gubernatorial action required). - North Dakota: Opted in. Governor Kelly Armstrong. decided 2026-01-26. https://eftccredit.com/states/north-dakota - Ohio: Opted in. Governor Mike DeWine. https://eftccredit.com/states/ohio - Oklahoma: Opted in. Governor Kevin Stitt. https://eftccredit.com/states/oklahoma Opted in by Gov. Stitt's Executive Order 2026-03 (January 27, 2026); HB 3704 later codified participation and named the Oklahoma Tax Commission as SGO administrator. - Oregon: Declined. Governor Tina Kotek. decided 2025-08-14. https://eftccredit.com/states/oregon - Pennsylvania: No decision yet. Governor Josh Shapiro. https://eftccredit.com/states/pennsylvania - Rhode Island: No decision yet. Governor Dan McKee. https://eftccredit.com/states/rhode-island - South Carolina: Opted in. Governor Henry McMaster. https://eftccredit.com/states/south-carolina - South Dakota: Opted in. Governor Larry Rhoden. https://eftccredit.com/states/south-dakota - Tennessee: Opted in. Governor Bill Lee. In by statute, election made by the Tennessee Department of Education under Public Chapter 720. decided 2026-05-05. https://eftccredit.com/states/tennessee Gov. Lee said in January 2026 that Tennessee would participate, but the operative act is SB 2206, the Federal Tax Credit Scholarship Act, enacted May 5, 2026 as Public Chapter 720, which directs the Department of Education to make the election, certify SGOs, and submit the list to Treasury. - Texas: Opted in. Governor Greg Abbott. decided 2025-12-10. https://eftccredit.com/states/texas - Utah: Opted in. Governor Spencer Cox. https://eftccredit.com/states/utah - Vermont: No decision yet. Governor Phil Scott. https://eftccredit.com/states/vermont Enacted H.933 as Act 164 (signed June 18, 2026): a conditional, public-schools-first §25F opt-in. Treasury's October 1, 2026 regulations bar states from imposing SGO conditions more restrictive than §25F, the circumstance in which Act 164 directs the Governor to decline until the legislature acts again. - Virginia: Opted in. Governor Abigail Spanberger. Election made by Gov. Glenn Youngkin, inherited by the sitting governor. decided 2026-01-01. https://eftccredit.com/states/virginia Outgoing Gov. Youngkin (R) filed the election days before leaving office, effective January 1, 2026; Spanberger inherited it. Under Treasury's temporary regulations (Oct. 2026) that advance election counts for 2027 only if Virginia files its SGO list with the IRS by February 15, 2027; on October 2, 2026 the Virginia Education Association urged her not to file, and she has not announced a decision. Youngkin's January 9, 2026 letter to Treasury named eight organizations. - Washington: No decision yet. Governor Bob Ferguson. https://eftccredit.com/states/washington - West Virginia: Opted in. Governor Patrick Morrisey. https://eftccredit.com/states/west-virginia In via the governor's executive advance election and on the IRS official roster, independent of HB 4588 (the bill that would have named the State Treasurer as administrator, which died in conference). West Virginia has not designated a certifying office. - Wisconsin: Governor vetoed. Governor Tony Evers. decided 2026-03-30. https://eftccredit.com/states/wisconsin Vetoed AB 602 after earlier declining (Sep 2025). - Wyoming: Opted in. Governor Mark Gordon. https://eftccredit.com/states/wyoming Live map and table: https://eftccredit.com/states --- ## Free tools (no signup) ### Federal Scholarship Tax Credit Calculator (§25F) Estimate your $1,700 federal scholarship tax credit (§25F), or up to $3,400 for a married couple when each spouse gives, under Treasury's proposed rules. Because the credit is nonrefundable, it can only offset tax you actually owe, so this calculator estimates your federal tax liability first, applies any state tax credit for the gift, and shows how much credit you can use this year and how much carries forward. Use it: https://eftccredit.com/tools/tax-credit-calculator ### Which states have opted in to the federal scholarship tax credit? A live tracker of where all 50 states + DC stand on the federal Education Freedom Tax Credit (§25F): opted in, committed, pending, declined, or vetoed. Pick your state to see what its status means for donors and for students who live there. Use it: https://eftccredit.com/tools/state-opt-in-tracker ### Scholarship eligibility checker (§25F income & 300% AMI) See whether your family is likely eligible for a §25F scholarship. The federal rule covers households at or below 300% of your area's median gross income, and Treasury's proposed rules add shortcuts for foster children and for families on SNAP, TANF, WIC, Section 8 housing, or SSI. Use it: https://eftccredit.com/tools/scholarship-eligibility-calculator ### What does a §25F scholarship cover? Qualified-expenses checker Check whether an education expense (tuition, tutoring, curriculum, technology, therapies, and more) can be paid with a §25F scholarship: covered, covered if the school requires or provides it, awaiting Treasury guidance, depends on state law, or not covered, with the reasoning for each. Use it: https://eftccredit.com/tools/qualified-expenses ### SGO 90/10 rule compliance calculator Check whether your Scholarship Granting Organization meets the §25F 90/10 rule under Treasury's proposed regulations. Enter a year's income and the scholarships paid from it to see your scholarship ratio, the 10% left for other uses, and how much more you must pay out by the end of the following year. Use it: https://eftccredit.com/tools/90-10-compliance-calculator ### How much does it cost to start an SGO? Startup cost & timeline estimator Estimate what it costs and how long it takes to launch a Scholarship Granting Organization: incorporation, the IRS 501(c)(3) application (Form 1023 vs 1023-EZ), charitable-solicitation registration per state, and a registered agent, with a low-to-high range and a realistic timeline. Use it: https://eftccredit.com/tools/sgo-startup-cost-calculator ### SGO revenue & scholarship projector Model your Scholarship Granting Organization's potential: enter your expected number of donors and average donation to project gross funds raised, the at-least-90% that goes to scholarships, the up-to-10% left for operations, and how many students you could fund. Use it: https://eftccredit.com/tools/sgo-revenue-projector --- ## News archive, full text Federal, state, and regulatory developments, newest first. Reproduced in full. ### With the §25F rules out, Illinois churches turn up the pressure on Pritzker: a South Side rally, the Catholic Conference, and a letter read in parishes Date: 2026-10-04. Category: state-action. State: IL. Gov. JB Pritzker said for months that he could not decide on the Education Freedom Tax Credit until Treasury wrote the rules. [The rules came out on October 1](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026), and his office's answer since then has been that it [is reviewing them](https://eftccredit.com/news/democratic-governors-review-25f-rules-hochul-pritzker-sherrill-healey-october-2026). Over the following four days, the push to opt in moved from Springfield statements to church pulpits. Sunday on the South Side. On October 4, Bishop Larry D. Trotter, senior pastor of Sweet Holy Spirit Church of Chicago, hosted a gathering at the church on South Chicago Avenue to call on Pritzker to opt in. Organizers put the turnout at more than 500 South Side residents, along with faith, education, and community leaders. The pitch was about public school students as much as private ones: "Students need tutoring, technology, special education services and other learning supports today more than ever," Trotter said. Bishop Antonio Rocquemore of Powerhouse International Ministries Church framed it as a choice about where the money goes: "The choice is whether Illinois positions its own students to benefit from these new resources." The Catholic Conference. Two days earlier, on October 2, the Catholic Conference of Illinois issued its own call. "This is a win-win for nearly all Illinois children," executive director Robert Gilligan said. "Eighty percent of Catholic families send their children to public schools, and this program could help fund existing shortfalls in public schools, such as transportation, tutoring assistance, educational supplies and special education services. In addition, Catholic school students could also benefit with much-needed scholarships for tuition." (The statute's expense list, borrowed from Coverdell education savings accounts, names academic tutoring, special needs services, and transportation required or provided by a school; Treasury's separate guidance on qualified expenses is still to come.) In the week before, Catholic parishes in the Archdiocese of Chicago circulated a letter from Cardinal Blase Cupich asking parishioners to urge the governor to opt in, warning that if Illinois stays out, its taxpayers "may send as much as $1 billion for educational services in other states." That figure is the archdiocese's estimate. Why the money argument works the way it does. The credit is federal, so an Illinois resident can claim it whether or not Pritzker opts in, by giving to a scholarship organization in one of the [30 participating states](https://eftccredit.com/news/give-to-any-of-30-states-25f-scholarships-follow-student-residence-october-2026) ([see which organizations those states have approved](https://eftccredit.com/sgos/approved)). What a non-participating state loses is the scholarships: under the rules, each scholarship goes to students in the state that listed the organization. That is the point every speaker in this campaign is making. Illinois has been here before; its own tax-credit scholarship, Invest in Kids, ended when the legislature let it expire at the end of 2023. The other side. The Illinois Education Association opposes participation, and Pritzker has said he is worried about discrimination and accountability. Under Treasury's temporary rules a participating state [cannot add SGO requirements tougher than the federal law](https://eftccredit.com/news/one-national-standard-states-cannot-add-sgo-rules-25f-october-2026), which removes one middle path a Democratic governor might have taken. This is the same pressure that has been building since August, when [a Chicago Board of Education member asked Pritzker to opt in](https://eftccredit.com/news/chicago-board-member-gutierrez-pritzker-opt-in-25f-august-2026) against his own board's resolution. The clock. To take part in 2027, Pritzker has to file the advance election (IRS Form 15714) by January 1, 2027, and Illinois then has until February 15, 2027 to send the IRS its list of scholarship organizations ([full calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026)). Organizations that want to be on that list can do the federal groundwork now with the free [SGO Builder](https://eftccredit.com/build); the [Illinois page](https://eftccredit.com/states/illinois) tracks the decision. Sources: - Citizen Newspaper Group (Oct. 2026): Bishop Trotter to lead over 500 Southside residents, Illinois faith and community leaders as they publicly urge Governor Pritzker to opt Illinois into Federal Scholarship Tax Credit program: https://citizennewspapergroup.com/news/2026/oct/02/bishop-trotter-to-lead-over-500-southside-residents-illinois-faith-and-community-leaders-as-they-will-publicly-urge-governor-pritzker-to-opt-illinois-into-federal-scholarship-tax-credit-program/ - WAND (Oct. 2, 2026): Catholic Conference of Illinois urges Pritzker to opt into Federal Scholarship Tax Credit program: https://www.wandtv.com/2026/10/02/catholic-conference-illinois-urges-pritzker-opt-into-federal-scholarship-tax-credit-program/ - Catholic Conference of Illinois: Federal Scholarship Tax Credit Program: https://www.ilcatholic.org/federal-scholarship-tax-credit-program/ - Wirepoints (Sept. 27, 2026): Archbishop of Chicago urges Catholics to ask Pritzker to allow Illinois to join new federal Tax Credit Scholarship Program: https://wirepoints.org/archbishop-of-chicago-catholics-urges-pritzker-to-allow-illinois-to-join-new-federal-tax-credit-scholarship-program/ - Chalkbeat (Oct. 2, 2026): Education tax credit rules are here. Will they lure Democratic governors off the fence?: https://www.chalkbeat.org/2026/10/02/federal-education-tax-credits-rules-pose-test-for-democratic-governors/ Canonical: https://eftccredit.com/news/illinois-faith-leaders-catholic-conference-urge-pritzker-opt-in-25f-october-2026 ### The §25F rules Democratic governors were waiting for are out. Hochul, Pritzker, Sherrill and Healey are still reviewing Date: 2026-10-02. Category: state-action. State: NY. Update, October 5, 2026: Oregon Gov. Tina Kotek's office told Chalkbeat she is reviewing the rules but has no plans to change her position against participating. The Boston Globe editorial board urged Healey on October 2 to opt in ("Take the money, governor"), citing an American Federation for Children estimate of $459 million in 2027 if 10% of eligible Massachusetts taxpayers give. On October 3, Lindsey Burke, deputy chief of staff for policy and programs at the U.S. Department of Education, told Fox News Digital that the pull of donors giving to other states' scholarship groups "is going to encourage all 50 states to ultimately opt in." In Illinois, [church leaders and the Catholic Conference are pressing Pritzker](https://eftccredit.com/news/illinois-faith-leaders-catholic-conference-urge-pritzker-opt-in-25f-october-2026); in Virginia, [the teachers union asked Spanberger not to file the state's list](https://eftccredit.com/news/virginia-2027-hinges-on-sgo-list-vea-urges-spanberger-not-to-file-october-2026). For most of 2026, the standard answer from undecided Democratic governors was that they could not decide on the Education Freedom Tax Credit until Treasury explained how it would work. [Those rules came out on October 1](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026) and were published in the Federal Register on October 2. The first round of responses, given to reporters on Thursday, shows the waiting is not over yet: every governor's office that answered said it is reviewing the regulations, and none announced a decision. New York. Gov. Kathy Hochul is the closest to a yes. She [said in May](https://eftccredit.com/news/new-york-governor-hochul-opts-in-may-2026) that New York would take part unless the rules contained "poison pills," but the state has never filed the advance election that would put it on the IRS list. Chalkbeat reported that she "declined Thursday to make it official." Her spokesperson, Jonah Allon, told Jewish Insider: "If properly implemented, and structured so all students can benefit, the federal scholarship tax credit can expand opportunity without diverting funding from public schools, state or local budgets. The Administration is carefully reviewing the proposed regulations to ensure implementation would achieve these goals." Our [New York page](https://eftccredit.com/states/new-york) keeps the state as committed, not opted in. Illinois. Gov. JB Pritzker had pointed to the missing federal rules as a reason not to act. His office said Thursday it "is currently reviewing the newly released guidance" and "will carefully evaluate the proposed regulations and make a decision grounded in what best supports working families, students, and our public schools" (statement published by Capitol Fax). Background on the Illinois debate is on our [Illinois page](https://eftccredit.com/states/illinois). New Jersey. A spokesperson for Gov. Mikie Sherrill, who [has stayed noncommittal since May](https://eftccredit.com/news/new-jersey-sherrill-noncommittal-25f-evaluate-may-2026), said: "As we carefully review this federal guidance, we are examining who the program would serve, which opportunities are available, and how it could best benefit public school students." Massachusetts. Gov. Maura Healey, whose administration [said in June it was waiting on Treasury](https://eftccredit.com/news/massachusetts-healey-awaits-treasury-rules-25f-pressure-june-2026), was asked about the rules Thursday. "What I understand is that Treasury has released temporary regulations. I don't know what that means," she said, according to State House News Service. "We'll have to see what these regulations say, and also to get more clarity about what they mean by temporary." The short answer: the temporary regulations cover the launch mechanics (state elections, SGO lists, IRS registration, donor receipts) and take effect without a comment period, applying from September 1, 2026, while the longer proposed rule is open for comment until December 1. Others. Washington, D.C.'s Office of the State Superintendent of Education said it is "reviewing the temporary regulations and proposed rulemaking." Jewish Insider reported that the offices of Pennsylvania Gov. Josh Shapiro and Maryland Gov. Wes Moore did not respond to requests for comment. By Chalkbeat's count, 18 Democratic governors besides Hochul have yet to make a decision. Colorado's Jared Polis is still the only sitting Democratic governor to have opted a state in. Virginia, Kansas, Kentucky and North Carolina also have Democratic governors and are on the IRS list, but they got there through a predecessor's election or a legislative veto override. What the rules answer for them. Two concerns came up again and again in these governors' earlier statements: whether public school students can benefit, and whether a state could shape the program. On the first, Treasury says plainly that public school students can receive scholarships, and the expense list in the law (borrowed from Coverdell education savings accounts) includes tutoring and special needs services; Treasury's detailed guidance on which expenses qualify is still to come. On the second, the answer is no: a participating state [may not impose rules more restrictive than §25F](https://eftccredit.com/news/one-national-standard-states-cannot-add-sgo-rules-25f-october-2026) and must list every qualifying SGO located in the state that asks. Supporters, including the Teach Coalition and Agudath Israel of America, argue the rules remove the last reason to wait. The American Federation of Teachers and the National Education Association are urging governors to stay out. The clock. To take part in 2027, a governor makes the advance election (IRS Form 15714) by January 1, 2027, and the state then submits its SGO list to the IRS by February 15, 2027 ([full calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026)). A state that sits out does not stop its residents from claiming the credit: they can still [give to SGOs serving students in any of the 30 participating states](https://eftccredit.com/news/give-to-any-of-30-states-25f-scholarships-follow-student-residence-october-2026). What a state gives up is scholarship money for its own students. For the state-by-state picture, see the [participation map](https://eftccredit.com/states). Sources: - Chalkbeat (Oct. 2, 2026): Education tax credit rules are here. Will they lure Democratic governors off the fence?: https://www.chalkbeat.org/2026/10/02/federal-education-tax-credits-rules-pose-test-for-democratic-governors/ - Jewish Insider (Oct. 2026): Democratic governors face deadline on federal education tax credit: https://jewishinsider.com/2026/10/democratic-governors-deadline-federal-education-tax-credit/ - Capitol Fax (Oct. 1, 2026): Pritzker office statement on the federal rules: https://capitolfax.com/2026/10/01/feds-release-school-voucher-tax-credit-rules-pritzker-said-he-was-waiting-for/ - State House News Service via WWLP / Yahoo News (Oct. 2, 2026): Divisions remain after feds roll out scholarship tax credit regs: https://www.yahoo.com/news/politics/articles/divisions-remain-feds-roll-scholarship-144332794.html - Federal Register, Oct. 2, 2026: Federal Scholarship Tax Credit, temporary regulations, 91 FR 62655: https://www.federalregister.gov/documents/2026/10/02/2026-20264/federal-scholarship-tax-credit Canonical: https://eftccredit.com/news/democratic-governors-review-25f-rules-hochul-pritzker-sherrill-healey-october-2026 ### Virginia's 2027 participation now comes down to one filing, and the state teachers union has asked Spanberger not to make it Date: 2026-10-02. Category: state-action. State: VA. Virginia was the [first state to opt into §25F](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), through an advance election Gov. Glenn Youngkin filed days before leaving office in January. Until October 1, the common reading was that Gov. Abigail Spanberger had inherited Virginia's 2027 participation and would decide only about later years. Treasury's temporary regulations change that. An advance election, they say, must be perfected: the state "must perfect its election by providing its State SGO list" (§ 1.25F-5T(c)(3)(ii)). For 2027 the window runs from October 1, 2026 through February 15, 2027. A state that never sends the list has no qualifying organizations for 2027. The union's ask. The Virginia Education Association read the rules the same way and acted on them the next day. "Governor Spanberger can keep Virginia from taking on this additional risk," VEA president Carol Bauer said in an October 2 statement. "We urge her not to complete enrollment in the federal voucher program." The union attached a cost scenario: if 4% of public school operating support were lost, that would be about $940 million a year statewide, built from Virginia Department of Education spending data for fiscal 2025 and Arizona's experience with its education savings account program. That is the union's own illustration, not a state projection; VEA presents it as a sense of scale, not a ceiling. §25F scholarships are paid from private donations, not the state budget; the union's argument is about enrollment shifting away from public schools over time. What Spanberger has said. Little, so far. Her campaign education plan pledged to "reject efforts to divert funding from public education to pay for voucher programs," and she has never reversed Youngkin's election. As of October 5 her administration had not announced whether Virginia will file its list. She is the only sitting governor whose state is on the IRS list through a predecessor's election, which makes Virginia the clearest test of whether a state that opted in can still sit out the first year. What filing would involve. Youngkin's January 9 letter named eight scholarship organizations, but under the new rules the list goes to the IRS through a State §25F portal that has not opened yet, and it must include every qualifying organization located in Virginia that asks to be on it; a state [may not add requirements tougher than the federal law](https://eftccredit.com/news/one-national-standard-states-cannot-add-sgo-rules-25f-october-2026). Once the list is filed, Treasury reads the statute to allow no revocation for that year. Each year is a separate election, so 2028 would be a new decision either way. If Virginia does not file. Virginians can still claim the credit by giving to scholarship organizations in [other participating states](https://eftccredit.com/news/give-to-any-of-30-states-25f-scholarships-follow-student-residence-october-2026); those scholarships would go to students in those states. Virginia's own state program, the Education Improvement Scholarships Tax Credit, is separate and unaffected. Our June explainer on [how Virginia could leave](https://eftccredit.com/news/virginia-can-it-leave-25f-hb359-stalls-spanberger-renewal-june-2026) covers the stalled legislative route, HB 359, which is due back in the 2027 session. Organizations planning to serve Virginia students should prepare as if the list will be filed (the [SGO Builder](https://eftccredit.com/build) covers the federal steps) and follow the [Virginia page](https://eftccredit.com/states/virginia) for the decision; [Virginia's SGO page](https://eftccredit.com/sgos/virginia) shows which organizations say they will serve the state and will carry the official list once it is filed. Sources: - Virginia Education Association (Oct. 2, 2026): Following New Treasury Voucher Guidance, VEA Urges Governor Spanberger to Keep Virginia Out: https://www.veanea.org/following-new-treasury-voucher-guidance-vea-urges-governor-spanberger-to-keep-virginia-out/ - Federal Register, Oct. 2, 2026: Federal Scholarship Tax Credit, temporary regulations (T.D. 10057), 91 FR 62655, § 1.25F-5T(c)(3): https://www.federalregister.gov/documents/2026/10/02/2026-20264/federal-scholarship-tax-credit - EdNewsVA: Virginia is first state to formally opt in to Education Freedom Tax Credit: https://ednewsva.org/virginia-is-first-state-to-formally-opt-in-to-education-freedom-tax-credit/ Canonical: https://eftccredit.com/news/virginia-2027-hinges-on-sgo-list-vea-urges-spanberger-not-to-file-october-2026 ### Alaska approves its first 20 scholarship organizations and plans to send the IRS its 2027 list by December 1, before Dunleavy leaves office Date: 2026-10-02. Category: state-action. State: AK. In August, Alaska became the state that [put a date on its first SGO approvals](https://eftccredit.com/news/alaska-opens-sgo-applications-first-state-approvals-september-30-august-2026): September 30, 2026. It came in two days late and one day after Treasury released the §25F rules. On October 2, Gov. Mike Dunleavy approved the first 20 organizations. "The Education Freedom Tax Credit presents a tremendous opportunity for Alaska's children," he said. "I'm pleased to approve this first round of 20 organizations so that Alaskan students can benefit from scholarship opportunities as soon as possible." Who is on it. (We keep the full list, with each organization's page, at [Alaska's approved SGOs](https://eftccredit.com/sgos/alaska).) The state's announcement lists: AAA Scholarship Foundation, ACE Alliance for Choice in Education, AFC Scholarship Fund, Alaska Students First, American Catholic Education Fund, Christian Education Network, Federal Student Scholarship Organization Inc., Friends of Spruce Tree Montessori, Gifted & Talented Scholarships, Head of Federal Scholarship Tax Credit, Hometown Scholarships, Jewish Education Fund of America, Jewish Opportunity Fund, K-12 Scholarship Foundation Inc., Noble Arch Fund, Orthodox Christian Scholarship Fund (OCEN), Pay Your Tuition Foundation, Renew Scholarships Alaska, Scholarkids, and Student Athletic Scholarships. The state says each was verified as tax-exempt and met its application requirements, which since August have been two documents: a letter attesting to federal compliance and a 501(c)(3) determination letter. Education Commissioner Deena Bishop pitched it as a starting gun for schools and families: "Schools can identify needs. Families can learn about scholarships." Many of these are multistate organizations. Several names on the list are national groups raising for students in many states. Under Treasury's proposed rules, an organization that appears on more than one state's list is a multistate SGO: it must meet the [85% scholarship-activity test](https://eftccredit.com/news/85-percent-safe-harbor-how-sgos-meet-90-percent-rule-25f-october-2026), keep a separate §25F account for each state, and let donors say which state their gift is for. Every dollar in the Alaska account has to fund Alaska students; [scholarships follow the student's state](https://eftccredit.com/news/give-to-any-of-30-states-25f-scholarships-follow-student-residence-october-2026), not the donor's. What approval means now that the rules exist. Treasury's temporary regulations require a participating state to list every qualifying organization located in the state that asks, and to use an application process tailored to the federal requirements. Until an organization files its first report with the IRS, the state may rely on its governing documents and written policies, provided they expressly require the federal operational rules. Every approved organization still has to register in the IRS's SGO portal, which has not opened yet. Applications in Alaska remain open on a rolling basis, so this is a first round, not the final list. One caution: as of October 5 the state's own SGO page still shows the September 30 target and no list; the names above come from the governor's announcement as published by Alaska news outlets. The December 1 date is the interesting one. Alaska says it "expects to submit its final 2027 list of approved scholarship granting organizations to the IRS by December 1st." Under the temporary rules, submitting that list is what perfects Alaska's advance election for 2027, and Treasury reads the law to allow no revocation after that. Dunleavy is term-limited, and the governor elected on November 3 takes office on December 7. Filing by December 1 settles 2027 under the governor who opted Alaska in, the same sequence Colorado laid out the day before: [Polis plans to file Colorado's list before January 1](https://eftccredit.com/news/colorado-public-school-sgos-state-list-polis-weiser-marx-2027-october-2026), ahead of his own successor. The federal deadline is February 15, 2027 ([full calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026)). The state constitutional question NEA-Alaska raised in January, [the no-aid clause](https://eftccredit.com/news/alaska-nea-no-aid-clause-challenge-25f-opt-in-january-2026), remains unresolved. For organizations. If you want to serve Alaska students, the application is still a letter and a determination letter sent to SGO@alaska.gov, and the state is still taking them. The federal groundwork is the same everywhere; our free [SGO Builder](https://eftccredit.com/build) walks through it, [Alaska's approved list](https://eftccredit.com/sgos/alaska) shows who is already on it, [every state's official list](https://eftccredit.com/sgos/approved) tracks the other 29 participating states, and the [Alaska page](https://eftccredit.com/states/alaska) tracks the state. Sources: - Alaska Watchman (Oct. 2, 2026): 20 Alaska scholarship groups approved to boost homeschool, private and other school options (reproduces the governor's announcement): https://alaskawatchman.com/2026/10/02/20-alaska-scholarship-groups-approved-to-boost-homeschool-private-and-other-school-options/ - Your Alaska Link (Oct. 2, 2026): Alaska approves first 20 scholarship groups under federal tax credit program: https://www.youralaskalink.com/news/education/alaska-approves-first-20-scholarship-groups-under-federal-tax-credit-program/article_474e161c-7c86-40d4-a534-de0c737c90a6.html - Alaska Department of Education and Early Development: Scholarship Granting Organization applications: https://education.alaska.gov/sgo - Federal Register, Oct. 2, 2026: Federal Scholarship Tax Credit, temporary regulations (T.D. 10057), 91 FR 62655, § 1.25F-5T: https://www.federalregister.gov/documents/2026/10/02/2026-20264/federal-scholarship-tax-credit Canonical: https://eftccredit.com/news/alaska-approves-first-20-sgos-dunleavy-irs-list-december-1-october-2026 ### December 1: the deadline to tell Treasury what to change in the §25F rules Date: 2026-10-01. Category: regulatory. The §25F rules Treasury released on October 1 are open for comment. The proposed regulations (REG-117199-25) take written comments for 60 days after their October 2 publication in the Federal Register (91 FR 62818), which works out to December 1, 2026, and a public hearing is scheduled for December 15. Treasury and the IRS "request comments on all aspects of the proposed regulations," and the companion temporary regulations send readers to the same docket, so one comment reaches both. Our [plain-English read of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026) covers what they say; this is how to weigh in on what the final version should say. How to file. Commenters are "strongly encouraged" to file electronically through the Federal eRulemaking Portal at regulations.gov, indicating IRS and REG-117199-25. The docket is [IRS-2026-1354](https://www.regulations.gov/commenton/IRS-2026-1354-0001), which holds both the proposed and the temporary regulations. Paper comments go to CC:PA:01:PR (REG-117199-25), Room 5503, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, D.C. 20044. Two cautions before you hit submit: every comment is published on the public docket, and "once submitted to the Federal eRulemaking Portal, comments cannot be edited or withdrawn." A plain-language summary of the rule is also posted on the docket. Treasury did more than invite general feedback. It flagged specific questions in the preamble, and these are the places where the final rule is most likely to move. The 85% test. Treasury asked whether further guidance is needed on how an organization measures its scholarship-granting activities, "including whether the determination should be based on receipts, expenditures, staff time, program-service activity, or another administrable metric," and whether 85 percent is a reasonable threshold. That test decides whether an SGO can measure the 90% spending rule against its §25F account alone (our [90% rule guide](https://eftccredit.com/learn/sgo-90-10-rule-compliance) explains the mechanics). Digital wallets and expense checks. Comments are requested on the definition of a qualified digital wallet "and whether additional safe harbors for verification that scholarships are spent on qualified elementary or secondary education expenses should be included in the final regulations." Proof of income. Treasury asked about "other needs-based programs, such as State or Tribal programs," that should join SNAP, TANF, WIC, Section 8, and SSI on the list that lets an SGO skip detailed income documents (see our [income verification guide](https://eftccredit.com/learn/income-verification-for-sgos)). Charity law. It asked "how section 501(c)(3) requirements interact with section 25F and whether any clarifications are needed." State certifications. Both documents ask about the certifications a state makes for each SGO on its list, "including any other certifications that should be required for a multistate SGO," and "whether any certification is disproportionately burdensome compared to the benefits to tax administration." Small organizations. In its small-entity analysis, Treasury asked "whether there are less burdensome alternatives that adequately mitigate the risk of fraud or improper payment of scholarships under section 25F." The hearing. It is set for Tuesday, December 15, 2026, at 10 a.m. Eastern in the auditorium of the Internal Revenue Building, 1111 Constitution Avenue NW, Washington, with a telephone option. Each speaker gets 10 minutes and must submit an outline of topics, with the time for each, by the comment deadline. If no outlines arrive by then, "the public hearing will be cancelled," with a notice in the Federal Register. To testify, email publichearings@irs.gov with REG-117199-25 and "TESTIFY in Person" or "TESTIFY Telephonically" in the subject line. To attend without testifying, use "ATTEND In Person" or "ATTEND Hearing Telephonically"; those requests are due by 5 p.m. Eastern on Thursday, December 10. In-person visitors need photo ID, enter on Constitution Avenue, and are not admitted more than 30 minutes early. Treasury has heard from the field before. The proposed rules answer feedback on [Notice 2025-70](https://eftccredit.com/news/irs-notice-2025-70-section-25f-comments) and follow the [meetings logged during White House review](https://eftccredit.com/news/25f-rules-clear-oira-white-house-review-concluded-september-2026). This comment period is the formal step before final regulations: Treasury says that before the proposed rules are adopted as final, "consideration will be given to any comments" submitted on time. No date is set for them. None of this pauses the launch. The temporary regulations on state elections, SGO lists, IRS registration, and donor acknowledgments took no comment period and apply from September 1, 2026, and taxpayers, SGOs, and states may rely on the proposed rules for contributions made starting January 1, 2027. Read the full text in our [archive of the proposed regulations](https://eftccredit.com/documents/treasury-proposed-regulations), keep building with the free [SGO Builder](https://eftccredit.com/build), and see who is already operating in the [SGO directory](https://eftccredit.com/sgos). Sources: - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, notice of proposed rulemaking and public hearing, REG-117199-25, Doc. 2026-20277: https://www.federalregister.gov/public-inspection/2026-20277/federal-scholarship-tax-credit - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, temporary regulations, T.D. 10057, Doc. 2026-20264: https://www.federalregister.gov/public-inspection/2026-20264/federal-scholarship-tax-credit - Federal Register, Oct. 2, 2026: Federal Scholarship Tax Credit, proposed rule, 91 FR 62818 (comments close Dec. 1, 2026): https://www.federalregister.gov/documents/2026/10/02/2026-20277/federal-scholarship-tax-credit - Federal Register, Oct. 2, 2026: Federal Scholarship Tax Credit, temporary regulations, 91 FR 62655 (effective Dec. 1, 2026): https://www.federalregister.gov/documents/2026/10/02/2026-20264/federal-scholarship-tax-credit - Regulations.gov: comment on docket IRS-2026-1354 (REG-117199-25): https://www.regulations.gov/commenton/IRS-2026-1354-0001 Canonical: https://eftccredit.com/news/25f-rules-comments-due-december-1-hearing-december-15-october-2026 ### $500,000: the line that decides who audits your SGO under Treasury's §25F rules Date: 2026-10-01. Category: regulatory. Every SGO would get a yearly audit under the §25F rules Treasury and the IRS released on October 1, 2026, and one number decides who is allowed to perform it: $500,000. Proposed § 1.25F-4(e) says each organization that was an SGO during any part of the preceding taxable year "must undergo an annual financial and programmatic audit by a qualified independent third party and provide the audit results to each covered State on whose State SGO list the SGO appeared." Because the first state lists cover 2027, the first audits would look back at that year. These are proposed rules, but Treasury says SGOs may rely on them for 2027. [Our full breakdown of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026) covers the rest of the package. Above $500,000. An organization whose total receipts for its most recent taxable year were more than $500,000 "must hire an external, independent professional or accredited body that regularly assesses an organization's compliance, financial records, or processes (including internal controls) against specific standards." The receipts count is organization-wide, "whether or not required to be deposited into its section 25F segregated account," so money raised for other programs or for operations counts toward the line. At or below $500,000. A smaller organization "may use a committee of independent persons unrelated to the organization's management to conduct the audit," and the report "must be signed under penalties of perjury by the persons preparing such report." Treasury describes this as a way to provide flexibility and reduce expenses for small entities. What the audit has to cover. The proposed rule sets a minimum of seven items: how the SGO solicits applications and verifies each student's eligibility; how it selects recipients, including the priority for prior recipients and their siblings and the procedures that keep scholarships away from disqualified persons; how it sets award amounts; how it tracks payment, whether by direct payment, a qualified digital wallet, or reimbursement; verification that the money went to qualified education expenses; verification that the organization is located in the state; and verification that it met every operational requirement. The first six are audited at the level of the §25F segregated account, and the last follows whichever operational test the SGO uses, the organization-wide test or the account-level [90% rule safe harbor](https://eftccredit.com/learn/sgo-90-10-rule-compliance). The annual certification. Separately, proposed § 1.25F-4(d) would require every SGO to certify to the IRS each year that it was a 501(c)(3) public charity and not a private foundation, kept a segregated §25F account for each state that lists it and deposited every qualified contribution there, met the operational requirements, awarded nothing to a disqualified person, was located in each listing state, sent donors timely written acknowledgments, and commissioned the audit and gave the report to its states. Alongside it comes a set of numbers: applicants, scholarships awarded, the highest, lowest, and average award, the number of schools recipients attended, spending by expense category, income, and the share of prior-year and current-year income spent on scholarships. Treasury says this information would help states, the IRS, and "taxpayers considering making a qualified contribution" judge an organization's "compliance with the requirements of section 25F, its size, and its mission." Organizations that file a Form 990 would attach it; others would file it separately by the 15th day of the fifth month after the period ends, with a copy to each state. What it costs. Treasury estimates audit costs of $10,000 to $30,000 a year per SGO. It expects about 53% of SGOs to be above the $500,000 line, at roughly $30,000, and the other 47% to pay closer to $10,000, for a total of $12 million to $15 million a year across the program. Treasury also expects some organizations near the line to refer donors to another SGO for a year to stay under it, an amount it puts at $1.9 million to $2.2 million a year that it expects to reach other SGOs rather than be lost. The state side of this is in the [temporary regulations](https://eftccredit.com/documents/treasury-temporary-regulations-td-10057), which apply from September 1, 2026 and require a state, for each SGO on its list, to certify that it reviewed the organization's annual audit report, with a transition rule for new organizations that have no operating year to report yet. The full proposed text is in our [archive of the proposed regulations](https://eftccredit.com/documents/treasury-proposed-regulations), and comments are due December 1, 2026. For an organization planning its first year, the practical move is to budget for the audit now and keep records it can be audited against from the first gift: the segregated account, the donor acknowledgment log, and a file on every award. Our [SGO compliance calendar](https://eftccredit.com/learn/sgo-compliance-calendar) lays out the yearly deadlines, the free [SGO Builder](https://eftccredit.com/build) walks through setting up those systems, and the [SGO directory](https://eftccredit.com/sgos) shows who is already operating. Sources: - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, notice of proposed rulemaking and public hearing, REG-117199-25, Doc. 2026-20277 (proposed §§ 1.25F-4(d) and (e)): https://www.federalregister.gov/public-inspection/2026-20277/federal-scholarship-tax-credit - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, temporary regulations, T.D. 10057, Doc. 2026-20264 (§ 1.25F-5T(d)(3)): https://www.federalregister.gov/public-inspection/2026-20264/federal-scholarship-tax-credit - U.S. Department of the Treasury: Treasury and IRS Issue Proposed Regulations to Implement the Education Freedom Tax Credit (Oct. 1, 2026): https://home.treasury.gov/news/press-releases/sb0641 Canonical: https://eftccredit.com/news/sgo-annual-audit-500000-threshold-25f-certification-october-2026 ### $5,000 and 2%: who Treasury's §25F rules bar from receiving an SGO scholarship Date: 2026-10-01. Category: regulatory. The §25F statute bars an SGO from awarding a scholarship to any "disqualified person," to be determined under "rules similar to the rules of section 4946," the self-dealing provision for private foundations. The proposed regulations Treasury and the IRS released on October 1, 2026 turn that cross-reference into a working list ([our full breakdown of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026) covers the rest). For anyone building an SGO, it settles who on the board, the selection committee, and the donor list has to stay out of the applicant pool, and for how long. The rule is proposed, and SGOs may rely on it for 2027. The four groups. Proposed § 1.25F-3(d) names them: substantial contributors to the SGO or to its §25F segregated account; officers, directors, and trustees, plus anyone with similar powers; "any individual participating in, including as a member of a committee, the selection of scholarship recipients or the determination of scholarship awards"; and the family members of anyone in the first three groups. Family means a spouse, the ancestors and descendants of the person or the spouse, the siblings of either, the siblings' descendants, and the spouses of all of those. Adopted children and stepchildren count as descendants. The $5,000 and 2% test. A substantial contributor is anyone who gave more than $5,000 during the SGO's taxable year, if that amount is also more than 2% of the total contributions the SGO received that year. The proposed rule runs the test twice, once against the SGO's total contributions and once against its §25F segregated account alone, and meeting either one makes the donor a substantial contributor. Treasury chose a year-by-year test rather than a running total since the SGO's founding, and it kept the $5,000 floor after commenters responding to [Notice 2025-70](https://eftccredit.com/news/irs-notice-2025-70-section-25f-comments) warned that a 2%-only rule would fall hardest on small and start-up SGOs. Spouses count as one giver: an individual "will be treated as making all contributions made by his or her spouse." Status is fixed as of the close of the SGO's year and lasts for that year and the next. Treasury's own examples show how the percentage cuts. A donor who gives $6,000 to an SGO that takes in $450,000 that year is at 1.33% and is not a substantial contributor. The same $6,000 given to an SGO that takes in $280,000 is 2.14%, so that donor is a substantial contributor for that year and the following one, and scholarships to the donor's family in either year would be awards to disqualified persons. The size of the SGO matters as much as the size of the gift. No exception for blind selection, or for volunteers. Commenters asked Treasury to let relatives of board members receive scholarships when an SGO uses blind or anonymized selection. Treasury declined, saying the self-dealing rules prefer "categorical prohibitions" to case-by-case inquiries, and pointing out that §25F's required priority for returning students and their siblings makes truly blind selection impossible. It also refused to exempt unpaid committee members with no financial stake: "The relevant concern is not whether an individual has a financial interest in or compensation from the SGO, but whether such individual has the ability to confer a financial benefit on themselves or a family member by influencing scholarship awards." Officers, directors, and committee members who step down stay disqualified through the end of that year and the following year. A safety valve for late gifts. Because status is fixed at year end, a donor's later gift could reach back and taint an award made months earlier. The proposed rule protects that award if, on the award date, the recipient would not have been disqualified based on contributions received so far, and the SGO "did not know and did not reasonably expect" the recipient would become one. In Treasury's example, a donor gives $7,000 in February, the donor's daughter receives a scholarship in August, and a second $7,000 gift in November brings the donor to 2.15% of the year's contributions. The August award stands, but the donor is a substantial contributor for that year and the next, and the family's awards in the following year are treated as awards to a disqualified person. Two more details. A multistate SGO applies the test organization-wide and again for each state's §25F account, and disqualification at the account level applies only to that account. And the rule does not bar board members or major donors from having financial ties to the schools recipients attend; Treasury left those conflicts to existing scrutiny under section 501(c)(3) and section 4958. Treasury estimates the rules will reach 70,000 to 80,000 disqualified persons a year. The text is in our [archive of the proposed regulations](https://eftccredit.com/documents/treasury-proposed-regulations), and the related spending rules are in our [90% rule guide](https://eftccredit.com/learn/sgo-90-10-rule-compliance). What to do now. Write the four groups into your award policy, keep a current list of board members, officers, and everyone who reviews applications, and track each donor's giving through the year against both your total contributions and your §25F account so you can see the 2% line before an award goes out. Be direct about the trade-off when you [recruit major donors](https://eftccredit.com/learn/recruiting-donors-for-your-sgo): a family whose gifts cross the line makes its own relatives ineligible for that year and the next. Our free [SGO Builder](https://eftccredit.com/build) covers the governance documents, and the [SGO directory](https://eftccredit.com/sgos) shows who is already operating. Sources: - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, notice of proposed rulemaking, REG-117199-25, Doc. 2026-20277, proposed § 1.25F-3(d): https://www.federalregister.gov/public-inspection/2026-20277/federal-scholarship-tax-credit - 26 U.S.C. §25F (federal Education Freedom Tax Credit): https://www.law.cornell.edu/uscode/text/26/25F - 26 U.S.C. §4946, definitions and special rules (disqualified persons): https://www.law.cornell.edu/uscode/text/26/4946 Canonical: https://eftccredit.com/news/5000-and-2-percent-25f-disqualified-persons-scholarship-rules-october-2026 ### 4 ways to pay: how Treasury's §25F rules say scholarship money has to move Date: 2026-10-01. Category: regulatory. Awarding a scholarship is half the job. The other half is paying for it, and Treasury's [§25F rules released October 1, 2026](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026) are specific about how. Under proposed § 1.25F-3(c)(5), an SGO must verify that scholarship money is spent only on qualified elementary or secondary education expenses, and it does that by paying through one of four allowed routes. The rule is proposed, but Treasury says SGOs may rely on it for contributions made starting January 1, 2027, so this is the payment system to build for launch. The rules start with fraud prevention. Commenters told Treasury the biggest problems in existing state scholarship programs were duplicate awards, where two scholarships pay for the same expense and together exceed its cost, and spending on expenses that are unqualified or only loosely tied to a student's education. So every SGO must "implement reasonable procedures for the prevention and detection of fraud and abuse, including systems to prevent and detect the duplication of scholarship awards to the same student for the same qualified elementary or secondary education expense that collectively exceed the cost of the expense." 1. School charges go straight to the school. Tuition, fees, room and board, and similar expenses "charged by the school must be paid directly to the school." The school, in turn, "must return any payments from the SGO that are in excess of the student's costs or that are disbursed by the SGO in error." 2. Other vendors can be paid directly, such as a tutoring provider or an equipment seller, if the vendor has been verified as an appropriate provider, is not related, directly or indirectly, to the scholarship recipient, and is required to pay back any excess or mistaken payments. 3. Families can be reimbursed, with receipts. The rule's heading is blunt: "No funds may be paid directly to the family of the eligible student unless it is a qualified reimbursement." A qualified reimbursement needs a receipt showing both that the family paid and that the expense qualifies, and before paying, the SGO has to run its check that no other source has already covered the same expense. 4. A qualified digital wallet also satisfies the rule. Treasury defines it as "an electronic payment platform in which a third-party provider provides a streamlined interface for managing the administration of section 25F scholarships," where families submit purchase requests, approved expenses are tracked, and controls keep every payment on qualified expenses "by pre-approving vendors and paying vendors directly or requiring timely submission of receipts." Treasury asked for comments on that definition and on whether the final rules should add more safe harbors for verifying spending. The wallet route has a second benefit. For the 90% spending test, money an SGO transfers to a third party for disbursement through a qualified digital wallet counts as spent on the date of transfer, as long as the SGO does not keep ownership of the funds. Payments by other routes count when they are paid. Our [90% rule guide](https://eftccredit.com/learn/sgo-90-10-rule-compliance) covers how that timing works. Two limits sit on top of the payment routes. First, an SGO is a 501(c)(3) public charity, so scholarships have to serve its charitable purpose, and Treasury says an SGO "must award scholarships only for those expenses that are reasonably necessary to further the organization's charitable exempt purposes." It points to Rev. Rul. 69-175, which denied exemption to a parents' group that ran school buses for its own members' children, as an example of private benefit. Second, the exact list of qualified expenses is still coming: Treasury calls separate section 530 guidance "a high priority." Its announcement names private-school tuition, academic tutoring, special-needs services, books, supplies, computers, and other equipment among the expenses scholarships can support. Until that guidance arrives, the statutory text in our [section 530 archive](https://eftccredit.com/documents/section-530-b3-coverdell-expenses) and our [qualified expenses guide](https://eftccredit.com/learn/qualified-expenses-25f) are the reference. The payment routes will also be checked every year. The proposed annual audit must cover "the method(s) the organization uses to track how scholarship money for qualified elementary and secondary education expenses is paid (whether by direct payment, through a qualified digital wallet, or by reimbursement)." For an SGO setting up now, that means deciding the routes before the first award: a school-payment process with a written return-of-excess term, a vendor verification and relationship check, a receipt standard for reimbursements, a duplicate-award ledger, or a digital wallet provider that does this work. Our guide to [disbursing funds to schools](https://eftccredit.com/learn/disbursing-funds-to-schools) walks through the school side, the full rule text is in our [proposed regulations archive](https://eftccredit.com/documents/treasury-proposed-regulations), and the free [SGO Builder](https://eftccredit.com/build) covers formation step by step. See who is already operating in the [SGO directory](https://eftccredit.com/sgos). Sources: - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, notice of proposed rulemaking, REG-117199-25, Doc. 2026-20277 (prop. §§ 1.25F-1(a)(13), 1.25F-3(c)(5), 1.25F-4(e)(3)): https://www.federalregister.gov/public-inspection/2026-20277/federal-scholarship-tax-credit - U.S. Department of the Treasury: Treasury and IRS Issue Proposed Regulations to Implement the Education Freedom Tax Credit (press release sb0641, Oct. 1, 2026): https://home.treasury.gov/news/press-releases/sb0641 - 26 U.S.C. §530(b)(3)(A), qualified elementary and secondary education expenses: https://www.law.cornell.edu/uscode/text/26/530 Canonical: https://eftccredit.com/news/four-ways-to-pay-25f-scholarship-money-schools-vendors-digital-wallets-october-2026 ### Two years to hit 90%: how the §25F rules time an SGO's scholarship spending Date: 2026-10-01. Category: regulatory. The §25F statute requires a scholarship granting organization to spend at least 90% of its income on scholarships, but it never says by when. Treasury's proposed regulations, released October 1, 2026 as part of the [full §25F rules package](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026), supply the deadline. An SGO "must meet the 90 percent of income spending requirement as of the last day of the taxable year following the taxable year in which such income is received." The rule spells out what that means for a new organization: the requirement "for the SGO's first year of operation does not need to be met until the end of its second year of operation." That answer came out of the comment record. Stakeholders told Treasury that a same-year test would squeeze SGOs in their startup phase, when many administrative costs are fixed, and pointed out that many SGOs run on a fiscal year while state SGO lists run on the calendar year. Some asked for a rolling average or a phase-in; others argued against any smoothing at all. Treasury chose a single carry window of one extra year. It runs on the SGO's own taxable year, including a short first year, so an organization on a fiscal year measures against its fiscal year. Money that arrives late in a year does not have to go out the door before that year ends. What counts as spent. Amounts are treated as spent when they are paid, under the cash method of accounting. A scholarship promised for future years counts only in the year each payment actually goes out, which Treasury ties to the statute's annual checks: household income and in-state residence are tested as of the time a scholarship is paid. Treasury's explanation adds one accommodation for [how scholarship money moves](https://eftccredit.com/learn/disbursing-funds-to-schools): if an SGO transfers funds to a third party for disbursement through a qualified digital wallet and does not keep ownership of them, the funds count as spent on the date of the transfer. Which dollars go first. The proposed rule uses a first-in, first-out ordering: payments come from contributions and other income received in the earliest year first, then later years in order. If a school or vendor sends money back because it exceeded the student's costs or went out in error, the refund is treated as new income in the year it comes back, and the SGO has until the end of the following year to spend it again. And no dollar can count toward the 90% in more than one year. The clock applies to whatever base the 90% is measured against, and that base depends on how the SGO is set up. For most organizations it is total gross receipts from every source. For a single-state SGO whose activities are at least 85% scholarship granting, and for each state account of a multistate SGO, it is the qualified contributions received by, and earnings credited to, the §25F segregated account. Our [90/10 rule guide](https://eftccredit.com/learn/sgo-90-10-rule-compliance) walks through the 85% test that decides which base applies. The timing rule also shapes the annual reporting. Under the proposed rule, each SGO would report the total it spent on scholarships for in-state students during the year, how much of that counted toward the prior year's 90% and how much toward the current year's, and the percentage of each year's income spent so far. In practice that means tracking §25F receipts by year from the first donation and tagging each payment to the year it satisfies. The [SGO compliance calendar](https://eftccredit.com/learn/sgo-compliance-calendar) lays out where those reports fall. These are proposed rules. Treasury says SGOs, donors, and states may rely on them for qualified contributions made on or after January 1, 2027, and comments are due December 1, 2026; the full text is in our [archive of the proposed regulations](https://eftccredit.com/documents/treasury-proposed-regulations). If you are forming an SGO now, build the year-by-year spending ledger in from the start: the free [SGO Builder](https://eftccredit.com/build) covers formation step by step, and the [SGO directory](https://eftccredit.com/sgos) shows who is already operating. Sources: - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, notice of proposed rulemaking, REG-117199-25, proposed § 1.25F-3(c)(4)(iii), Doc. 2026-20277: https://www.federalregister.gov/public-inspection/2026-20277/federal-scholarship-tax-credit - 26 U.S.C. §25F(d)(1)(B) (90 percent of income spending requirement): https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/sgo-90-percent-two-year-spending-window-25f-rules-october-2026 ### Form 8525: how donors will claim §25F with a donor number, not a Social Security number Date: 2026-10-01. Category: regulatory. How do you prove a $1,700 credit without handing a charity your Social Security number? The §25F rules Treasury and the IRS [released on October 1, 2026](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026) answer with a number of their own. Every SGO will issue each donor a unique donor number, and donors will claim the credit on a new IRS form, Form 8525, Federal Scholarship Tax Credit, by listing the number from each SGO they gave to. Why not a Social Security number. Many commenters objected to SGOs collecting taxpayer identification numbers, and Treasury agreed. The preamble says requiring donors to hand over their TINs "would be burdensome, could chill an individual's desire to make contributions to an SGO, and might result in unnecessary exposure of sensitive taxpayer information." The IRS still needs to match what SGOs report against what donors claim, so the donor number does that job. Because each SGO generates its own numbers, a donor who gives to two SGOs gets two different numbers. Step one is the SGO's, and it starts now. The temporary regulations, which apply from September 1, 2026, require every organization to register in a new IRS SGO portal with its name, EIN, address, phone number, year of formation, a contact person, and its taxable year. Registration is how the SGO receives the IRS's instructions for creating donor numbers "in a uniform format to be used by all SGOs," and it is also where the SGO authorizes the IRS to publish its name on the IRS SGO list. Treasury asks organizations to register "as soon as possible and preferably before the organization appears on any State SGO list," since an SGO that has not registered cannot issue the numbers its donors need. Two deadlines after each year of giving. By January 31, the SGO sends each donor a written acknowledgment showing the SGO's EIN, the donor's total designated contributions for the year, the donor's unique number, and a statement of whether the SGO gave anything in return, with a good faith estimate of its value. It can go by email if the donor consents. By February 28, the SGO reports to the IRS, through the portal, each donor number with the donor's name, address, and total. For gifts made in 2027, those dates fall in early 2028. Both requirements are in the temporary regulations, which apply from September 1, 2026, so they do not wait for final rules. Our [donor number explainer](https://eftccredit.com/learn/25f-donor-number) walks through the mechanics. Then the donor files. Under the proposed rule, a donor substantiates the credit on Form 8525 (or a successor form) and lists the unique donor number for each SGO. Leave a number off and the IRS presumes there was no qualified contribution to that SGO. The presumption can be rebutted with the SGO's acknowledgment showing the number, or other evidence of the amount and the fact that it was designated, within the time the IRS allows in a written request. The form itself has not been released yet; we track it on our [Form 8525 document page](https://eftccredit.com/documents/irs-form-25f). What counts as a qualifying gift. The donor has to designate the gift as a §25F contribution when making it, and under the temporary regulations that designation, once made, is irrevocable. The gift has to be cash, which the rules define as "physical currency, check, money order, electronic transfer, after-tax payroll deduction, or other similar method, in each case all in U.S. dollars," and which "does not mean any digital asset." Card payments count as electronic transfers. If the SGO gives anything back, its value comes off the qualified amount. And the gift has to come from the individual: under the proposed rule, a partner's or S corporation shareholder's share of a gift made by the business does not count toward that person's credit. How a donor knows the SGO is real. The IRS will publish an IRS SGO list, and under the proposed rule a donor "may rely on the fact that an organization is listed on the IRS SGO list (and not listed as removed from that list) at the time a contribution is made." Removed organizations stay on the list in strike-through text with the removal date. Reliance is lost only if the donor knew the organization did not qualify, or was responsible for or aware of what got it removed. One catch for SGOs: an organization that does not authorize the IRS to publish its information leaves its donors without that reliance. More on the list is in our [federal SGO list guide](https://eftccredit.com/learn/federal-sgo-list). The proposed pieces are not final, but Treasury says donors, SGOs, and states may rely on them for contributions made on or after January 1, 2027. The full text is in our archives of the [temporary regulations](https://eftccredit.com/documents/treasury-temporary-regulations-td-10057) and the [proposed regulations](https://eftccredit.com/documents/treasury-proposed-regulations). If you are setting up an SGO, portal registration, a segregated §25F account, and a January acknowledgment run belong on your launch checklist; the [free SGO Builder](https://eftccredit.com/build) covers formation, and the [SGO directory](https://eftccredit.com/sgos) shows who is already operating. Sources: - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, temporary regulations, T.D. 10057, Doc. 2026-20264: https://www.federalregister.gov/public-inspection/2026-20264/federal-scholarship-tax-credit - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, notice of proposed rulemaking, REG-117199-25, Doc. 2026-20277: https://www.federalregister.gov/public-inspection/2026-20277/federal-scholarship-tax-credit - U.S. Department of the Treasury: Treasury and IRS Issue Proposed Regulations to Implement the Education Freedom Tax Credit (Oct. 1, 2026): https://home.treasury.gov/news/press-releases/sb0641 Canonical: https://eftccredit.com/news/form-8525-25f-donor-number-no-social-security-number-october-2026 ### 30 states, any donor: under Treasury's §25F rules you can give across state lines, and scholarships follow where students live Date: 2026-10-01. Category: regulatory. Where a donor lives does not matter under the federal Education Freedom Tax Credit. Where a student lives does. Treasury's proposed regulations, [released October 1, 2026](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026), settle both halves of that. On the giving side, the preamble says a taxpayer "may contribute to any SGO without regard to the taxpayer's residence." Treasury counts 30 states that had elected to participate as of August 2026, and every SGO those states list is open to a donor anywhere in the country. Treasury's own illustration is short: "a taxpayer residing in State X may contribute to an SGO in State Y so long as the SGO is on State Y's SGO list." The donor can rely on the organization's presence on the IRS SGO list at the time of the gift, "regardless of which covered States included the organization on their respective State SGO lists." The regulation text is explicit: "A taxpayer may make a qualified contribution to any SGO on any State SGO list, regardless of the taxpayer's State of residence." So a donor is never limited to SGOs in their own state, and a donor who lives in a state that has not opted in can still give to an SGO in one that has and claim the credit. When an SGO is listed in more than one state, the donor chooses which state's §25F account the gift goes into, and the SGO must deposit it that way. The student side turned on four words in the statute. A qualified contribution must fund scholarships for eligible students "solely within the State" where the SGO is listed, and commenters read that two ways: as a limit on where students live, or as a limit on where the scholarship is spent. Treasury chose residence. The proposed rule says a student is solely within a state "only if the eligible student resides in that State in accordance with State law," and adds: "Attending school in a State or purchasing goods or services in a State is not sufficient to treat the student as being solely within a State." Treasury's two examples show how that works. Organization EF is listed only in State X. Student A lives in State X and attends school in State Y; Student B lives and attends school in State Y. EF can award a scholarship to Student A but not to Student B. Organization GH is listed in both State X and State Y. It can fund Student A from its State X account and Student B from its State Y account, but it cannot fund Student C, who lives in State Z and attends school in State Y. The economic analysis and one of its footnotes spell out the border cases. A student who lives in a participating state but attends school in a state that has not opted in can still receive a scholarship. A student who lives in a non-participating state cannot receive one from an SGO in either state, even if the school is in a participating state. Treasury says it has no data on how many students fit that pattern and expects the residence rule to shift which students receive scholarships rather than reduce the total. It is one more way a state's own decision reaches its families, a point we cover in [what happens when a state stays out](https://eftccredit.com/learn/state-opt-out-money-leaves). There are two exceptions. A student who is a dependent of a member of the Armed Forces is treated as solely within both the state of the student's domicile and the state where the service member resides. Treasury cites about 821,500 school-age children in military families and estimates the exception will benefit as many as 33,600 students a year, which it calls an upper bound. A student who is a dependent of someone residing on Indian Lands is treated as within both the state of residence and the state where the student attends school; Treasury puts that group at as many as 6,200 students a year, based on Bureau of Indian Education boarding schools and dormitories. Treasury weighed the alternatives. Some commenters wanted school location to control, and another wanted funds to follow the student wherever they enroll, as West Virginia's Hope Scholarship and Indiana's voucher program do. The residence reading matches the split we described in August, when we explained that [donors can be anywhere while scholarships stay in-state](https://eftccredit.com/news/25f-state-lines-donors-anywhere-scholarships-in-state-august-2026). These are proposed rules. Treasury says taxpayers, SGOs, and states may rely on them for contributions made on or after January 1, 2027, and comments are open through December 1. The full text is in our [archive of the proposed regulations](https://eftccredit.com/documents/treasury-proposed-regulations). For SGOs, the practical read is a national donor pool and a residence check on every applicant, determined under state law. Families can see whether their state is in on the [states page](https://eftccredit.com/states). Organizations getting ready for January can work through formation with the free [SGO Builder](https://eftccredit.com/build) and see who is already operating in the [SGO directory](https://eftccredit.com/sgos). Sources: - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, notice of proposed rulemaking, REG-117199-25, Doc. 2026-20277: https://www.federalregister.gov/public-inspection/2026-20277/federal-scholarship-tax-credit - U.S. Department of the Treasury: Treasury and IRS Issue Proposed Regulations to Implement the Education Freedom Tax Credit (press release sb0641, Oct. 1, 2026): https://home.treasury.gov/news/press-releases/sb0641 - 26 U.S.C. §25F (federal Education Freedom Tax Credit): https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/give-to-any-of-30-states-25f-scholarships-follow-student-residence-october-2026 ### 1 national standard: under Treasury's §25F rules, states cannot add their own conditions for SGOs Date: 2026-10-01. Category: regulatory. The Education Freedom Tax Credit will run on one set of rules in every participating state. The temporary regulations Treasury and the IRS released on October 1, 2026 say that a state "may not require SGOs to operate in a manner that is more restrictive than the requirements set forth in section 25F(c)(5), such as by limiting the type of school that scholarship recipients may attend or the types of qualified elementary or secondary education expenses for which scholarship funds may be used." The provision, § 1.25F-5T(e)(2), is titled "Prohibition on additional State requirements or discretionary exclusions," and because it sits in the [temporary regulations](https://eftccredit.com/documents/treasury-temporary-regulations-td-10057), not only in the proposed rule, it applies from September 1, 2026 and governs the 2027 SGO lists states are building now. Our [full breakdown of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026) covers the rest of the package. What "located in" means. §25F asks each participating state to list the qualifying SGOs "located in" it. The temporary rules define that term: an organization is located in a state "if the organization is authorized to do business in the State and is in compliance with the generally applicable State laws and requirements for charitable organizations in the State, including provisions for transparency, accountability, and fraud prevention." No headquarters or in-state staff is required. Treasury considered the opposite view, that "located in" should mean a physical presence, and chose the registration standard as "consistent with the legislative purpose of section 25F to increase access to scholarship funds." An established SGO can therefore register in several participating states and appear on each of their lists. What states still do. The rule does not take states out of the job. Under § 1.25F-5T(e)(1), a participating state must require SGOs to meet its generally applicable charity laws, including whatever it takes to do business and solicit donations there, and must impose "application, documentation, and financial reporting requirements" reasonably tailored to support the state's certifications and to "facilitate the prevention and detection of fraud or abuse," including duplicate awards to the same student for the same expense. The limit is on purpose, not on rigor: those requirements "must be reasonably related to determining whether an organization is located in the State, meets the requirements of section 25F(c)(5) and the operational requirements in section 25F(d), and satisfies the generally applicable State requirements for charitable organizations." Every qualifying SGO gets listed. When a state makes its election, it must certify that its list "includes every organization located in the State" that qualifies and is seeking inclusion. A state can remove an SGO during the year only after determining, "through a procedure providing due process to the organization," that it no longer qualifies, and it must certify that its procedures before and after a removal "are fairly administered and afford due process." The IRS keeps a check on the states too: under § 1.25F-5T(e)(3), state procedures "are subject to Federal review," and on finding "a pattern of irregularities or noncompliance" the IRS may require a state to change them. Treasury's announcement put the point plainly: the rules "would not permit a State to use discretionary certification standards to exclude otherwise qualifying SGOs." For families, a uniform rule means a scholarship works the same way in every participating state: it can pay for any qualified expense at any school that counts under state law, and the list of SGOs a family can turn to is not narrowed by state policy. For SGOs, it means an organization built to the federal requirements can qualify wherever it is registered, without rebuilding its program for each state. And SGOs keep their own missions. Treasury's explanation says an SGO "may narrow its own focus and adopt more stringent requirements," such as limiting scholarships to subjects like science or foreign languages, or to students from households below 80 percent of area median income. The limit applies to what a state may require, not to what an organization chooses. The question has been open since Treasury previewed the rules in June, when we asked whether §25F would be a [federal floor or a federal ceiling](https://eftccredit.com/news/federal-floor-or-ceiling-25f-state-restrictions-june-2026). The temporary rule answers it as a ceiling. That has consequences for the few states that had planned around the other answer. [Vermont's Act 164](https://eftccredit.com/news/vermont-h933-restrict-25f-opt-in-june-2026) directs its governor to decline participation if federal rules override the state's conditions; Oregon Gov. Tina Kotek [cited this limit when she declined in June](https://eftccredit.com/news/oregon-kotek-declines-25f-treasury-state-rule-limits-june-2026); and Rhode Island Gov. Dan McKee [said he might support participation](https://eftccredit.com/news/rhode-island-mckee-signs-both-branches-gate-25f-june-2026) if the program were limited to uses such as tutoring and technology. Treasury counts 30 states that had elected to participate as of August 2026. The regulation also leaves states' other obligations in place. Treasury's explanation notes that nothing in §25F or the temporary rules alters a state's duty to follow other federal and state law, naming the Individuals with Disabilities Education Act as an example. The same text appears in the proposed rule, which is open for comment until December 1, 2026; the proposed version is archived on our [proposed regulations page](https://eftccredit.com/documents/treasury-proposed-regulations). If you are forming an SGO, register in each state where you plan to raise and award money, meet that state's charity filing rules, and apply to its list ahead of the February 15, 2027 deadline for 2027 lists. Our [free SGO Builder](https://eftccredit.com/build) walks through formation, the [federal SGO list explainer](https://eftccredit.com/learn/federal-sgo-list) covers how listing works, and the [states page](https://eftccredit.com/states) shows where each state stands. Sources: - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, temporary regulations, T.D. 10057, §§ 1.25F-1T(a)(10), 1.25F-5T(c)(5), (d)(6)-(7), (e): https://www.federalregister.gov/public-inspection/2026-20264/federal-scholarship-tax-credit - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, notice of proposed rulemaking, REG-117199-25, proposed § 1.25F-5(e): https://www.federalregister.gov/public-inspection/2026-20277/federal-scholarship-tax-credit - U.S. Department of the Treasury: Treasury and IRS Issue Proposed Regulations to Implement the Education Freedom Tax Credit (press release sb0641, Oct. 1, 2026): https://home.treasury.gov/news/press-releases/sb0641 - 26 U.S.C. §25F (federal Education Freedom Tax Credit): https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/one-national-standard-states-cannot-add-sgo-rules-25f-october-2026 ### $26 billion a year: Treasury's forecast for §25F scholarships by 2030 Date: 2026-10-01. Category: analysis. The rules Treasury and the IRS released on October 1 come with a forecast. In the economic analysis attached to the [proposed regulations](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026), the agencies estimate that by 2030 "more than 11 million taxpayers will make qualified contributions totaling $26 billion" a year to scholarship granting organizations. Treasury's announcement put the headline as "nearly $26 billion in qualified contributions annually" funding "as many as 2.2 million scholarships each year." These are agency projections, not results. The credit opens January 1, 2027, and nothing has been given under it yet. The full set of numbers. The analysis starts from the roster: "As of August 2026, 30 States have elected to participate." In those states Treasury and the IRS project 600 to 700 SGOs by 2030, more than 11 million donors, and $26 billion a year in qualified contributions. The analysis translates that into either 2 million full-time scholarships at $12,000 each or 5 million part-time scholarships at $4,500. The press release's "as many as 2.2 million" sits a little above the analysis's 2 million; $26 billion divided by $12,000 comes to about 2.2 million. How Treasury built the forecast. The footnotes show the assumptions. The donor and dollar figures are "produced using a 10% take-up rate," based on the 2023 Panel Study of Income Dynamics and research finding that people give more when they get to direct where their tax dollars go. The $12,000 is "a rounded average of the cost to attend one year of private elementary or secondary school in the states which have opted in." And the 600 to 700 SGOs come from the average number of SGOs operating in states that already run tax-credit scholarship programs, applied to each state that opts in. That last assumption makes the SGO count a per-state number: it describes the 30 states that had elected as of August 2026, at roughly 20 to 23 organizations per state. Why the forecast is in the rule at all. The White House Office of Information and Regulatory Affairs designated the proposed rules "economically significant," which requires a full cost-benefit analysis. Treasury's case for the benefits rests on outcomes: "Research shows that educational choice can lead to increases in college enrollment and test scores, particularly for students from economically disadvantaged backgrounds." Because each additional year of schooling returns roughly 10% in earnings, the analysis says scholarship recipients "are expected to experience a significant increase in lifetime earnings." A conservative take-up assumption. Treasury's 11 million donors rest on 10% participation. The American Federation for Children counted [121.5 million federal filers with enough tax liability to claim the credit](https://eftccredit.com/news/afc-121-5-million-taxpayers-eligible-donate-25f-september-2026), so the forecast assumes most eligible taxpayers never use it. That makes take-up the number to watch, a point AEI's Rick Hess made in July when he argued that [the biggest risk to the credit is whether people claim it](https://eftccredit.com/news/biggest-25f-risk-isnt-politics-its-uptake-july-2026). Every point of participation above Treasury's assumption means more scholarships than the forecast shows, and the same rules that produced it also make the credit easier to use: married couples can claim up to $3,400, and donors can give to an SGO in any participating state. The roster can still grow. The forecast covers the 30 states on the [IRS list](https://eftccredit.com/news/irs-roster-30-states-kentucky-added-official-count-july-2026). States still deciding have until January 1, 2027 to file an advance election for the first year, and each added state brings its own students and, under Treasury's method, its own share of SGOs. Where every state stands is on the [states page](https://eftccredit.com/states). For anyone building an SGO, the forecast is a sizing exercise: 600 to 700 organizations sharing $26 billion a year, with a donor pool that is national because donors can give across state lines. The full estimates and their footnotes are in the [proposed regulations archive](https://eftccredit.com/documents/treasury-proposed-regulations), and our [plain-English read of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026) covers what changed. If you are forming an organization, the free [SGO Builder](https://eftccredit.com/build) walks through each step, and the [SGO directory](https://eftccredit.com/sgos) shows who is already operating. Sources: - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, notice of proposed rulemaking, REG-117199-25, Doc. 2026-20277, Special Analyses (estimates, footnotes 4-8): https://www.federalregister.gov/public-inspection/2026-20277/federal-scholarship-tax-credit - U.S. Department of the Treasury: Treasury and IRS Issue Proposed Regulations to Implement the Education Freedom Tax Credit (press release sb0641, Oct. 1, 2026): https://home.treasury.gov/news/press-releases/sb0641 - American Federation for Children: New Report Estimates 121.5 Million Taxpayers Are Eligible to Claim the Education Freedom Tax Credit in 2027 (Sept. 9, 2026): https://www.federationforchildren.org/new-report-estimates-121-5-million-taxpayers-are-eligible-to-claim-the-education-freedom-tax-credit-in-2027/ Canonical: https://eftccredit.com/news/treasury-projects-26-billion-25f-scholarships-by-2030-october-2026 ### Feb 15, 2027: the deadline for every state's §25F SGO list, and why a new SGO should be formed by January 1 Date: 2026-10-01. Category: regulatory. The §25F rules Treasury released on October 1 put real dates on the first year of the Education Freedom Tax Credit. For 2027, a participating state has two deadlines: it files its advance election on Form 15714 "on or before January 1, 2027," and it completes that election by sending the IRS its list of scholarship granting organizations "on or before February 15, 2027." Both dates sit in the [temporary regulations (T.D. 10057)](https://eftccredit.com/documents/treasury-temporary-regulations-td-10057), which take effect without a comment period and apply from September 1, 2026, so they govern the 2027 launch. Our [full breakdown of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026) covers the rest of the package. For states, the order matters. Treasury counts 30 states that had elected as of August 2026. A state that has not filed yet still can, but for its first year the rules say it "cannot make its election with the submission of the State SGO list"; the [Form 15714 advance election](https://eftccredit.com/news/irs-form-15714-advance-election-december-2025) has to come first, by January 1. The list then completes the election. A state that files the election and never sends the list is out for the year, because without a list no organization in the state can qualify as an SGO. The procedure builds on [Rev. Proc. 2026-6](https://eftccredit.com/documents/rev-proc-2026-6), which opened the advance election last December. The filing itself runs through a new IRS State section 25F portal. A governor, or whoever state law designates to make elections on federal tax benefits, may authorize up to two designated officials to use it, and each must be an elected official, the Director of Taxation, or an appointed official of the state. States receive a special-purpose EIN for the portal and do not file a Form SS-4. Because the portal is brand new, Treasury says the IRS "is considering the creation of alternative temporary procedures" so that every state that wants in can complete its first-year filing. Until February 15, a state can replace or add to its 2027 list as often as it needs to. After that date it cannot add anyone for 2027; a late organization waits for the 2028 list. State removals can happen at any time during the year, but only through a procedure that gives the organization due process. From 2028 on, the calendar repeats every year. An election covers one calendar year. A state files its advance election between January 2 and September 30 of the year before, then submits its list between October 1 and January 1, and Treasury clarified that "on or before January 1 of that year" means "up to 11:59 pm on January 1," which gives a newly inaugurated governor the day to act. Once a state has completed its election for a year, it cannot revoke it. A state that wants to stop participating simply does not complete the next year's election. For SGOs, the date to circle is January 1, 2027. The rules let a state list an organization whose 501(c)(3) application is still pending with the IRS, which is how most new SGOs will reach a 2027 list. The condition is that the organization's exemption, once granted, "will be effective retroactively to a date that is on or before January 1 of the year for which the State SGO list applies." Treasury says that date turns on when the organization was formed, when it applied, and whether it had to make material changes to qualify. An exemption generally reaches back to formation when the application is filed on time, so an organization formed after January 1, 2027 cannot use this route for a 2027 list. A state that uses the pending route must use it for every pending applicant seeking inclusion, not just some. A new organization will not have a year of operations to show a state, and the rules account for that. Under the transition rule, a state can rely on the organization's governing documents or bylaws, its written policies and procedures, and other documentation it submits, as long as those documents "expressly require" the organization to meet the §25F operating requirements and show its ability and intent to do so. That makes the bylaws and policies you draft this fall the evidence a state reviews this winter. The [state-list step of the free SGO Builder](https://eftccredit.com/build/get-on-the-state-list) and our guide on [how to start an SGO](https://eftccredit.com/learn/how-to-start-an-sgo) walk through what those documents need to say. Two IRS dates follow. Every SGO must register in the new IRS SGO portal "as soon as possible and preferably before the organization appears on any State SGO list," because registration is how it gets the uniform format for the donor numbers its donors will need. Then, for gifts made in 2027, written acknowledgments go to donors by January 31, 2028, and the SGO reports each donor's total to the IRS by February 28, 2028. The [donor number explainer](https://eftccredit.com/learn/25f-donor-number) and the [SGO compliance calendar](https://eftccredit.com/learn/sgo-compliance-calendar) lay out the full cycle. Counting backward from February 15, a state has to finish reviewing applications before it files, so its own application window will close earlier than that. If you are forming an SGO, file the formation papers before January 1, apply for 501(c)(3) status promptly, and watch your state's application process on the [states page](https://eftccredit.com/states). The [§25F timeline](https://eftccredit.com/learn/eftc-timeline-key-dates) keeps every date in one place, and the [free SGO Builder](https://eftccredit.com/build) turns them into a checklist. Sources: - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, temporary regulations, T.D. 10057, RIN 1545-BS17, Doc. 2026-20264: https://www.federalregister.gov/public-inspection/2026-20264/federal-scholarship-tax-credit - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, notice of proposed rulemaking, REG-117199-25, RIN 1545-BR97, Doc. 2026-20277: https://www.federalregister.gov/public-inspection/2026-20277/federal-scholarship-tax-credit - U.S. Department of the Treasury: Treasury and IRS Issue Proposed Regulations to Implement the Education Freedom Tax Credit (press release sb0641, Oct. 1, 2026): https://home.treasury.gov/news/press-releases/sb0641 Canonical: https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026 ### 96% of children in participating states would qualify for §25F scholarships under Treasury's income rules Date: 2026-10-01. Category: regulatory. Under the proposed §25F regulations Treasury and the IRS released on October 1, 2026, about 96% of school-age children in the states taking part would be eligible for an Education Freedom Tax Credit scholarship. The statute caps eligibility at a household income of 300% of area median gross income, but how "income" is counted decides who clears that line, and Treasury's own analysis shows its choice moves the share of eligible children from 64% to 96%. The rules are proposed, and families, SGOs, and states may rely on them for 2027. [Our full breakdown of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026) covers the rest of the package, and the text is archived on our [proposed regulations page](https://eftccredit.com/documents/treasury-proposed-regulations). Why the definition matters. §25F borrows "area median gross income" from section 42, the low-income housing credit, which in turn points to the HUD Section 8 rules. Section 8 household income is broad: it counts child support and alimony, and it imputes a return on a family's assets above $50,000, which can include unrealized appreciation in a home. Under that strict HUD definition, Treasury estimates 64% of elementary and secondary school-age children would qualify. The proposed rule keeps Section 8 as the base, including its adjustments for family size, but "would disregard items not received in cash by a member of the household because such items are unlikely to be documented and verifiable." Counting cash income only raises the share to 95%. Adding the safe harbors described below brings it to 96%. Treasury's table measures children ages 5 to 17 in the states that had made advance elections as of July 2026. Who counts as the household. The household is the student plus the people living with the student. Income is measured for the calendar year before the scholarship application. For shared custody, the relevant household is the one where the student lives longest during the year; if the time is split evenly, it is the household with the higher income. The IRS expects to publish the income limits by area and family size each year in the Internal Revenue Bulletin, so SGOs will not have to build the tables themselves. Four ways to verify. SGOs must verify income, and the proposed rule gives them four routes. The first is direct verification from documents such as pay stubs, prior-year federal or state tax returns, IRS transcripts, Forms W-2, and evidence of income those miss, like child support. The second is categorical: a letter dated within the last 12 months showing that someone in the student's household is currently approved for SNAP, TANF, WIC, Section 8 housing, or SSI. Treasury estimates about 10 million children ages 5 to 17, in about 6 million households in participating states, live with a recipient of one of these programs. School-wide free or reduced-price lunch eligibility does not count, because the statute requires a household-level determination, and Treasury has asked for comments on adding state or tribal programs to the list. The third is a foster-child safe harbor: foster children are treated as meeting the income test without verification. The fourth route is a safe harbor for individual tutoring or special-needs services at schools in low-income areas. If the school is in a HUD qualified census tract, or certifies that at least 80% of its students live in one, and the school picks the students based on academic or special need, those students are treated as meeting the income test. The SGO must obtain an annual third-party audit of its use of the safe harbor and give the report to the state. Treasury estimates this route makes about 170,000 students eligible who otherwise would not be. SGOs can set a lower bar. The 300% figure is a ceiling, not a requirement to serve everyone under it. Treasury's preamble says an SGO that limits scholarships to households at or below 50% of area median gross income, and meets every other requirement, is still an eligible SGO. Students must also be eligible to enroll in a public elementary or secondary school, and they must live in the state whose SGO list the organization is on, with narrow exceptions for military families and families on Indian lands. For families, the practical takeaway is that most households will qualify, and a recent benefit letter or last year's tax return is usually all it takes. For SGOs, building intake around the categorical and foster-care routes cuts paperwork for the families least likely to have it ready. Our guides to [income verification for SGOs](https://eftccredit.com/learn/income-verification-for-sgos) and [scholarship eligibility](https://eftccredit.com/learn/scholarship-eligibility) walk through the details, the [states page](https://eftccredit.com/states) shows whether your state is participating, and the free [SGO Builder](https://eftccredit.com/build) covers setting up an organization from the start. Sources: - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, notice of proposed rulemaking, REG-117199-25, Doc. 2026-20277 (household income, verification methods, and Table 2): https://www.federalregister.gov/public-inspection/2026-20277/federal-scholarship-tax-credit - U.S. Department of the Treasury: Treasury and IRS Issue Proposed Regulations to Implement the Education Freedom Tax Credit (press release sb0641, Oct. 1, 2026): https://home.treasury.gov/news/press-releases/sb0641 - HUD: Qualified Census Tracts and Difficult Development Areas: https://www.huduser.gov/portal/sadda/sadda_qct.html Canonical: https://eftccredit.com/news/96-percent-children-eligible-25f-scholarships-income-rules-october-2026 ### 85%: the number that decides how an SGO meets the §25F 90% rule Date: 2026-10-01. Category: regulatory. Two percentages sit at the center of Treasury's §25F rules for scholarship granting organizations, and they do different jobs. The 90% is the spending rule. It comes from the statute: an SGO must spend at least 90% of "the income of the organization" on scholarships for eligible students. The 85% is an activity test. It is new in the [proposed regulations](https://eftccredit.com/documents/treasury-proposed-regulations) Treasury released on October 1, 2026, and it decides what the 90% is measured against. An organization whose activities are at least 85% scholarship granting measures the 90% against its §25F account. Any other organization measures it against everything it takes in. Treasury's starting point is strict. The proposed rule reads "income of the organization" as "the total gross receipts of the organization from all sources," counted on the cash method and unreduced by any expenses. Many commenters had asked Treasury to count only the donations made for the credit, warning that an SGO might not be able to operate on 10% of its entire income. Treasury declined to make that the general rule, explaining that the statute's separate-account requirement "is a tracing and anti-commingling rule for qualified contributions" and does not shrink the income figure the 90% applies to. The safe harbor is how Treasury answered the concern. If at least 85% of a single-state SGO's activities are scholarship granting, whether the scholarships come under §25F, a state tax-credit program, or anything else, it can apply the operating requirements to its §25F segregated account instead of the whole organization. For the spending rule, income then means "the total amount of qualified contributions received by, and earnings credited to, the section 25F segregated account during the taxable year." Administration, fundraising, governance, investment, compliance, and outreach count as scholarship granting when they support the scholarship work. Treasury states the purpose directly: the safe harbor allows SGOs "to raise funds for administrative costs that would not count toward the 90 percent of income spending requirement." Its economic analysis says the same thing in plainer terms: SGOs could spend more than 10% of their income on overhead "if such income is not part of the section 25F segregated account." In practice, at least 90% of what comes into the §25F account, the donations made for the credit plus their earnings, goes to scholarships, and separate gifts and grants can pay to run the organization. Treasury's own data show why the line matters. Among SGOs already running state scholarship programs, program-related spending averaged 78% of total revenue in fiscal year 2024, and Form 990 data show 72% of existing SGOs spend less than 90% of revenue on programs. An organization-wide 90% test would have caught nearly three quarters of them, about 450 SGOs in participating states. Treasury estimates that without the safe harbor, SGOs would receive 18% fewer qualified contributions. After accounting for donors who shy away from organizations with higher overhead, it puts the net gain at up to $3 billion a year in scholarship funding and roughly 250,000 more scholarship recipients each year. Organizations with more than 15% of their work outside scholarships do not get the safe harbor, so the 90% test applies to all of their receipts. That describes many school foundations and community nonprofits, including the public-school-side groups [now planning for §25F](https://eftccredit.com/news/public-schools-plan-25f-scholarships-denver-clark-county-september-2026). In July, AASA and twelve other education organizations [asked Treasury to apply the test to the segregated account](https://eftccredit.com/news/public-school-coalition-treasury-letter-90-percent-rule-july-2026) across the board. The proposed rule does that only past the 85% line, calling the safe harbor "a narrow administrative accommodation for organizations whose overall operations overwhelmingly consist of granting scholarships." Treasury expects the consequence, noting the safe harbor "may require the formation of new organizations to conduct section 25F activities," and the rules make room for it: a state may list an organization whose 501(c)(3) application is still pending, as long as the exemption takes effect on or before January 1 of the year the list covers. Our guide to [turning an existing nonprofit into an SGO](https://eftccredit.com/learn/existing-nonprofit-to-sgo) walks through that choice. Multistate SGOs do not get a choice. An organization on more than one state's list must be at least 85% scholarship granting, keep a separate §25F account for each state, and meet the 90% test separately for each account. Donors choose which state's account receives their gift. SGOs using the safe harbor, and every multistate SGO, would also certify each year, alongside their Form 990, that at least 85% of their activities were scholarship granting. Treasury left the measurement itself open. It asked for comments on how an organization should measure its scholarship-granting activities, "including whether the determination should be based on receipts, expenditures, staff time, program-service activity, or another administrable metric," and on whether 85% is the right threshold. Comments on the proposed rule are due December 1, 2026. Until final rules publish, SGOs may rely on the proposed rule for contributions made from January 1, 2027, as long as they follow it in full and consistently. For an organization deciding its structure now, the first question is whether scholarships are at least 85% of what it does. If they are, set up the §25F segregated account and plan to spend 90% of each year's account income on scholarships by the end of the following year. If they are not, consider a dedicated organization formed before January 1, 2027. Our [90% rule compliance guide](https://eftccredit.com/learn/sgo-90-10-rule-compliance) has the mechanics, the [full breakdown of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026) covers everything else, the free [SGO Builder](https://eftccredit.com/build) walks through formation step by step, and the [SGO directory](https://eftccredit.com/sgos) shows who is already operating. Sources: - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, notice of proposed rulemaking, REG-117199-25, proposed §§ 1.25F-3(c)(2)-(4) and 1.25F-4(d)(2)(ii), and the economic analysis of the safe harbor: https://www.federalregister.gov/public-inspection/2026-20277/federal-scholarship-tax-credit - U.S. Department of the Treasury: Treasury and IRS Issue Proposed Regulations to Implement the Education Freedom Tax Credit (Oct. 1, 2026): https://home.treasury.gov/news/press-releases/sb0641 - 26 U.S.C. §25F(d)(1)(B), the 90 percent of income spending requirement: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/85-percent-safe-harbor-how-sgos-meet-90-percent-rule-25f-october-2026 ### $2,200 back on a $2,500 gift: Treasury lets donors keep their state credit and the full §25F credit Date: 2026-10-01. Category: regulatory. The headline number in Treasury's §25F rules is $3,400 for married couples. The number that matters most to donors in states that already run scholarship tax credits is $2,200. Under the [proposed regulations released October 1, 2026](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026), a donor who gives $2,500 and claims a $500 state credit keeps the full $1,700 federal credit. That is $2,200 back on a $2,500 gift. The donor gets both credits, where a different reading of the statute would have left them with $1,700 back in total. Why there was a question at all. §25F does two things to the credit. Section 25F(b)(1) caps it at $1,700. Section 25F(b)(2) reduces it "by the amount allowed as a credit on any State tax return of the taxpayer for qualified contributions." The statute lists the cap first and the state-credit reduction second, so one way to read it is: cap the gift at $1,700, then subtract the state credit. On a $2,500 gift with a $500 state credit, that gives a federal credit of $1,700 minus $500, or $1,200. Add the $500 state credit and the donor gets $1,700 back. Treasury read it the other way. The preamble says Treasury and the IRS "do not interpret this ordering of the provisions as reflecting an intent to apply the $1,700 limitation to the amount of a taxpayer's qualified contributions before application of the State credit reduction," and the proposed rule sets out three steps: total the qualified contributions, subtract any state credits allowed for them, then take the lesser of that amount or $1,700. On the same gift: $2,500 minus $500 is $2,000, so the federal credit is the full $1,700. With the $500 state credit, the donor gets $2,200 back, $500 more than under the rejected reading. Treasury explains that the state-credit reduction exists to stop a donor from "receiving combined Federal and State tax benefits exceeding the value of the taxpayer's qualified contributions," not to shrink the federal credit in states that already offer their own, which "would discourage those States from continuing to provide a State tax incentive." The gift has to be big enough to cover both. The reduction still applies; it just comes first. In Treasury's Example 3, a donor gives $2,000 in qualified contributions and claims a $400 state credit. Subtracting the $400 leaves $1,600, which is under the cap, so the federal credit is $1,600: $2,000 back on a $2,000 gift. The combined benefit can reach the size of the gift, never more. Treasury's economic analysis walks through a larger case: a donor in a state with a 100% credit of up to $2,000 gives $5,000 and designates $1,700 of it for §25F. That donor gets $2,000 off state tax and $1,700 off federal tax, a total of $3,700. Designate part of a gift, and the state credit lands on the rest. When one contribution earns a state credit and only part of it is designated for §25F, the proposed rule treats the state credit as coming first from the part that is not designated. In Example 4, a donor gives $4,000, designates $1,700 as a qualified contribution, and claims a $400 state credit on the whole gift. The $400 is absorbed by the $2,300 that was not designated, so the full $1,700 federal credit survives. Two more details work in the donor's favor: a state tax deduction, as opposed to a credit, does not reduce the federal credit at all, and the part of a gift that does not earn the federal credit may still be deductible as a charitable contribution if it meets the usual section 170 rules. This replaces the advice we gave [in May](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026), when the safest reading was to treat state and federal credits as applying to separate donations. Treasury estimates that about 46.5 million taxpayers will be eligible for both a state and a federal credit for SGO contributions, and that at a 10% take-up rate the rule applying a state credit to non-designated dollars first is worth up to $1,700 a year to 3.1 million taxpayers and up to $3,400 a year to another 1.55 million married taxpayers. These are proposed rules, and comments are open until December 1, but Treasury says taxpayers may rely on them for contributions made on or after January 1, 2027. The rule text and examples are in our [archive of the proposed regulations](https://eftccredit.com/documents/treasury-proposed-regulations) (proposed § 1.25F-2(c)). For SGOs in states with their own scholarship credit programs, this is the clearest pitch the rules offer: a donor no longer has to choose between the state credit and the federal one. Our explainers on [how §25F works alongside state credits](https://eftccredit.com/learn/ecca-vs-state-tax-credits) and [which states run their own programs](https://eftccredit.com/learn/state-tax-credit-scholarship-programs) cover the background, and [recruiting donors for your SGO](https://eftccredit.com/learn/recruiting-donors-for-your-sgo) covers the ask. Check where your state stands on the [states page](https://eftccredit.com/states), and if you are forming an organization, the [free SGO Builder](https://eftccredit.com/build) walks through each step. Sources: - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, notice of proposed rulemaking, REG-117199-25, Doc. 2026-20277 (preamble part II.F; proposed § 1.25F-2(c) and (h), Examples 3 and 4; Special Analyses): https://www.federalregister.gov/public-inspection/2026-20277/federal-scholarship-tax-credit - U.S. Department of the Treasury: Treasury and IRS Issue Proposed Regulations to Implement the Education Freedom Tax Credit (press release sb0641, Oct. 1, 2026): https://home.treasury.gov/news/press-releases/sb0641 - 26 U.S.C. §25F(b), limitation and reduction for state credits: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/keep-state-credit-full-25f-credit-2200-ordering-rule-october-2026 ### $3,400: married couples can claim double the §25F credit under Treasury's proposed rules Date: 2026-10-01. Category: regulatory. A married couple filing a joint return can claim up to $3,400 a year in federal Education Freedom Tax Credit, twice the figure most donors have been planning around. That is the reading in the proposed §25F regulations Treasury and the IRS released on October 1, 2026, and the rule text is short: "For purposes of section 25F(b)(1), married taxpayers who elect to file a joint return under section 6013(a) and § 1.6013-1(a) are treated as separate taxpayers." Each spouse has their own $1,700 cap. The rules are proposed, not final, but Treasury says taxpayers may rely on them for contributions made on or after January 1, 2027. [Our full breakdown of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026) covers everything else in the package. Why this was ever a question. The statute caps the credit at $1,700 "to any taxpayer for any taxable year" and says nothing about filing status. Elsewhere in the tax code, Congress usually spells it out when a limit differs for married couples, as Treasury itself notes with the 2018 version of the state and local tax deduction cap ($10,000, or $5,000 for married filing separately) and the first-time homebuyer credit. With no such language in §25F, the cautious reading was one $1,700 cap per joint return, and that is the reading [we gave in May](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026). In August, [Sen. Cindy Hyde-Smith's S. 5322](https://eftccredit.com/news/hyde-smith-s5322-joint-return-3400-inflation-25f-august-2026) proposed settling it at $3,400 by amending the statute. Treasury's reasoning. Treasury sided with the "significant number of stakeholders" who asked that "taxpayer" apply to each spouse. It pointed to regulations that have long treated a joint return as two taxpayers sharing one income. One of them reads: "Since, in the case of a joint return, there are two taxpayers (although under section 6013 there is only one income for the two taxpayers on such return, i.e., their aggregate income), two exemptions are allowed on such return, one for each taxpayer spouse." Treasury added that "the statutory language of 'any taxpayer' without any limitation in section 25F also implies the broadest interpretation," consistent with the Code's definition of a taxpayer as "any person subject to any internal revenue tax." How the $3,400 works. Treasury's own example in the proposed rule: in January 2027, spouses B and C each contribute $2,000 to an SGO, each designates the full amount as a qualified contribution, and each receives a written acknowledgment. Each gift produces a $1,700 credit, "resulting in a total of $3,400 that may be claimed on B and C's joint return." The $3,400 that earned the credit cannot also be deducted as a charitable contribution, but the remaining $600 of the $4,000 may be deductible if it meets the usual charitable deduction rules. The practical point is in the facts of the example: the credit follows each spouse's own designated gift. The proposal does not say how a single gift from a joint account would be split between spouses, so the clean approach is the one in Treasury's example, two gifts, one from each spouse, each designated as a §25F contribution when it is made. The limits that still apply. The credit is nonrefundable, so the couple's combined credit cannot exceed their federal tax liability for the year, and it is allowed against both the regular income tax and the alternative minimum tax. Any unused amount carries forward for up to five years, with older credits used first. A couple whose tax bill is smaller than $3,400 in a given year does not lose the difference; it rolls into later years. Proposed, and reliable for 2027. Comments on the proposed rule are due December 1, 2026, and a public hearing is set for December 15. Until a final rule is published, Treasury says taxpayers "may rely on these proposed regulations for qualified contributions made on or after January 1, 2027," provided they follow the proposed rules "in their entirety and in a consistent manner." The full text is in our [archive of the proposed regulations](https://eftccredit.com/documents/treasury-proposed-regulations). What it means for SGOs. The ask to a married household just doubled. Donor materials built around "$1,700 per return" now undersell the credit by half for couples, and a two-spouse ask needs two designated gifts. Because the rules give a unique donor number to each donor who designates a gift, a couple giving separately should expect separate acknowledgments to carry onto their Form 8525. Our guide to [recruiting donors for your SGO](https://eftccredit.com/learn/recruiting-donors-for-your-sgo) and the [year-end tax planning guide](https://eftccredit.com/learn/eftc-year-end-tax-planning) cover the donor side. If you are still forming your organization, the free [SGO Builder](https://eftccredit.com/build) walks through each step, and the [SGO directory](https://eftccredit.com/sgos) shows who is already operating. Sources: - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, notice of proposed rulemaking, REG-117199-25, Doc. 2026-20277 (prop. § 1.25F-2(a)(2) and (h) Example 2): https://www.federalregister.gov/public-inspection/2026-20277/federal-scholarship-tax-credit - U.S. Department of the Treasury: Treasury and IRS Issue Proposed Regulations to Implement the Education Freedom Tax Credit (press release sb0641, Oct. 1, 2026): https://home.treasury.gov/news/press-releases/sb0641 - 26 CFR § 1.151-1, deductions for personal exemptions (joint return as two taxpayers): https://www.law.cornell.edu/cfr/text/26/1.151-1 - 26 U.S.C. §25F (federal Education Freedom Tax Credit): https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/married-couples-3400-25f-credit-joint-return-proposed-rule-october-2026 ### Treasury's §25F rules are out: $3,400 for married couples, a workable 90% test, and no state add-ons Date: 2026-10-01. Category: regulatory. Update, October 2, 2026: the rules were published in the Federal Register on October 2 (proposed rule at 91 FR 62818, temporary regulations at 91 FR 62655; comment docket IRS-2026-1354). On an October 1 call with the Federal Scholarship Tax Credit Coalition, Kevin Salinger, Treasury's Deputy Assistant Secretary for Tax Policy, said the separate guidance on which expenses scholarships can pay for will be released by the end of the year, and that final regulations probably won't be in place until 2028, The 74 reported. "We're going to see where the kinks are and we're going to smooth them out," he said. "The guidance process is not complete." The rules are here. On October 1, 2026, Treasury and the IRS filed the regulations for the federal Education Freedom Tax Credit (§25F) for public inspection at the Federal Register, two days after they [cleared White House review](https://eftccredit.com/news/25f-rules-clear-oira-white-house-review-concluded-september-2026). There are two documents. The first is a 181-page [notice of proposed rulemaking (REG-117199-25)](https://eftccredit.com/documents/treasury-proposed-regulations) covering the whole credit: who can claim it, how much, what an SGO must do, and what a state must certify. The second is 61 pages of [temporary regulations (T.D. 10057)](https://eftccredit.com/documents/treasury-temporary-regulations-td-10057) that cover the pieces needed before January 1: SGO registration with the IRS, donor acknowledgments and reporting, and the procedures for state elections and SGO lists. The temporary regulations take effect without a comment period and apply from September 1, 2026. Both are scheduled for publication in the Federal Register on October 2. The proposed rules are not final, but Treasury says taxpayers, organizations, and states "may rely on these proposed regulations for qualified contributions made on or after January 1, 2027," as long as they follow them in full and consistently. Married couples: up to $3,400. The statute caps the credit at $1,700 "to any taxpayer," and whether a joint return counts as one taxpayer or two was the biggest open question for donors. Treasury chose two. The proposed rule says that for the $1,700 cap, "married taxpayers who elect to file a joint return ... are treated as separate taxpayers," so a couple can claim up to $3,400 on a joint return when each spouse gives at least $1,700. Treasury grounds that reading in long-standing regulations that treat a joint return as two taxpayers sharing one income. It replaces the cautious reading we gave [in May](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026), and it does by regulation what [Sen. Hyde-Smith's S.5322](https://eftccredit.com/news/hyde-smith-s5322-joint-return-3400-inflation-25f-august-2026) proposed to do by amendment. Two practical notes: each spouse makes and designates their own gift (in Treasury's example, each spouse gives $2,000 and each gets a $1,700 credit), and the combined credit still cannot exceed the couple's tax liability, with any unused credit carried forward for up to five years. Keep your state credit and the full federal credit. §25F reduces the federal credit by any state tax credit for the same contributions, and the question was whether that reduction comes before or after the $1,700 limit. Treasury put it before, which means a state credit no longer eats into the federal one as long as the gift is large enough to cover both. Its example: give $2,500 and claim a $500 state credit. Subtract the $500 from the $2,500 first, leaving $2,000, so the federal credit is the full $1,700 and the donor gets $2,200 back in total. Apply the cap first instead, and the federal credit drops to $1,700 minus $500, or $1,200, for $1,700 back in total. Treasury's reading is worth $500 more to that donor. When a state credit covers a mix of gifts, it is applied first to contributions not designated for §25F, which preserves as much of the federal credit as possible. A state tax deduction, as opposed to a credit, does not reduce the federal credit at all. Treasury's stated aim is only to keep the combined state and federal benefit from exceeding the gift itself, so donors in the states that already run scholarship tax credits can use both programs. The 90% test, and how SGOs can meet it. The statute requires an SGO to spend at least 90% of "the income of the organization" on scholarships. Treasury reads "income" as all gross receipts from every source, which would be a hard test for any organization that does more than scholarships. The relief is a safe harbor: if at least 85% of an organization's activities are scholarship granting (counting the administration, fundraising, and compliance work that supports it), it measures the 90% test against its §25F segregated account alone, meaning the qualified contributions and their earnings. In plain terms: at least 90% of what comes into the §25F account, the donations made for the credit plus their earnings, goes to scholarships, and the organization can raise separate money to run itself, which Treasury says is part of the point. Treasury estimates the safe harbor could bring in about 450 additional organizations. The 90% for each year's income has to be spent by the end of the following taxable year, so a first-year SGO has until the end of its second year. Money counts as spent when it is paid, so a multi-year award counts in the year each payment goes out, and funds moved to a qualified digital wallet count when transferred, as long as the SGO does not keep ownership of them. Two consequences matter for anyone still deciding how to set up. An organization whose non-scholarship work is more than 15% of its activities, such as a school foundation or community nonprofit with other programs, gets no safe harbor, so the 90% test would apply to everything it takes in. Treasury acknowledges the safe harbor "may require the formation of new organizations to conduct section 25F activities," and the rules make room for that: a state may list an organization whose 501(c)(3) application is still pending with the IRS, as long as the exemption, once granted, takes effect on or before January 1 of the year the list covers. An exemption generally reaches back to the date the organization was formed when the application is filed on time, so a new organization aiming for a 2027 list should be formed by January 1, 2027. A multistate SGO must be at least 85% scholarship granting, keep a separate §25F account for each state that lists it, and meet every requirement state by state, and donors choose which state's account their gift goes to. One national standard: states cannot add conditions. An SGO is "located in" a state if it is authorized to do business there and complies with the state's general rules for charities. No headquarters or in-state staff is required, which lets established SGOs serve several states. A participating state may not require SGOs to operate under rules more restrictive than §25F's, "such as by limiting the type of school that scholarship recipients may attend or the types of qualified elementary or secondary education expenses for which scholarship funds may be used." States still screen applicants, with application, documentation, and financial-reporting requirements tailored to the federal tests and to fraud prevention. A state must certify that its list includes every qualifying organization that asks to be on it, may remove an SGO only through a procedure that gives it due process, and is subject to IRS review of its procedures. These provisions are in the temporary regulations, which apply from September 1, 2026, so they govern the 2027 lists states are building now. That settles the [floor-or-ceiling question](https://eftccredit.com/news/federal-floor-or-ceiling-25f-state-restrictions-june-2026) in favor of one uniform program, and it is the scenario [Vermont's Act 164](https://eftccredit.com/news/vermont-h933-restrict-25f-opt-in-june-2026) anticipated when it directed its governor to decline if federal rules overrode the state's conditions. Students: where they live, and almost all of them qualify. "Solely within the State" refers to the student's residence, not the school's location. A student who lives in a participating state can use a scholarship from an SGO on that state's list at a school across the state line, while a student who lives in another state cannot, with exceptions for military families and for students whose families reside on Indian lands. The household income limit, 300% of area median gross income, follows the HUD Section 8 rules but ignores non-cash items such as an imputed return on home equity, and Treasury says roughly 96% of children in participating states would be eligible. SGOs can verify income from pay stubs, tax returns, or IRS transcripts, or instead rely on a household member's SNAP, TANF, WIC, Section 8, or SSI award letter from the last 12 months. Foster children qualify automatically, and a separate safe harbor covers tutoring and special-needs scholarships at schools in low-income census tracts, backed by an annual third-party audit. An SGO is free to set a lower income limit of its own. What scholarships pay for, and how the money moves. "School" means a K-12 school as determined under state law, the section 530 definition. Treasury's announcement lists private-school tuition, academic tutoring, special-needs services, books, supplies, computers, and other equipment among the expenses scholarships can support, and the preamble to the proposed rule says detailed section 530 guidance on qualified expenses and schools is "a high priority" that Treasury intends to issue "as soon as possible." The proposed rule does set out the payment mechanics: tuition and school charges go directly to the school, other vendors must be verified and unrelated to the family, money to families is limited to reimbursements backed by receipts, and SGOs may pay through a qualified digital wallet. Every SGO needs systems that stop two scholarships from paying for the same expense. Who cannot receive a scholarship. Officers, directors, and trustees; anyone who helps choose recipients, paid or not; substantial contributors, meaning anyone who gives more than $5,000 in a year when that is also more than 2% of the year's contributions, a test run against the SGO as a whole and again against its §25F account; and the family members of all of them. There is no exception for blind or anonymized selection. A spouse's gifts count toward the other spouse's total, and substantial-contributor status lasts for that year and the next. The paperwork, starting now. Every SGO must register in a new IRS SGO portal "as soon as possible and preferably before" it appears on any state list, because registration is how it gets the format for the unique donor numbers donors will need, which Treasury chose so SGOs do not collect Social Security numbers (our [donor number explainer](https://eftccredit.com/learn/25f-donor-number) covers how it works). By January 31 each donor gets a written acknowledgment with the SGO's EIN, the year's designated total, the donor number, and any goods or services provided; by February 28 the SGO reports each donor's name, address, and total to the IRS. Donors claim the credit on Form 8525 and list each SGO's donor number. A gift must be cash (checks, cards, electronic transfers, and after-tax payroll deduction count; digital assets do not), the donor must designate it as a §25F contribution when giving, and that designation cannot be revoked. Gifts made through a partnership or S corporation do not count. Under the proposed rule, SGOs would also attach an annual certification to their Form 990 and commission an annual financial and programmatic audit, from an independent professional above $500,000 in receipts or a committee of independent people at or below it. The calendar for states. For 2027, a state must file its advance election on [Form 15714](https://eftccredit.com/news/irs-form-15714-advance-election-december-2025) by January 1, 2027, and then complete it by submitting its SGO list by February 15, 2027. A state that misses the second step is out for the year. Elections cover one calendar year at a time and cannot be revoked once completed. For new organizations without an operating history, a state can rely on governing documents, written policies, and other records. Treasury counts 30 states that had elected as of August 2026, and states still deciding, including [New York](https://eftccredit.com/states/new-york), whose governor said she would review the federal guidance before formally filing, now have the rules in hand with three months to act. What comes next. Comments on the proposed rule are due 60 days after publication, which works out to December 1, 2026, through regulations.gov under REG-117199-25 ([docket IRS-2026-1354](https://www.regulations.gov/commenton/IRS-2026-1354-0001)). A public hearing is scheduled for December 15, 2026 at 10 a.m. Eastern; requests to speak are due with the comments, and the hearing will be canceled if none arrive. The temporary regulations expire October 1, 2029. Treasury estimates that by 2030 the program will support 600 to 700 SGOs, with more than 11 million taxpayers giving nearly $26 billion a year and funding as many as 2.2 million scholarships. For anyone building an SGO, the rules turn months of guessing into a checklist: make sure the organization clears the 85% activity test or form a dedicated one, register in the IRS portal when it opens, set up the segregated §25F account and donor-number acknowledgments, and apply to your state's list well ahead of the February 15 filing deadline. Our [free SGO Builder](https://eftccredit.com/build) walks through formation, the [SGO directory](https://eftccredit.com/sgos) shows who is already operating, and the [states page](https://eftccredit.com/states) tracks where every state stands. Sources: - The 74 (Oct. 1, 2026): In long-awaited rules for tax credit scholarships, feds stress neediest students: https://www.the74million.org/article/in-long-awaited-rules-for-tax-credit-scholarships-feds-stress-neediest-students/ - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, notice of proposed rulemaking and public hearing, REG-117199-25, RIN 1545-BR97, Doc. 2026-20277 (181 pp.): https://www.federalregister.gov/public-inspection/2026-20277/federal-scholarship-tax-credit - Federal Register (public inspection, Oct. 1, 2026): Federal Scholarship Tax Credit, temporary regulations, T.D. 10057, RIN 1545-BS17, Doc. 2026-20264 (61 pp.): https://www.federalregister.gov/public-inspection/2026-20264/federal-scholarship-tax-credit - U.S. Department of the Treasury: Treasury and IRS Issue Proposed Regulations to Implement the Education Freedom Tax Credit (press release sb0641, Oct. 1, 2026): https://home.treasury.gov/news/press-releases/sb0641 - 26 U.S.C. §25F (federal Education Freedom Tax Credit): https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026 ### Colorado lines up three public-school SGOs and plans to file its §25F list before January 1, which would settle 2027 before the next governor takes office Date: 2026-10-01. Category: state-action. State: CO. Colorado is the only state with a Democratic governor who opted in personally ([Polis made the election in December 2025](https://eftccredit.com/news/colorado-governor-polis-opts-in-december-2025)), and on October 1, the day Treasury released the §25F rules, his office said what comes next. The release names three new scholarship granting organizations aimed at public school students: "New SGOs like the Colorado Public Schools Foundation, Denver Public Schools Foundation Opportunity Fund, and Learn Everywhere Fund will provide ample opportunity for taxpayers to donate funds that will benefit public school students across the state." "I am glad that today's rules clarify that these donations can support public school students and I look forward to providing further comments on these draft rules," Polis said. "I encourage Colorado non-profit organizations to get ready to sign up, and for Coloradans to donate using this tax credit once available next year." The Denver foundation's plans for tutoring and after-school scholarships were part of [Chalkbeat's national report on public school SGOs](https://eftccredit.com/news/public-schools-plan-25f-scholarships-denver-clark-county-september-2026) on September 30; the Colorado Public Schools Foundation and the Learn Everywhere Fund are new names in the state's own announcement. The state list. The Colorado Department of Revenue "is updating its form for compiling Colorado's list of eligible SGOs, and will open that process in the near future," the release says, and "Colorado will submit its list of eligible SGOs to the Treasury ahead of January 1, 2027." (Under the temporary regulations, the list itself goes to the IRS through its State §25F portal.) Organizations can sign up for a notice when the process opens at [tax.colorado.gov/scholarship-granting-organizations](https://tax.colorado.gov/scholarship-granting-organizations). Because a participating state must list every qualifying SGO located in the state that asks, the form is a filing step for SGOs, not a selection. Why the timing matters. Colorado elects a new governor on November 3. Attorney General Phil Weiser, the Democratic nominee, "continues to stand against the program and is still reviewing the new rules," a campaign spokesperson told The Colorado Sun, while Republican nominee Victor Marx supports it. Treasury's temporary regulations (§ 1.25F-5T(c)(3)(ii)) say a state that made an advance election must "perfect its election by providing its State SGO list." For 2027 that window runs from October 1, 2026 through February 15, 2027. A state that never perfects is out for the year. Treasury's preamble adds that it does not read the statute "as allowing for any revocation once a State has completed its State election for the year, including an advance election that has been perfected." Put together: if Colorado files its list before January 1, as the governor's office says it will, Colorado's 2027 participation is complete before the next governor is sworn in. That matches what Madi Ashour of the Colorado Children's Campaign told the Sun, that the state is locked in "for at least a year" and that a future governor could exit later by not submitting a list for a following year. Each state election covers a single calendar year, so 2028 is a separate decision. Even then, Ashour noted, Coloradans could still claim the credit by giving to SGOs in other states: "The choice before Gov. Weiser is, do Colorado kids benefit from the credit or will those dollars flow out of the state?" For Colorado SGOs. The practical steps are the same for every organization: be authorized to do business in Colorado and in compliance with its charity laws (no in-state headquarters is required), meet the federal requirements, register when the IRS opens its portal, and get on the state's list before it is filed. Our free [SGO Builder](https://eftccredit.com/build) walks through each step, the [§25F calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026) has every deadline, and the [Colorado page](https://eftccredit.com/states/colorado) tracks the state's status. Sources: - Office of Gov. Jared Polis (Oct. 1, 2026): U.S. Treasury Announces Rules For Federal Scholarship Tax Credit, Governor Polis Celebrates that Public School Students Confirmed to Qualify: https://www.colorado.gov/governor/news/us-treasury-announces-rules-federal-scholarship-tax-credit-governor-polis-celebrates-public - The Colorado Sun (Oct. 2, 2026): Colorado can't back out of federal program some say will create school vouchers: https://coloradosun.com/2026/10/02/colorado-federal-tax-credit-scholarship-program-school-vouchers/ - Colorado Department of Revenue: Scholarship Granting Organizations: https://tax.colorado.gov/scholarship-granting-organizations - Federal Register, Oct. 2, 2026: Federal Scholarship Tax Credit, temporary regulations (T.D. 10057), 91 FR 62655, § 1.25F-5T(c): https://www.federalregister.gov/documents/2026/10/02/2026-20264/federal-scholarship-tax-credit Canonical: https://eftccredit.com/news/colorado-public-school-sgos-state-list-polis-weiser-marx-2027-october-2026 ### Denver's school foundation and Las Vegas-area public schools are drawing up plans to use §25F scholarships Date: 2026-09-30. Category: analysis. State: CO. Update, October 1, 2026: Treasury's rules, released a day after this report, leave the expense list and the meaning of "school" to separate section 530 guidance that Treasury calls a high priority, so the fee model is still an open question. The proposed regulations do set how money moves: tuition and fees a school charges must be paid directly to the school, other providers can be paid directly only if they are verified and not related to the student, and families can be reimbursed only against a receipt. [How scholarship money can be paid](https://eftccredit.com/news/four-ways-to-pay-25f-scholarship-money-schools-vendors-digital-wallets-october-2026). Some of the most detailed §25F planning right now is happening on the public school side. A national report by Erica Meltzer and Melanie Asmar in [Chalkbeat](https://www.chalkbeat.org/2026/09/30/how-school-choice-federal-tax-credits-could-help-students-in-public-schools/), published September 30, 2026, describes what it calls "a small but growing set of organizations," including school districts, charter schools, public school foundations, start-up nonprofits, and after-school providers, working out how to turn the federal Education Freedom Tax Credit into tutoring, after-school programs, and enrichment for public school students. In Colorado, the Denver Public Schools Foundation, which raises money for the state's largest district, hopes to use tax-credit dollars for tutoring and after-school scholarships. "Critics would say this wasn't created for us," its president and CEO, Sara Hazel, told Chalkbeat. "I believe there's money on the table, and public school students should benefit from that." Colorado is in the program because [Gov. Jared Polis opted in](https://eftccredit.com/news/colorado-governor-polis-opts-in-december-2025), and Chalkbeat reports the state has become a hot spot for planning, including one idea aimed at the roughly 130 Colorado districts on four-day school weeks: scholarship-funded programming on the fifth day. In Nevada, Chalkbeat reports that Clark County's public schools and the Public Education Foundation in Las Vegas are exploring a model proposed by Marguerite Roza, who leads the Edunomics Lab at Georgetown University. She calls it the K12 Plus Plan: a district puts together a fixed package of services, such as tutoring, arts, sports, or counseling, charges a fee for it, and scholarships cover the fee. The Las Vegas partners hope to build a package that local donors will find compelling. Nevada entered the program when [Gov. Joe Lombardo opted in](https://eftccredit.com/news/nevada-governor-lombardo-opts-in-25f-january-2026) in January. The report names others. Deb Gist, a former superintendent of Tulsa Public Schools, launched Future School Fund as an SGO to help district and charter schools pay for enrichment and education services. The Southern Education Foundation, which opposes the credit and supports repeal, decided after internal debate to launch a tutoring-focused SGO of its own. New York charter leader Ian Rowe argues a school's role is to connect families to trusted providers, from SAT prep to aviation programs. None of this is a stretch of the statute. §25F scholarships pay for "qualified elementary or secondary education expenses," which [the statute defines](https://eftccredit.com/documents/section-25f) by reference to section 530(b)(3)(A), the Coverdell education savings account rules. That definition reaches well past tuition, to tutoring, books and supplies, and educational technology, and the law expressly lets students in public and charter schools receive scholarships. It is the same structure Kentucky districts are using: [Logan County and Russell County signed agreements](https://eftccredit.com/news/kentucky-logan-county-schools-sgo-agreement-kentucky-education-fund-september-2026) with an approved SGO so their own students can apply. The open question is how far the rules let the fee model go. Not everyone in public education likes it. "We will never make up fees and then go pay for those fees with the scholarship," Shannon Hancock, chair of the Colorado School Foundations Association, told Chalkbeat. Roza herself calls it "certainly a circuitous route," though she believes it is legal. Treasury's rules, which [cleared White House review on September 29](https://eftccredit.com/news/25f-rules-clear-oira-white-house-review-concluded-september-2026), are expected to settle some of this, though Chalkbeat notes they likely won't answer every question. Public school groups have been pressing their case directly: the National Association of Education Foundations, whose members are foundations like Denver's and Las Vegas's, met with OIRA on the rules on September 25. For a district or school foundation weighing this, the structural point from Kentucky applies everywhere. A school district is a unit of government, not a 501(c)(3) public charity, so it cannot be an SGO itself. A district foundation that qualifies can form one, or the district can partner with an existing SGO. Either way the state has to have opted in and the SGO has to be on the state's list. Check your state on the [states page](https://eftccredit.com/states), see who is already operating in the [SGO directory](https://eftccredit.com/sgos), and if your foundation is forming its own, our free [SGO Builder](https://eftccredit.com/build) covers each step. Sources: - Chalkbeat: Public schools see 'money on the table' in education tax credit designed for private school choice (Erica Meltzer and Melanie Asmar, Sept. 30, 2026): https://www.chalkbeat.org/2026/09/30/how-school-choice-federal-tax-credits-could-help-students-in-public-schools/ - Reginfo.gov: EO 12866 meeting, RIN 1545-BS17, September 25, 2026, National Association of Education Foundations: https://www.reginfo.gov/public/do/viewEO12866Meeting?viewRule=true&rin=1545-BS17&meetingId=1543273&acronym=1545-TREAS/IRS - 26 U.S.C. §25F (federal Education Freedom Tax Credit): https://www.law.cornell.edu/uscode/text/26/25F - 26 U.S.C. §530(b)(3)(A), qualified elementary and secondary education expenses: https://www.law.cornell.edu/uscode/text/26/530 Canonical: https://eftccredit.com/news/public-schools-plan-25f-scholarships-denver-clark-county-september-2026 ### Pasco County's superintendent wants Florida public schools in on §25F, through Step Up For Students' new fund Date: 2026-09-30. Category: state-action. State: FL. Florida has been in §25F since [Gov. Ron DeSantis opted in on January 28](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026), and the state's largest scholarship administrator, Step Up For Students, [set up a dedicated federal fund](https://eftccredit.com/news/step-up-for-students-launches-dedicated-25f-sgo-florida-january-2026), the Step Up, Step Further Scholarship Fund, the same day. Most of the attention has been on private school tuition. In the Tampa Bay area, a public school district is planning to use the same fund for its own students. Pasco County Schools superintendent John Legg presented the idea to his school board, the Tampa Bay Times reported on September 30. The district plans to work with the Florida Chamber of Commerce and Step Up For Students on the Step Further fund, and district officials said the money could support district-provided tutoring, summer learning, STEM enrichment, and career and technical education certifications. "I think this is a statewide transformational program," Legg told the board. According to the Times, he wants the district to move early and to seek some degree of "exclusivity" for its programs within the partnership, rather than see the scholarship dollars go to outside providers. He also said he is "still learning the details" and has "assigned a top-level team that has been exploring the options for months." No board vote has been reported. The Chamber is thinking bigger. Its president, Mark Wilson, described a goal of a $3,000 "prosperity account" for every public school student who qualifies for free or reduced-price meals, and said: "$50 million in a county like Pasco is not unrealistic at all." That is a fundraising ambition, not a projection; §25F scholarships depend entirely on how much individual donors choose to give, up to $1,700 each in credit (Treasury's proposed rules allow up to $3,400 for a married couple when each spouse gives). Why this matters. Pasco joins a growing list of public school systems treating §25F as a source of money for their own students rather than a threat: [Denver and Clark County, Nevada](https://eftccredit.com/news/public-schools-plan-25f-scholarships-denver-clark-county-september-2026), and in Kentucky, [Logan and Russell counties signing on with a statewide fund](https://eftccredit.com/news/kentucky-logan-county-schools-sgo-agreement-kentucky-education-fund-september-2026). Treasury's October 1 rules confirmed that public school students can receive scholarships; the qualified expenses come from the education savings account list in section 530, which includes tutoring and special needs services. Treasury's detailed guidance on exactly which expenses qualify is still to come, and the plan's tutoring and summer programs will need to fit it. What the rules require of a plan like this. The scholarship organization, not the district, awards the scholarships, and it must verify each student's eligibility and expenses, fund at least ten students who do not all attend the same school, and never earmark a gift for a particular student. Donors can give through after-tax payroll deduction, which Treasury's rules count as cash; the Times noted paycheck deductions as one way to give. How much "exclusivity" a single district can get inside a statewide fund is a design question the federal rules do not answer directly. Opponents of §25F, including the national teachers unions, have asked Congress to repeal it ([who opposes §25F](https://eftccredit.com/news/who-opposes-25f-unions-democrats-repeal-bill-2026)). For districts and their education foundations weighing a similar move, our free [SGO Builder](https://eftccredit.com/build) covers the federal requirements, and the [Florida page](https://eftccredit.com/states/florida) tracks the state. Sources: - Tampa Bay Times (Sept. 30, 2026): Pasco schools see promise in federal tax credit scholarship plan: https://www.tampabay.com/news/education/2026/09/30/pasco-schools-see-promise-federal-tax-credit-scholarship-plan/ - Hernando Sun (Oct. 3, 2026): Pasco Superintendent Legg sees potential windfall for district in Big Beautiful Bill provision: https://www.hernandosun.com/2026/10/03/pasco-superintendent-legg-sees-potential-windfall-for-district-in-big-beautiful-bill-provision/ - Step Up, Step Further Scholarship Fund (Step Up For Students): https://www.stepupforstudents.org/ - Federal Register, Oct. 2, 2026: Federal Scholarship Tax Credit, proposed regulations (REG-117199-25), 91 FR 62818: https://www.federalregister.gov/documents/2026/10/02/2026-20277/federal-scholarship-tax-credit Canonical: https://eftccredit.com/news/pasco-county-schools-25f-step-further-fund-florida-chamber-september-2026 ### The White House finished reviewing the §25F rules on September 29. Publication is the only step left. Date: 2026-09-29. Category: regulatory. The White House has finished reviewing the §25F regulations. On September 29, 2026, the Office of Information and Regulatory Affairs (OIRA) marked its review of both rules concluded, according to the review records on reginfo.gov: [RIN 1545-BS17](https://www.reginfo.gov/public/do/eoAdvancedSearch?rin=1545-BS17&eoStatusCode=&_action=Search), the temporary regulations filed as an interim final rule, and [RIN 1545-BR97](https://www.reginfo.gov/public/do/eoAdvancedSearch?rin=1545-BR97&eoStatusCode=&_action=Search), the proposed regulations. Both carry the same conclusion code, Consistent with Change, OIRA's notation that the agency changed the rule during review before OIRA signed off. Neither rule has been published. As of September 30, neither appears in the Federal Register or on its public inspection list, where documents are posted at least a day before they publish. This is the step we have been watching for. Treasury sent both rules to OIRA on September 10, [as we reported then](https://eftccredit.com/news/25f-rules-reach-oira-interim-final-temporary-regs-september-2026), and OIRA is the last stop before publication. With review closed, timing is back in Treasury's hands: the rule is signed and sent to the Office of the Federal Register, which schedules it. There is no fixed interval between the two. Treasury has said it expected the proposed regulations by the end of September, so the calendar is tight either way. What changed during review is not public. The conclusion record says only that something did. Why the two labels still matter. BS17 is the half that opens the program. It covers how a state makes its election, how it submits its list of approved Scholarship Granting Organizations this fall, and what contributions an SGO must begin tracking on January 1, 2027. As an interim final rule, it binds the day it publishes, and comments come afterward. BR97, the fuller rulebook on enforcement, recordkeeping, and information reporting, is a proposed rule, so a formal comment period opens when it publishes. The meeting log on reginfo.gov still lists BS17 at the interim final rule stage and BR97 at the proposed rule stage, so nothing we can see suggests the instruments changed. Who got a word in before review closed. In the last week of review, OIRA logged nine meetings across the two rules, requested by six outside parties. On September 25: a coalition listed as "Disability and special education organizations," which filed two documents with OIRA, a set of comments on Treasury's request for comment and a December 2025 comment letter to Treasury; the National Association of Education Foundations, which represents foundations that raise money for public school districts; and Christian Matozzo, the attorney whose practice includes forming SGOs, whose meeting [we wrote about last week](https://eftccredit.com/news/superintendents-sgo-attorney-oira-meetings-25f-proposed-rule-september-2026). On September 28: AASA, The School Superintendents Association. On September 29: the NAACP Legal Defense Fund on both rules, and the Advancement Project on the proposed rule. The review was marked concluded the same day those last two meetings were scheduled. The log marks the September 25 meetings completed and still lists the later ones as scheduled; attendee lists posted for the September 25 meetings show Treasury and OMB staff joining by phone. Read the meeting list for what it is. It shows who asked to be heard, not what they asked for or whether any of it landed. Only the disability coalition's meeting has documents attached, and a request for a meeting is not a position on the final text. What the list does show is who is organized around the program: public school groups and civil rights organizations made five of the six requests, the same pattern we saw when [thirteen public school organizations wrote Treasury in July](https://eftccredit.com/news/public-school-coalition-treasury-letter-90-percent-rule-july-2026) about how the 90 percent spending test is measured. For governors still deciding, this is the document they have been waiting for. New Jersey Gov. Mikie Sherrill [has said she will evaluate the program](https://eftccredit.com/news/new-jersey-sherrill-noncommittal-25f-evaluate-may-2026) once the federal rules are out, and Michigan has been waiting on Treasury too, as we covered when [Secretary McMahon pressed Gov. Whitmer in August](https://eftccredit.com/news/mcmahon-sterling-heights-whitmer-override-state-board-25f-august-2026). Publication gives those offices something concrete to decide on. See where every state stands on the [states page](https://eftccredit.com/states). For organizations planning to run an SGO, the practical point is timing. Once BS17 publishes, the state election and list mechanics are binding immediately, and states that have opted in can move quickly on their lists before contributions start on January 1. Formation work that does not depend on the rule text, such as the 501(c)(3), state registration, and board and conflict-of-interest policies, can be finished now. Our free [SGO Builder](https://eftccredit.com/build) walks through each step, and we will publish a plain-English read of both rules the day they appear. Update, October 1, 2026: both rules went on public inspection at the Federal Register on October 1 for publication October 2. [Here is our plain-English read](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026). Sources: - Reginfo.gov: EO 12866 review search, RIN 1545-BS17 (received 09/10/2026, Concluded 09/29/2026, Consistent with Change): https://www.reginfo.gov/public/do/eoAdvancedSearch?rin=1545-BS17&eoStatusCode=&_action=Search - Reginfo.gov: EO 12866 review search, RIN 1545-BR97 (received 09/10/2026, Concluded 09/29/2026, Consistent with Change): https://www.reginfo.gov/public/do/eoAdvancedSearch?rin=1545-BR97&eoStatusCode=&_action=Search - Reginfo.gov: EO 12866 meeting log, RIN 1545-BS17 (four meetings): https://www.reginfo.gov/public/do/eom12866SearchResults?pubId=202510&rin=1545-BS17&viewRule=true - Reginfo.gov: EO 12866 meeting log, RIN 1545-BR97 (five meetings): https://www.reginfo.gov/public/do/eom12866SearchResults?pubId=202510&rin=1545-BR97&viewRule=true - Reginfo.gov: EO 12866 meeting, RIN 1545-BS17, September 25, 2026, 10:00 AM, Disability and special education organizations (documents filed): https://www.reginfo.gov/public/do/viewEO12866Meeting?viewRule=true&rin=1545-BS17&meetingId=1543473&acronym=1545-TREAS/IRS - Reginfo.gov: EO 12866 meeting, RIN 1545-BS17, September 25, 2026, 11:30 AM, National Association of Education Foundations: https://www.reginfo.gov/public/do/viewEO12866Meeting?viewRule=true&rin=1545-BS17&meetingId=1543273&acronym=1545-TREAS/IRS - Reginfo.gov: EO 12866 meeting, RIN 1545-BS17, September 29, 2026, 10:00 AM, NAACP Legal Defense Fund: https://www.reginfo.gov/public/do/viewEO12866Meeting?viewRule=true&rin=1545-BS17&meetingId=1541524&acronym=1545-TREAS/IRS - Reginfo.gov: EO 12866 meeting, RIN 1545-BR97, September 29, 2026, 10:30 AM, Advancement Project: https://www.reginfo.gov/public/do/viewEO12866Meeting?viewRule=true&rin=1545-BR97&meetingId=1545823&acronym=1545-TREAS/IRS - Federal Register: public inspection desk: https://www.federalregister.gov/public-inspection/current - Executive Order 12866, Regulatory Planning and Review: https://www.archives.gov/files/federal-register/executive-orders/pdf/12866.pdf Canonical: https://eftccredit.com/news/25f-rules-clear-oira-white-house-review-concluded-september-2026 ### A Kentucky public school district signed an agreement with an SGO so its own students can get §25F scholarships Date: 2026-09-24. Category: state-action. State: KY. Update, October 1, 2026: the regulations released October 1 leave the expense list to separate section 530 guidance that Treasury calls a high priority, so the covered expenses listed above are still pending. The proposed rules also make anyone who takes part in selecting scholarship recipients, and that person's family, disqualified persons who cannot receive scholarships, which bears on agreements like Russell County's, where the district recommends recipients. [How the disqualified-person rule works](https://eftccredit.com/news/5000-and-2-percent-25f-disqualified-persons-scholarship-rules-october-2026). A Kentucky public school district has formally signed on to the federal Education Freedom Tax Credit (§25F). According to reporting by Denise Shoulders in the News-Democrat & Leader, published September 24, the Logan County Schools board approved a memorandum of understanding with the Kentucky Education Fund to take part in Kentucky's Scholarship Granting Organization program. The fund, which [Secretary of State Michael Adams's office approved in August](https://eftccredit.com/news/kentucky-education-fund-approved-sgo-public-private-homeschool-september-2026), will serve as the independent administrator for the district, so Logan County can participate without running an SGO of its own. The agreement is aimed at the district's own students. The paper lists the expenses that may be covered for public-school students, pending final federal guidance: instructional materials, fees, tutoring, academic testing, dual-enrollment costs, technology, and educational therapies for students with disabilities. Superintendent Dan Costellow framed the decision as a matter of stewardship: "One of our responsibilities is to look for every appropriate opportunity to bring additional resources to Logan County Schools and support our students without placing unnecessary costs on the district." He added that "this partnership gives us another way to connect outside funding with the needs of individual students and families," and that "good stewardship means not only managing the resources we already have responsibly, but also seeking new resources that can benefit our schools and our community." The structure is the part other districts will want to study. A school district is a unit of government, not a 501(c)(3) public charity, so it cannot be an SGO itself. It can work through an organization that is one, and that is what Logan County did. The statute makes this workable because a §25F scholarship follows the student, not the school. An eligible student is one whose household income does not exceed 300% of area median gross income and who is eligible to enroll in a public elementary or secondary school, and [qualified expenses](https://eftccredit.com/learn/qualified-expenses-25f) borrow the Coverdell list, which covers tutoring, books, computer equipment, and special-needs services alongside tuition. Our guide to [what §25F allows for public-school students](https://eftccredit.com/learn/eftc-for-public-schools) walks through it. This is the pitch the Kentucky Education Fund has been making since it launched. Its adviser, Will Hodges, a former superintendent, told Kentucky Public Radio in a story published September 21 that the question for donors comes down to whether they "want to send their tax dollars to Washington D.C. or do they want to send it to their local school," and the fund is [one of eight organizations that have declared SGO intent in Kentucky](https://eftccredit.com/news/kentucky-eight-groups-declare-sgo-intent-public-special-education-september-2026). Logan County's agreement puts that pitch into a signed document. It comes in a state that joined the program when the legislature overrode Gov. Andy Beshear's veto of House Bill 1, whose opponents argued it would pull money away from public schools. Two cautions. First, the list of covered expenses is explicitly subject to federal guidance, and the rules that will settle how far non-tuition expenses can go are [still under White House review](https://eftccredit.com/news/25f-rules-reach-oira-interim-final-temporary-regs-september-2026). Second, nothing flows until donations begin on January 1, 2027. A donor can claim a credit of up to $1,700, and a credit larger than the donor's tax liability can be carried forward for up to five years. How much reaches Logan County students will depend on how many donors choose the fund and direct their giving toward the district. Logan County is not alone. At its September 21 meeting, the Russell County Board of Education approved a one-year memorandum of understanding with the same Kentucky Education Fund, according to a summary of the board's recorded meeting. The division of labor matches: the fund runs the donation portal, applications, and reporting, while the district verifies student eligibility and recommends recipients. The fund may keep up to 10% of donations for administration and expects to use about 8.5% in its first year, and the agreement renews each year unless either side ends it in writing. Two districts in one week, working through the same statewide SGO, suggests the partnership model is becoming the default route for Kentucky public schools. For a Kentucky district weighing the same move, the options are a partnership like this one or a district education foundation that files its own SGO declaration with the Secretary of State before the list goes to Treasury on January 1. Track the state on our [Kentucky page](https://eftccredit.com/states/kentucky), see who else is forming in the [SGO directory](https://eftccredit.com/sgos), and if a foundation is the route, work through formation with the [free SGO builder](https://eftccredit.com/build). Sources: - News-Democrat & Leader: Logan County Board approves agreement for SGO tax-credit program (Denise Shoulders, Sept. 24, 2026): https://www.franklinfavorite.com/russellville/russellville/news/article_c7df92f8-6d5b-5def-bdb6-417eeb5fcfca.html - Russell County Board of Education meeting, Sept. 21, 2026 (Citizen Portal summary of the recorded meeting): https://citizenportal.ai/articles/10173988/Kentucky/Russell-County/Jamestown/Board-approves-memorandum-with-Kentucky-Education-Fund-to-accept-scholarship-donations - Russell County Board of Education: Sept. 21, 2026 meeting video: https://www.youtube.com/watch?v=y5eNEV5Zano - Kentucky Lantern: Kentucky groups apply to get new scholarship tax credit. Who will benefit? (Sept. 22, 2026): https://kentuckylantern.com/2026/09/22/kentucky-groups-apply-to-get-new-scholarship-tax-credit-who-will-benefit/ - Kentucky Education Fund: https://www.kyeducationfund.org/ - Kentucky Legislative Research Commission: HB 1 (2026 RS) bill record: https://apps.legislature.ky.gov/record/26RS/hb1.html - 26 U.S.C. §25F (federal Education Freedom Tax Credit): https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/kentucky-logan-county-schools-sgo-agreement-kentucky-education-fund-september-2026 ### The superintendents' association booked a White House meeting on the §25F rules. So did an attorney who forms SGOs. Date: 2026-09-22. Category: regulatory. Update, October 1, 2026: the regulations released October 1 address all three requests in the July letter described above. Under the proposed rules, an SGO whose activities are at least 85% scholarship granting may measure the 90% test against its §25F account instead of all its receipts; under the temporary rules, a state may list an organization whose 501(c)(3) application is still pending if it meets set conditions; and the scope of qualified expenses was left to separate section 530 guidance. [How the 85% safe harbor works](https://eftccredit.com/news/85-percent-safe-harbor-how-sgos-meet-90-percent-rule-25f-october-2026). When Treasury sent the §25F regulations to the White House on September 10, we pointed out that [a short window had opened](https://eftccredit.com/news/25f-rules-reach-oira-interim-final-temporary-regs-september-2026). While a rule sits at OIRA, the Office of Information and Regulatory Affairs, Executive Order 12866 lets any member of the public ask for a meeting about it, and the Treasury staff drafting the rule ordinarily attend. On September 11 the meeting log showed no requests on either §25F rule. It now shows two, both on [RIN 1545-BR97](https://www.reginfo.gov/public/do/eoDetails?rrid=1527868), the proposed rule covering enforcement, recordkeeping, and reporting for Scholarship Granting Organizations. The first is set for September 25 at 3:00 p.m. The requestor is listed as Christian Matozzo, with no organization named. An attorney of that name at Brown & Streza, a law firm that represents religious nonprofits, describes his practice as including the formation and operation of scholarship granting organizations, and says he is "working to form and qualify scholarship granting organizations under the provisions of both the Education Freedom Tax Credit and relevant state tax credit laws." The OIRA record does not say whom he is appearing for. The second is set for September 28 at 2:00 p.m., requested by AASA, The School Superintendents Association, with Sasha Pudelski, its director of advocacy, as the contact. AASA refers to the credit as a "voucher program" in its own advocacy, and it has spent the year working on how the program will run. Last winter it filed comments asking Treasury to leave states broad discretion over the design. On July 30 it led [a thirteen-organization letter to Treasury](https://eftccredit.com/news/public-school-coalition-treasury-letter-90-percent-rule-july-2026) asking that the 90% spending test be measured against an SGO's segregated §25F account rather than its total receipts, that states be allowed to list an organization while its 501(c)(3) application is pending, and that qualified expenses be read broadly enough to cover afterschool, summer, and tutoring programs. AASA has also run a webinar series for district leaders under the title "Leveraging the Federal Scholarship Tax Credit." The meeting record does not list a topic, so what the association plans to raise on September 28 is not public, but that letter is the most recent statement of what it wants from these rules. Both meetings are about BR97, not the companion rule, RIN 1545-BS17. BS17 is the one filed as an interim final rule, covering state elections and the SGO lists states submit this fall, and it binds the day it publishes. BR97 was filed as an ordinary proposed rule, so a formal comment period will follow its publication in any case. A meeting now is a chance to be heard before the draft goes public rather than after. Some caution about reading too much into a calendar entry. A meeting request is not a position, and OIRA meetings are routine for rules this size. The attendee list and any materials handed over are posted on reginfo.gov after the meeting, and that record, not the booking, will show what each side asked for. Neither review has concluded, and nothing about the rules is final until they appear in the Federal Register. Treasury has said it expects the proposed regulations by the end of September. The request that stands out is AASA's. The superintendents' association is taking its requests directly to the people drafting the rule, which is the same direction we saw when [a Kentucky SGO built by regional development districts said it would fund public-school students](https://eftccredit.com/news/kentucky-education-fund-approved-sgo-public-private-homeschool-september-2026). The statute allows it: eligibility follows the student's household income, not the school the student attends, and [qualified expenses](https://eftccredit.com/learn/qualified-expenses-25f) include tutoring, special-needs services, and technology. How the final rules treat those expenses and the 90% test will decide how practical a public-school SGO is. For more on how the credit can reach public-school families, see our [guide for public schools](https://eftccredit.com/learn/eftc-for-public-schools). If you already run a nonprofit and are weighing whether to add an SGO, read [converting an existing nonprofit](https://eftccredit.com/learn/existing-nonprofit-to-sgo), and see who is already organizing in the [SGO directory](https://eftccredit.com/sgos). We will report what the meeting records show once they post. Update, September 30, 2026: the meeting log now lists four more requestors: a disability and special education coalition, the National Association of Education Foundations, the NAACP Legal Defense Fund, and the Advancement Project. OIRA concluded review of both rules on September 29. [Details here](https://eftccredit.com/news/25f-rules-clear-oira-white-house-review-concluded-september-2026). Sources: - Reginfo.gov: EO 12866 meeting, RIN 1545-BR97, September 28, 2026, 2:00 PM, requestor AASA, The School Superintendents Association (Sasha Pudelski): https://www.reginfo.gov/public/do/viewEO12866Meeting?viewRule=false&rin=1545-BR97&meetingId=1541173&acronym=1545-TREAS/IRS - Reginfo.gov: EO 12866 meeting, RIN 1545-BR97, September 25, 2026, 3:00 PM, requestor Christian Matozzo: https://www.reginfo.gov/public/do/viewEO12866Meeting?viewRule=false&rin=1545-BR97&meetingId=1543324&acronym=1545-TREAS/IRS - Reginfo.gov: EO 12866 meeting log, RIN 1545-BR97: https://www.reginfo.gov/public/do/eom12866SearchResults?rin=1545-BR97 - Reginfo.gov: OIRA review detail for RIN 1545-BR97 (received 09/10/2026, Stage: Proposed Rule, Pending Review): https://www.reginfo.gov/public/do/eoDetails?rrid=1527868 - Brown & Streza LLP: Christian J. Matozzo, attorney (scholarship granting organization practice): https://www.brownandstreza.com/team/christian-j-matozzo/ - AASA: Sasha Pudelski, Director of Advocacy: https://www.aasa.org/about-aasa/person/sasha-pudelski - AASA: Leveraging the Federal Scholarship Tax Credit, webinar series for school districts (July and August 2026): https://www.aasa.org/professional-learning/event/2026/07/22/default-calendar/leveraging-the-new-federal-scholarship-tax-credit--possibilities---challenges-for-districts - AASA and 12 co-signing organizations: Letter to Treasury on Federal Scholarship Tax Credit regulations and guidance (July 30, 2026): https://www.aasa.org/docs/default-source/advocacy/july-30-letter-to-treasury-on-federal-scholarship-tax-credit-regulations-guidance.pdf - AASA: AASA Comments on Treasury's Approach to Federal Tax Credit Voucher Program (Sasha Pudelski, Jan. 12, 2026): https://www.aasa.org/resources/blog/aasa-comments-on-treasury-s-approach-to-federal-tax-credit-voucher-program Canonical: https://eftccredit.com/news/superintendents-sgo-attorney-oira-meetings-25f-proposed-rule-september-2026 ### Eight groups have filed to be SGOs in Kentucky. Two say they will serve public-school students, one of them for kids with disabilities. Date: 2026-09-21. Category: state-action. State: KY. Update, October 1, 2026: the regulations released October 1 leave non-tuition expenses to separate section 530 guidance that Treasury calls a high priority, so how far a special-education scholarship can go is still open. The proposed rules do add a shortcut for this kind of program: students a school selects on need for individual tutoring or special-needs services, at a school in a HUD qualified census tract or one where at least 80% of students live in such a tract, count as meeting the income test without a household income check, if the SGO gets an annual third-party audit and gives it to the state. [How the income rules work](https://eftccredit.com/news/96-percent-children-eligible-25f-scholarships-income-rules-october-2026). Kentucky was [the first state to open an SGO sign-up](https://eftccredit.com/news/kentucky-adams-files-federal-25f-opens-sgo-declaration-july-2026), in July, and it now has the first real field of applicants. According to reporting by Sylvia Goodman of Kentucky Public Radio, published September 21 and carried by the Kentucky Lantern, eight organizations have declared to Secretary of State Michael Adams that they intend to be Scholarship Granting Organizations under the federal Education Freedom Tax Credit (§25F). Kentucky's first list goes to Treasury by January 1, 2027, the day donations start earning the credit. Here is who has filed. The Catholic Education Foundation, a long-established Louisville nonprofit. The Southeastern Kentucky Faith-Based Scholarship Fund, newly incorporated. The Kentucky Education Fund, the statewide fund led by the directors of Kentucky's 15 Area Development Districts, [which we covered last week](https://eftccredit.com/news/kentucky-education-fund-approved-sgo-public-private-homeschool-september-2026). Special Education Lifeline, a Greenup County nonprofit formed in 2024. KCEOC Community Action Partnership, a southeastern Kentucky community action agency whose president, Paul Dole, signed the SGO paperwork but was not available to comment. And two out-of-state organizations setting up Kentucky-specific scholarship funds. By the reporters' count, five of the eight are set up around private and religious education. The two that stand out are the ones planning to serve public-school families. Will Hodges, a former public school superintendent and teacher who leads the Kentucky Education Fund, put the pitch in terms any donor understands: "It really comes down to a matter: do those employees want to send their tax dollars to Washington D.C. or do they want to send it to their local school? Most people are going to choose to send it to their local school." He also addressed the worry that donations will pool in wealthier areas: "We feel confident with our model that we'll be able to raise funds in the rural areas as well through marketing and advertising." Special Education Lifeline is the more specific case. Its president, Angela Pannuti, is a public school parent, and she described why the group filed: "We wanted to make sure that our kids in this area, if somebody wanted to donate, that we could also get the funds in an area that we know needs it." And on who that means: "At the center of it is children with disabilities and the families that are navigating that. And by and large that occurs in the public school." That is permitted by the statute. A §25F scholarship follows the student, not the school. Eligibility turns on household income, up to 300% of area median gross income, and on the student being eligible to enroll in a public school, and [qualified expenses](https://eftccredit.com/learn/qualified-expenses-25f) borrow the Coverdell list, which includes special-needs services, tutoring, and educational technology. Our guide to [§25F and students with special needs](https://eftccredit.com/learn/ecca-special-needs) covers how that works. Some perspective on where this sits. Kentucky joined the program when the legislature overrode Gov. Andy Beshear's veto of HB 1, and [routed the SGO registry through the Secretary of State](https://eftccredit.com/news/kentucky-sgo-registry-secretary-of-state-adams-hb1-march-2026). A declaration is a state filing. Federal requirements for SGOs are in [the regulations now under White House review](https://eftccredit.com/news/25f-rules-reach-oira-interim-final-temporary-regs-september-2026), and how those rules treat non-tuition expenses will decide how much a special-education or public-school scholarship can actually pay for. Eight is also a small number for a state this size, and nothing prevents more from filing before the list is due. For a Kentucky nonprofit, the door is still open: a 501(c)(3) public charity can file its SGO declaration with the Secretary of State and be included on the list sent to Treasury by January 1. Track the state on our [Kentucky page](https://eftccredit.com/states/kentucky), see who else is forming in the [SGO directory](https://eftccredit.com/sgos), and work through formation with the [free SGO builder](https://eftccredit.com/build). If you run an existing nonprofit, start with [converting an existing nonprofit to an SGO](https://eftccredit.com/learn/existing-nonprofit-to-sgo). Update, September 24, 2026: Logan County Schools has signed a memorandum of understanding with the Kentucky Education Fund so its public-school students can receive these scholarships. [Here is what the district agreed to](https://eftccredit.com/news/kentucky-logan-county-schools-sgo-agreement-kentucky-education-fund-september-2026). Sources: - Kentucky Lantern: Kentucky groups apply to get new scholarship tax credit. Who will benefit? (Sept. 22, 2026): https://kentuckylantern.com/2026/09/22/kentucky-groups-apply-to-get-new-scholarship-tax-credit-who-will-benefit/ - WEKU / Kentucky Public Radio: Kentucky groups apply to get new scholarship tax credit (Sylvia Goodman, Sept. 21, 2026): https://www.weku.org/the-commonwealth/2026-09-21/kentucky-groups-apply-to-get-new-scholarship-tax-credit-who-will-benefit - Kentucky Secretary of State: Adams enables Kentucky families to benefit from federal education tax credit (SGO declaration process): https://www.kentucky.gov/Pages/Activity-stream.aspx?n=SOS&prId=566 - KRS 14.125: Federal qualified elementary and secondary education scholarship tax credit (Secretary of State as sole official): https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=57167 - 26 U.S.C. §25F (federal Education Freedom Tax Credit): https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/kentucky-eight-groups-declare-sgo-intent-public-special-education-september-2026 ### Kentucky approved a statewide SGO founded by its Area Development Districts, and it says it will fund public-school students too Date: 2026-09-15. Category: state-action. State: KY. Update, October 1, 2026: the regulations released October 1 did not settle what a public-school or home-based scholarship can pay for. The proposed rules define a school by the section 530 standard, one providing K-12 education as determined under state law, and leave the expense list to separate section 530 guidance that Treasury calls a high priority; they do require tuition and fees a school charges to be paid directly to the school, and other providers paid directly to be verified and unrelated to the student. [How scholarship money can be paid](https://eftccredit.com/news/four-ways-to-pay-25f-scholarship-money-schools-vendors-digital-wallets-october-2026). In July, Kentucky became [the first state to open an SGO sign-up](https://eftccredit.com/news/kentucky-adams-files-federal-25f-opens-sgo-declaration-july-2026), when Secretary of State Michael Adams filed the federal election and signed the regulation setting out how the state accepts SGO filings. Kentucky now has an approved organization to show for it. According to reporting by the Kentucky Lantern, Adams's office approved the Kentucky Education Fund as a Kentucky Scholarship Granting Organization on August 27, after the fund received its federal nonprofit recognition in July. Who built it is the notable part. The fund's founding body is the leadership of Kentucky's Area Development Districts, the regional planning and development organizations that together cover all 120 counties, and it describes itself as "a statewide, nonpartisan option for administering qualifying contributions and scholarships under the new program." Senate President Pro Tem David Givens, a Greensburg Republican, called having the district leaders serve as the founding body "a natural extension of that work, bringing together regional knowledge, trusted partnerships and a shared commitment to creating greater opportunities for all Kentuckians." Its adviser, Will Hodges, is a former superintendent of Green County Schools, and he said the districts "brought regional knowledge from every part of Kentucky to the Fund's formation, helping ensure that statewide reach was part of the conversation from the beginning." The second notable part is who it plans to serve. The fund says scholarship recipients may be "attending public or private schools" or "receiving a home-based education, provided the student and scholarship expense satisfy applicable federal requirements and Fund policies." That is exactly what the statute allows, and it is not how the credit is usually described. §25F defines an eligible student by household income and by being eligible to enroll in a public elementary or secondary school, not by where the student actually enrolls. It defines qualified expenses by reference to the Coverdell list in section 530(b)(3)(A), which covers tuition but also tutoring, special-needs services, books, and computer equipment. We walk through that in [what §25F allows for public-school students](https://eftccredit.com/learn/eftc-for-public-schools) and in the [qualified expenses guide](https://eftccredit.com/learn/qualified-expenses-25f). That matters in a state that joined the program over its governor's objection. Gov. Andy Beshear vetoed House Bill 1 in March, saying that "public dollars should not go to private schools," and the legislature [overrode him and routed the SGO registry through the Secretary of State](https://eftccredit.com/news/kentucky-sgo-registry-secretary-of-state-adams-hb1-march-2026). The approval that registry has now produced is not a private-school network. It is a statewide fund built by regional bodies that serve every county, advised by a public-school superintendent, offering scholarships to public-school families along with everyone else. Donations can begin January 1, 2027, the day the credit takes effect, and donors can claim up to $1,700. Two cautions for anyone reading this as a template. First, a Kentucky approval is a state step. Kentucky's list goes to the federal government by January 1, and the federal rules for what an SGO must do are in [the regulations now under White House review](https://eftccredit.com/news/25f-rules-reach-oira-interim-final-temporary-regs-september-2026). How those rules treat non-tuition expenses will decide how much a public-school scholarship can practically pay for. Second, the fund's own language puts the same condition on every category of student, that "the student and scholarship expense satisfy applicable federal requirements." A public-school program is allowed. The details of running one are still being written. For a Kentucky nonprofit, the path is open now: a 501(c)(3) public charity can file its declaration with the Secretary of State and be on the list submitted by January 1. Track the state on our [Kentucky page](https://eftccredit.com/states/kentucky), see who else is forming in the [SGO directory](https://eftccredit.com/sgos), and work through formation with the [free SGO builder](https://eftccredit.com/build). Homeschool families can read how the credit applies to them in our [homeschool and microschool guide](https://eftccredit.com/learn/ecca-homeschool-microschool). Update, September 21, 2026: the Kentucky Education Fund is one of eight organizations that have now declared to the Secretary of State that they intend to be SGOs, including a Greenup County special-education nonprofit that also plans to serve public-school students. [Here is the full list](https://eftccredit.com/news/kentucky-eight-groups-declare-sgo-intent-public-special-education-september-2026). Sources: - Kentucky Lantern via LINK nky: Kentucky Education Fund approved to administer federal tax credit scholarships (McKenna Horsley, Sept. 8, 2026): https://linknky.com/news/2026/09/10/kentucky-education-fund-federal-tax-credit-scholarships/ - WKYT: Kentucky Education Fund scholarship program moves forward (Sept. 8, 2026): https://www.wkyt.com/2026/09/08/kentucky-education-fund-scholarship-program-moves-forward/ - Kentucky Education Fund: https://www.kyeducationfund.org/ - Kentucky Legislative Research Commission: HB 1 (2026 RS) bill record: https://apps.legislature.ky.gov/record/26RS/hb1.html - 26 U.S.C. §25F (federal Education Freedom Tax Credit): https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/kentucky-education-fund-approved-sgo-public-private-homeschool-september-2026 ### Twenty-two §25F states asked the Supreme Court to overrule Locke v. Davey, and the federal government wants ten minutes at the November 3 argument Date: 2026-09-15. Category: federal-action. State: WV. Update, October 5, 2026: on its first order list of the term, the Court granted the Solicitor General's motion to file out of time, to participate in oral argument as amicus curiae, and for divided argument in St. Mary v. Roy, so the United States will have its own time at the lectern on November 3. The order does not state how the time is split. Update, October 2, 2026: Virginia waived its right to respond in the companion petition, Johnson v. Fleming, No. 26-240, on September 23, and on September 30 the Court distributed that petition for its October 16, 2026 conference. The same West Virginia-led brief was filed in that case on September 24. Virginia's response in Hall v. Fleming is due October 14. A waiver does not end a case: the Court can still call for a response before deciding whether to hear it. [Docket, No. 26-240](https://www.supremecourt.gov/docket/docketfiles/html/public/26-240.html). Update, October 1, 2026: Treasury's temporary regulations, released October 1, answer the §25F side of the floor-or-ceiling question. A participating state "may not require SGOs to operate in a manner that is more restrictive than" §25F, "such as by limiting the type of school that scholarship recipients may attend," and must list every qualifying organization located in the state that asks to be included. The constitutional questions in these petitions are unchanged. [How the state rule works](https://eftccredit.com/news/one-national-standard-states-cannot-add-sgo-rules-25f-october-2026). Two weeks ago we wrote that [two petitions were asking the Supreme Court to overrule Locke v. Davey](https://eftccredit.com/news/two-cert-petitions-ask-supreme-court-overrule-locke-v-davey-september-2026), the 2004 decision that lets a state leave religious study out of an education benefit it otherwise funds. On September 14 the first of those petitions, Hall v. Fleming, No. 26-193, drew the filing that usually signals a petition is being taken seriously: a brief from West Virginia and twenty-one other states asking the Court to grant review and overrule Locke outright. "Locke v. Davey is an aberration," the brief opens. "Under it, States can discriminate against religious students by excluding them from scholarship programs." The signatories are West Virginia, Alabama, Alaska, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, South Carolina, South Dakota, Tennessee, Texas, and Utah. Every one of them is on the IRS [§25F participation roster](https://eftccredit.com/states) for 2027. That repeats the pattern we found in August, when [all 21 states backing the Catholic parishes in St. Mary v. Roy turned out to be participating states](https://eftccredit.com/news/state-ags-split-st-mary-roy-briefs-track-25f-roster-august-2026). The two coalitions are not identical. Indiana, Mississippi, Ohio, and Tennessee signed in Hall but not in St. Mary; Kentucky, Oklahoma, and Wyoming signed in St. Mary but not here. Counting both briefs, 25 of the 30 participating states have now told the Court that states should not be able to use religion to narrow a benefit program. The five that signed neither are Colorado, Nevada, New Hampshire, North Carolina, and Virginia, and Virginia is the state being sued. The brief's most practical argument is about administration, not doctrine. Under the heading "Locke is causing concrete harm to the States," the attorneys general describe a catch-22. A state that excludes religious degrees has to decide which programs are too religious to fund, which the Court has repeatedly warned is an entangling inquiry. A state that funds them anyway invites Establishment Clause suits from the other direction, and a lower court's blessing of the exclusion gives those plaintiffs something to cite. The brief's example is Virginia's own program, which it says funds a religious studies degree at one university while denying a pastoral leadership degree at another. The same day brought a wave of private briefs supporting review, including from The Heritage Foundation, the American Center for Law and Justice, the Christian Legal Society and National Association of Evangelicals, Samaritan's Purse and the Billy Graham Evangelistic Association, the Notre Dame Education Law Project with the Union of Orthodox Jewish Congregations of America, the Jewish Coalition for Religious Liberty, and the Council for Christian Colleges & Universities. The Association of Christian Schools International and the American Association of Christian Schools, both K-12 school associations, had filed jointly on September 11. Virginia's response is due October 14. There is also a third petition, which our September 1 post did not include. Johnson v. Fleming, No. 26-240, filed August 20 by Alliance Defending Freedom, involves three Liberty University students who say Virginia funds some religious degrees at their school while denying funding for theirs, under both the Virginia Tuition Assistance Grant and the Virginia National Guard State Tuition Assistance Program. It asks for certiorari before judgment, meaning review before the Fourth Circuit has ruled, and it asks the same two questions: whether a state may fund some religious degrees and not similar ones, and whether the Court should overrule Locke. Virginia's response is due September 24. Meanwhile the case the Court has already agreed to hear gained a new participant. On August 31 the Solicitor General asked for leave to argue as amicus curiae in St. Mary Catholic Parish v. Roy, No. 25-581, proposing that the hour be split 20 minutes for the parishes, 10 for the United States, and 30 for Colorado. The United States had already filed at both stages, and its merits brief argues that Colorado's universal preschool program is subject to strict scrutiny and violates the Free Exercise Clause. The motion came a week after the deadline, and the government says so plainly: it "regrets that oversight and does not lightly make this request out of time." The parishes consented. As of today the Court has not acted on it. None of these filings mentions §25F, and it is worth saying precisely why they still matter to anyone building a scholarship organization. The federal statute does not tell a state to include or exclude religious schools. It asks a participating state to submit a list of qualifying organizations under §25F(g), and it sets the organizational tests itself. Whether a state can add conditions of its own when it builds that list is the open question we have tracked as [federal floor or federal ceiling](https://eftccredit.com/news/federal-floor-or-ceiling-25f-state-restrictions-june-2026), and Locke is the strongest precedent a state would have for a religion-based condition. What these briefs show is that the states actually running §25F in 2027 are, almost without exception, on record against giving themselves that power. The honest caveat is the same as two weeks ago. Most cert petitions are denied, and a large amicus showing improves the odds without guaranteeing anything. The likeliest sequence is still that [St. Mary is argued on November 3](https://eftccredit.com/news/supreme-court-november-3-argument-state-conditions-religious-schools-25f-august-2026) and decided by the end of June 2027, and that the Locke petitions are held until then. For an organization forming now, nothing here changes a federal requirement: 501(c)(3) public-charity status, a separate account for contributions, at least 90% of income to scholarships, and scholarships for at least ten students who do not all attend the same school. Work through those with the [free SGO builder](https://eftccredit.com/build) and follow your state on the [participation map](https://eftccredit.com/states). Sources: - Supreme Court docket, Hall v. Fleming, No. 26-193 (States' amicus brief submitted Sept. 14, 2026): https://www.supremecourt.gov/docket/docketfiles/html/public/26-193.html - Brief of Amici Curiae State of West Virginia and 21 Other States in Support of Petitioner, Hall v. Fleming (Sept. 14, 2026): https://www.supremecourt.gov/DocketPDF/26/26-193/424045/20260914112550697_Hall%20v%20Fleming%20No.%2026-193%20States%20Amicus.pdf - Supreme Court docket, Johnson v. Fleming, No. 26-240: https://www.supremecourt.gov/docket/docketfiles/html/public/26-240.html - Petition for a Writ of Certiorari Before Judgment, Johnson v. Fleming (filed Aug. 20, 2026): https://www.supremecourt.gov/DocketPDF/26/26-240/419602/20260820123857096_USSC%20Petition%20for%20Writ%20of%20Certiorari%20Before%20Judgment.pdf - Motion of the United States for Leave to Participate in Oral Argument as Amicus Curiae and for Divided Argument, St. Mary Catholic Parish v. Roy, No. 25-581 (Aug. 31, 2026): https://www.supremecourt.gov/DocketPDF/25/25-581/422584/20260831161709165_St.%20Mary%20Motion%20for%20Divided%20Argument.pdf - Brief for the United States as Amicus Curiae, St. Mary Catholic Parish v. Roy (July 2, 2026): https://www.supremecourt.gov/DocketPDF/25/25-581/415681/20260702225636069_25-581tsacUnitedStates.pdf - IRS: Federal Scholarship Tax Credit (FSTC), list of states electing to participate for 2027: https://www.irs.gov/government-entities/federal-state-local-governments/federal-scholarship-tax-credit-fstc Canonical: https://eftccredit.com/news/22-states-urge-supreme-court-overrule-locke-v-davey-september-2026 ### The §25F rules reached the White House as two rules. The half that opens SGO certification binds the day it publishes. Date: 2026-09-11. Category: regulatory. The rules that decide who can run a Scholarship Granting Organization are written. Treasury sent them to the White House on September 10, 2026. Here is the background that makes that sentence mean something. Before a significant federal rule can publish, it goes for a final review to a small White House office called OIRA, the Office of Information and Regulatory Affairs. That review is the last stop before the Federal Register, and the public listing of what is sitting there is the earliest reliable signal that publication is close. Both §25F rules, [RIN 1545-BS17](https://www.reginfo.gov/public/do/eoDetails?rrid=1527867) and [RIN 1545-BR97](https://www.reginfo.gov/public/do/eoDetails?rrid=1527868), filed together under regulation number REG-117199-25, were received there on September 10 and are listed as pending review. In July we read Treasury’s own regulatory agenda and reported that [the startup rules looked set to arrive already binding](https://eftccredit.com/news/treasury-unified-agenda-25f-interim-final-rule-sgo-lists-fall-2026), and we said the label those rules carried when they reached OIRA would settle the question. They have reached OIRA. Each one carries a label, and the two labels are not the same. The split is the story. RIN 1545-BS17, the temporary regulations, is filed at the interim final rule stage. An interim final rule is legally binding the day it publishes, with comments collected afterward, once states and SGOs are already operating under it. That is the half covering the startup mechanics: how a state makes its election, how it submits its list of approved SGOs this fall, and what contributions an SGO must begin tracking on January 1, 2027. RIN 1545-BR97 is filed at the ordinary proposed rule stage. A proposed rule is a draft that binds nobody until the agency has taken comments, answered them, and issued a final version, and this one carries the fuller rulebook: enforcement of the SGO requirements, recordkeeping, and information reporting. So the honest answer to “will there be a comment period” is that it depends which rules you mean. On the rules that determine whether your state can certify you this fall, no, not before they take effect. On the rules that determine what you must do once certified, yes. Two caveats, stated plainly, because a rule at OIRA is not a published rule. Review can change a rule’s text and occasionally its instrument, so Treasury could still emerge with something different from what it filed, and none of this is law until it appears in the Federal Register. Review also has no fixed length: Executive Order 12866 allows OIRA up to 90 days, extendable, and some reviews conclude in days. “Weeks rather than months” is a reasonable read of the situation, not a schedule anyone has published. One fact did firm up in the filing. OIRA has flagged both rules economically significant, the government’s own term for a rule with an annual effect of at least $100 million, where Treasury’s agenda entries had left that field undetermined. And one fact has not moved at all: the credit is available for contributions made on or after January 1, 2027, and not a day earlier. So what can anyone actually do in the weeks before the startup rules bind? One door is open right now that was shut in July, and it closes again the moment OIRA concludes its review. While a rule sits at OIRA, Executive Order 12866 gives any affected member of the public the right to request a meeting about it. Not just lawyers and lobbyists: a scholarship organization, a school association, a state agency, a CPA with clients who will claim this credit. You submit a short form on reginfo.gov naming the RIN and your topic, OIRA schedules a call, and the Treasury attorneys drafting the rule ordinarily attend. You do not get to see the draft. You get roughly half an hour to explain what breaks if the text reads a particular way, plus a memo that lands in front of the people writing it, and the attendee list and materials are published afterward. As of September 11, 2026, the meeting log shows zero requests on [1545-BS17](https://www.reginfo.gov/public/do/eom12866SearchResults?pubId=202510&rin=1545-BS17&viewRule=true) and zero on [1545-BR97](https://www.reginfo.gov/public/do/eom12866SearchResults?pubId=202510&rin=1545-BR97&viewRule=true). The request forms are live: [one for the temporary regulations](https://www.reginfo.gov/public/do/eo/neweomeeting?rin=1545-BS17), [one for the proposed regulations](https://www.reginfo.gov/public/do/eo/neweomeeting?rin=1545-BR97). A concrete example of the kind of question worth raising: [§25F](https://eftccredit.com/documents/section-25f) requires an SGO to spend at least 90 percent of its income on scholarships, and the statute never says how that is measured for an organization in its first year, when contributions arrive in December and scholarships go out the following spring. That is cheap to answer in the text now and expensive to fix afterward. We check the OIRA listing every day and will report when either review concludes, because the conclusion action recorded there tells you whether the rule cleared as filed or went back for changes. If you are building an SGO, the planning assumption should now be that the certification rules land with little warning and already in force, which is close to the opposite of the draft-then-comment autumn most people penciled in. Be ready before they publish rather than after. Start with our [guide to starting an SGO](https://eftccredit.com/learn/how-to-start-an-sgo), check where your state stands on the [participation map](https://eftccredit.com/states), and see who is already organizing in the [SGO directory](https://eftccredit.com/sgos). Update, September 22, 2026: the meeting log is no longer empty. Two EO 12866 meetings are now scheduled on RIN 1545-BR97, one on September 25 requested by an attorney whose practice includes forming SGOs and one on September 28 requested by AASA, The School Superintendents Association. [Our write-up covers who asked and what AASA has told Treasury before](https://eftccredit.com/news/superintendents-sgo-attorney-oira-meetings-25f-proposed-rule-september-2026). BS17 still shows no meeting requests. Update, September 30, 2026: OIRA concluded its review of both rules on September 29, marked "Consistent with Change." Neither has published yet. [Our write-up covers what that means and the nine meetings logged before review closed](https://eftccredit.com/news/25f-rules-clear-oira-white-house-review-concluded-september-2026). Update, October 1, 2026: both rules were released October 1 in the form they were filed: temporary regulations (T.D. 10057, RIN 1545-BS17) that apply without a prior comment period, and a proposed rule (REG-117199-25, RIN 1545-BR97) open for comment until December 1. [Our read of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026). Sources: - Reginfo.gov, OIRA review detail for RIN 1545-BS17 (TREAS/IRS): received 09/10/2026, Pending Review, Stage: Interim Final Rule, Economically Significant: Yes, Legal Deadline: None: https://www.reginfo.gov/public/do/eoDetails?rrid=1527867 - Reginfo.gov, OIRA review detail for RIN 1545-BR97 (TREAS/IRS): received 09/10/2026, Pending Review, Stage: Proposed Rule, Economically Significant: Yes, Legal Deadline: None: https://www.reginfo.gov/public/do/eoDetails?rrid=1527868 - Reginfo.gov: EO 12866 review search, RIN 1545-BS17 (one record, received 09/10/2026): https://www.reginfo.gov/public/do/eoAdvancedSearch?rin=1545-BS17&eoStatusCode=&_action=Search - Reginfo.gov: EO 12866 review search, RIN 1545-BR97 (one record, received 09/10/2026): https://www.reginfo.gov/public/do/eoAdvancedSearch?rin=1545-BR97&eoStatusCode=&_action=Search - Reginfo.gov: EO 12866 meeting log, RIN 1545-BS17 (zero records as of September 11, 2026): https://www.reginfo.gov/public/do/eom12866SearchResults?pubId=202510&rin=1545-BS17&viewRule=true - Reginfo.gov: EO 12866 meeting log, RIN 1545-BR97 (zero records as of September 11, 2026): https://www.reginfo.gov/public/do/eom12866SearchResults?pubId=202510&rin=1545-BR97&viewRule=true - Our archive: both Unified Agenda entries for REG-117199-25, reproduced field for field, with the OIRA review record: /documents/unified-agenda-25f-rin-entries - U.S. Treasury: Preview of Forthcoming Section 25F Guidance (proposed regulations expected by end of September 2026): https://home.treasury.gov/system/files/136/Preview-of-Forthcoming-Guidance.pdf - Executive Order 12866, §6(b): OIRA review periods and the public's right to request a meeting on a rule under review: https://www.archives.gov/files/federal-register/executive-orders/pdf/12866.pdf - 26 U.S.C. §25F(h), regulations and guidance authority: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/25f-rules-reach-oira-interim-final-temporary-regs-september-2026 ### 121.5 million taxpayers can claim the §25F credit in 2027, and more than 100 million can use all $1,700 Date: 2026-09-09. Category: analysis. Update, October 1, 2026: Treasury's proposed regulations answer the joint-return question AFC left open. Spouses filing jointly are treated as separate taxpayers, so a married couple can claim up to $3,400 when each spouse gives $1,700, limited by the couple's tax liability, and taxpayers may rely on the rule for 2027 contributions. AFC's totals assume $1,700 per return, so for joint filers they sit below what the rules now allow. [How the $3,400 rule works](https://eftccredit.com/news/married-couples-3400-25f-credit-joint-return-proposed-rule-october-2026). In July the American Federation for Children published the first estimate of [how many students can receive a §25F scholarship](https://eftccredit.com/news/afc-51-7-million-students-eligible-25f-first-state-estimates-july-2026): 51.7 million. That number describes demand. On September 9 the same analyst, AFC Growth Fund senior fellow Patrick Graff, published the other side of the ledger in a report titled ["Who Can Fund a Scholarship Under the EFTC?"](https://www.federationforchildren.org/who-can-fund-a-scholarship-under-the-eftc/) It counts the people who can actually claim the credit, using IRS Statistics of Income data released at the end of August. The test for a donor is simpler than the test for a student. The credit is nonrefundable, so what matters is whether a filer owes federal income tax. AFC counts 121.5 million filers with federal tax liability, which is 74.2% of all tax filers, or nearly three in four. More than 60% of all filers, 100.5 million tax units, owe enough to give $1,700 and receive the maximum credit. The rest could still give and claim a credit, just a smaller one, capped at what they owe (with any unused amount carrying forward under the statute). The funding figures follow from that count. AFC says that for every 5% of eligible taxpayers who participate, K-12 scholarship funding rises by $9.4 billion, which puts 10% participation at $18.8 billion and 20% at $37.6 billion. Some rough arithmetic: 5% of 121.5 million is about 6.1 million filers, so $9.4 billion works out to roughly $1,550 per participant, a bit under the $1,700 cap. The report sets these amounts against familiar benchmarks. At 10%, it says, the total would exceed the tax deductions and credits generated each year by charitable gifts to all schools, colleges, and universities. At 20%, it would exceed current federal spending on Title I and IDEA special education combined. Two caveats matter before anyone repeats these numbers. First, the report itself calls its totals theoretical upper limits on available credits, not projections, and eligible donors are not participating donors. Whether 5% of filers ever give is the [uptake question](https://eftccredit.com/news/biggest-25f-risk-isnt-politics-its-uptake-july-2026) that decides whether §25F becomes a large program or a small one. Second, AFC assumes $1,700 per return throughout and says directly that Treasury has not ruled on whether married couples filing jointly may claim $3,400. We read the statute the same conservative way ([here is why](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026)), and a [Senate bill introduced in August](https://eftccredit.com/news/hyde-smith-s5322-joint-return-3400-inflation-25f-august-2026) would settle it by amendment instead. For anyone building an SGO, the donor count matters in a way the student count does not. The donor pool is national. A filer does not have to live in a participating state to give, because the statute places the in-state requirement on how an SGO spends the money, not on where the donor lives ([we explained that split in August](https://eftccredit.com/news/25f-state-lines-donors-anywhere-scholarships-in-state-august-2026)). An SGO's donor pool is therefore every one of those 121.5 million filers who can be reached and asked. Turning them into gifts takes work, and our guide to [recruiting donors for your SGO](https://eftccredit.com/learn/recruiting-donors-for-your-sgo) and the [donor number explainer](https://eftccredit.com/learn/25f-donor-number) are good places to start. If you are still forming the organization, the [free SGO builder](https://eftccredit.com/build) walks through each step before the credit opens on January 1, 2027. Sources: - American Federation for Children: New Report Estimates 121.5 Million Taxpayers Are Eligible to Claim the Education Freedom Tax Credit in 2027 (September 9, 2026): https://www.federationforchildren.org/new-report-estimates-121-5-million-taxpayers-are-eligible-to-claim-the-education-freedom-tax-credit-in-2027/ - AFC Growth Fund, Patrick Graff, Ph.D.: Who Can Fund a Scholarship Under the EFTC?: https://www.federationforchildren.org/who-can-fund-a-scholarship-under-the-eftc/ - IRS: SOI Tax Stats, Historic Table 2 (the data source AFC cites): https://www.irs.gov/statistics/soi-tax-stats-historic-table-2 - 26 U.S.C. §25F, qualified elementary and secondary education scholarships: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/afc-121-5-million-taxpayers-eligible-donate-25f-september-2026 ### Treasury proposed a private-school tax-exemption rule on September 4, and it names scholarship programs Date: 2026-09-04. Category: regulatory. On Friday, September 4, 2026, the Treasury Department and the IRS published a notice of proposed rulemaking titled "Racial Nondiscrimination in Private Schools" at 91 FR 56811. It carries docket number REG-119986-25 and RIN 1545-BS05, and it would add a new §1.501(c)(3)-2 to the income tax regulations. Written or electronic comments and requests for a public hearing are due by November 3, 2026, on regulations.gov under IRS-2026-1189. The rule would apply to the taxable year of any private school beginning after May 31, 2027. The operative sentence is short. Proposed §1.501(c)(3)-2(b) says a private school is not "operated exclusively for exempt purposes" if it "adopts, maintains, or enforces any policy or practice that discriminates on the basis of race, color, or national or ethnic origin in the administration of any educational policy, admissions policy, scholarship or loan program, athletic program, or other school-administered or school-supported program." A school that fails that test is not an organization described in section 501(c)(3) for the years the rule covers. The words "scholarship or loan program" are in the regulatory text itself, which is why this proposal is worth reading closely in a year when a new federal scholarship pipeline is about to open. Most of what the rule says has been the government's position since Bob Jones University v. United States in 1983 and Rev. Rul. 71-447 before it. The genuinely new part is the phrase that follows: discrimination on those grounds "includes any discrimination on the basis of race, color, or national or ethnic origin for any purpose." The preamble is explicit about what that reaches, saying the bar applies "regardless of the intent behind or the legality of such discrimination (for example, where such discrimination is defended as serving remedial or diversity-related objectives)." To make that stick, the proposal would modify Rev. Proc. 75-50 as modified by Rev. Proc. 2019-22, deleting the second sentence of section 3.02 and the third and fourth sentences of section 4.05, which are the provisions that had allowed a school to favor racial minority groups in admissions, facilities and programs, and financial assistance. Everything else in Rev. Proc. 75-50 stays. For religious schools, and for the many scholarship organizations whose students attend them, the preamble goes out of its way to draw a line. "For the avoidance of any doubt," it says, the regulations "would not preclude a private school from maintaining a religious mission, curriculum, or program of observance, or from selecting students on the basis of religious affiliation or membership." It adds that a religious selection criterion "does not become discrimination on the basis of race, color, or national or ethnic origin merely because members of the relevant religious community may also share ancestry or ethnic characteristics," provided the criterion rests solely on religion. Schools may also still adopt policies meant to eliminate prejudice and discrimination under the existing regulation, so long as they get there by means other than race-based ones. Now the part that decides who actually has to read this. Proposed §1.501(c)(3)-2(c) defines "private school" as an organization described in section 501(c)(3) and classified as an educational organization under section 170(b)(1)(A)(ii), which is the regular-faculty, regular-curriculum, enrolled-student-body definition. Governmental units and their instrumentalities are excluded. A scholarship granting organization is not that. An SGO is a grantmaking charity, not an educational organization with a faculty and a student body, so this rule does not by its terms regulate SGOs. [§25F](https://eftccredit.com/documents/section-25f) puts its own 501(c)(3) test on the SGO rather than on the school: §25F(c)(5)(A) requires the organization to be described in section 501(c)(3) and not be a private foundation, and the statute defines a qualified expense by cross-reference to section 530(b)(3)(A), which says nothing about the recipient school's exempt status. So the honest description is not that this rule changes who can receive an EFTC scholarship. It does not. It is a condition on the school at the other end of the pipeline, and it bites through the school's own exemption, its donors' charitable deductions, and in many states the property and sales tax treatment that rides on federal exempt status. A school that administers a scholarship program funded by SGO dollars is squarely inside paragraph (b), because the paragraph names school-administered and school-supported programs, and a scholarship funded from outside is still administered by the school when the school decides who gets it. The calendar is the other reason to pay attention. §25F applies to contributions made in taxable years beginning after December 31, 2026, so the first donations are collected in calendar 2027 and the first scholarships are spent on the 2027-28 school year. This rule applies to a school's taxable year beginning after May 31, 2027. Most private schools run a July-to-June fiscal year, which means their 2027-28 year is both the first year they receive federal scholarship money and the first year they are subject to the new regulation. Those two things arrive together, and a school with a race-conscious tuition-assistance set-aside has until the start of that year to look at it. There is one more thing worth naming, because it is a fact about the docket rather than a prediction. This is a Treasury rulemaking about private schools that published while the §25F rule itself has not. Treasury [put the §25F regulations on its Unified Agenda for the fall](https://eftccredit.com/news/treasury-unified-agenda-25f-interim-final-rule-sgo-lists-fall-2026) under RINs 1545-BR97 and 1545-BS17 and has said it expects proposed regulations no later than the end of September. As of today neither RIN appears at OIRA, and a significant tax rule normally clears OIRA review before it publishes. That does not mean the deadline will slip. It does mean the window has narrowed to weeks, and states that [said they were waiting for federal guidance before opening SGO certification](https://eftccredit.com/news/no-state-opened-sgo-certification-waiting-september-nprm-july-2026) are still waiting. Update, September 11, 2026: both §25F RINs reached OIRA on September 10. They were filed as two rules carrying two labels, and [the temporary regulations governing state elections and this fall’s SGO lists carry the interim final rule stage](https://eftccredit.com/news/25f-rules-reach-oira-interim-final-temporary-regs-september-2026), which binds on publication. The sentence above about neither RIN appearing at OIRA was accurate the day this piece published and is no longer current. Update, September 16, 2026: the IRS scheduled a public hearing on this proposal for December 2, 2026 at 10:00 a.m. Eastern, to be conducted by teleconference only (91 FR 58615, REG-119986-25). Anyone who wants to testify must send an outline of their topics by November 3, the same day written comments close, and each speaker gets ten minutes. The notice is explicit that if no outlines arrive by November 3 the hearing will be cancelled, so whether schools and scholarship organizations are heard on the record is decided by that date. Requests to attend without testifying are due November 30. If you run or are forming a scholarship organization, nothing here changes your own compliance work, and the useful response is to know the rule exists so you can answer the question when a partner school asks. If you work with private schools, the version to read is the regulatory text at the end of the notice rather than the preamble summary, and the comment period runs to November 3. Our [guide for private schools](https://eftccredit.com/learn/eftc-for-private-schools) covers how the credit reaches a school, [scholarship eligibility](https://eftccredit.com/learn/scholarship-eligibility) covers who may receive an award, and the [SGO directory](https://eftccredit.com/sgos) lists the organizations already operating. Sources: - Federal Register: Racial Nondiscrimination in Private Schools, 91 FR 56811 (proposed rule, REG-119986-25, RIN 1545-BS05, September 4, 2026): https://www.federalregister.gov/documents/2026/09/04/2026-18127/racial-nondiscrimination-in-private-schools - regulations.gov comment docket IRS-2026-1189 (comments due November 3, 2026): https://www.regulations.gov/commenton/IRS-2026-1189-0001 - Federal Register: Racial Nondiscrimination in Private Schools; Hearing, 91 FR 58615 (REG-119986-25, notice of hearing, September 16, 2026): https://www.federalregister.gov/documents/2026/09/16/2026-19013/racial-nondiscrimination-in-private-schools-hearing - Full text of the proposed regulations (GPO): https://www.federalregister.gov/documents/full_text/text/2026/09/04/2026-18127.txt - 26 U.S.C. §25F (text and our annotations): /documents/section-25f Canonical: https://eftccredit.com/news/irs-proposed-rule-private-school-nondiscrimination-scholarship-programs-september-2026 ### Two petitions in ten days ask the Supreme Court to overrule Locke v. Davey, the case a state would lean on to keep religion out of a scholarship program Date: 2026-09-01. Category: federal-action. State: VA. Update, October 1, 2026: Treasury's temporary regulations, released October 1, answer the question this piece said the statute left open. A participating state may not require SGOs to operate more restrictively than §25F, "such as by limiting the type of school that scholarship recipients may attend," and it must list every qualifying organization located in the state that asks to be included. The petitions themselves are unaffected. [How the state rule works](https://eftccredit.com/news/one-national-standard-states-cannot-add-sgo-rules-25f-october-2026). Two petitions for certiorari were docketed at the Supreme Court ten days apart in August, and they ask for the same thing: that the Court reconsider Locke v. Davey, 540 U.S. 712 (2004). Neither case is about [§25F](https://eftccredit.com/documents/section-25f). Both are about the rule a state would have to rely on if it wanted to open a scholarship program and keep religious schools or religious study out of it, which makes the question they raise a live one for every state now deciding how to write its SGO rules. Locke is the reason that question is not already settled. Washington State ran a Promise Scholarship for high-achieving students and refused to let one recipient use it to pursue a devotional theology degree. The Court upheld the exclusion, describing a space it called the "play in the joints" between what the Establishment Clause forbids and what the Free Exercise Clause requires, and holding that a state's interest in not funding the training of clergy could sit inside that space. Two decades of later decisions have narrowed it. Trinity Lutheran in 2017, Espinoza in 2020, and Carson v. Makin in 2022 each held that a state may not exclude a school from a generally available benefit because it is religious. What survives of Locke after those cases, and whether anything should, is what these petitions put in front of the Court. The first is Hall v. Fleming, No. 26-193, filed August 11 and docketed August 14. Bethany Hall, an undergraduate at Liberty University, qualified for Virginia's Tuition Assistance Grant, worth $5,000 a year at a private in-state college. Virginia's program disqualifies students whose primary major falls under religious training or theological education, and when Hall moved from music education to youth ministries and then to music and worship, the grant went away unless she changed majors back. The Fourth Circuit, in No. 25-1574 decided May 13, 2026, affirmed the dismissal of her free-exercise claim on the ground that Locke remains binding precedent and controls. The petition asks the Court to reverse Locke outright. The respondent is A. Scott Fleming, who directs the State Council of Higher Education for Virginia, and his response is due October 14 after an extension granted August 25. The second is Woolard v. Thurmond, No. 26-237, filed August 20 and docketed August 24. California families enrolled children in independent-study programs at charter schools and asked the schools to purchase religious curricula. The schools refused, citing California's constitutional and statutory requirement that public schools, charters included, be nonsectarian. The Ninth Circuit affirmed dismissal in No. 24-4291, in an amended opinion the Supreme Court's docket dates to March 23, 2026, holding that even assuming the materials are a generally available public benefit, independent-study programs are public enough that California may require secular curricula, and that a public school's curriculum decisions are government speech. The respondent is Tony Thurmond, California's Superintendent of Public Instruction, and his response is due September 23. On September 1 the same organization, the NC Values Institute, filed an amicus brief in support of the petitioners in both cases. That is a small signal rather than a large one, but it is the kind of coordination that usually means a group of litigants is trying to give the Court more than one vehicle for the same question in the same term. They are not the only vehicles. St. Mary Catholic Parish v. Roy, No. 25-581, is [already calendared for argument on November 3](https://eftccredit.com/news/supreme-court-november-3-argument-state-conditions-religious-schools-25f-august-2026) and asks how far Colorado may condition participation in its universal preschool program on a religious provider's compliance with state nondiscrimination rules. We wrote in August about [how closely the state attorneys general who filed briefs in that case track the §25F roster](https://eftccredit.com/news/state-ags-split-st-mary-roy-briefs-track-25f-roster-august-2026). And in the First Circuit, St. Dominic Academy v. Makin, No. 24-1739, was decided on July 2, 2026, three years after Carson v. Makin opened Maine's town tuitioning program to religious schools. Maine responded to Carson by applying its Human Rights Act to schools that accept tuition money, and a Catholic school challenged the resulting requirements. The First Circuit affirmed in part and reversed in part, finding the school lacked standing on the employment rule and that its challenges to the religious and sexual-orientation and gender-identity nondiscrimination rules were unlikely to succeed. The window to seek certiorari in that case runs into the fall. The connection to the federal credit is a conditional one, and it is worth stating precisely rather than dramatically. §25F does not require a state to include or exclude any category of school. A covered state's job under §25F(g) is to submit a list of scholarship granting organizations, and the statute's conditions on those organizations are about exempt status, the 90% test, non-comingled accounts, and serving at least ten students across more than one school. Nothing in the statute tells a state whether it may attach further conditions of its own, and several states have already shown they intend to try, whether through [gating the decision itself](https://eftccredit.com/news/rhode-island-mckee-signs-both-branches-gate-25f-june-2026) or through the eligibility rules attached to it. When a state does write such a condition and it touches religion, Locke is the strongest authority in its favor. That is why the fate of Locke is an SGO-rules question and not only a doctrinal one. The honest caveat is the size of the step being asked for. A cert petition is not a grant, and the Court denies the overwhelming majority of them. It has also spent twenty years narrowing Locke without overruling it, which is a pattern that can continue indefinitely. The realistic near-term reading is that St. Mary v. Roy gets argued on November 3 and decided by the end of the term, and that the two petitions sit on the docket while that happens. Whether either is granted, held, or denied will likely turn on what the Court says in Roy. For an organization forming now, none of this changes what you build. The requirements that will determine whether you land on a state's list are in the statute and will not move: 501(c)(3) status, no private foundation classification, a separate account for qualified contributions, 90% of income to scholarships, and at least ten students across more than one school. Start with the [free SGO builder](https://eftccredit.com/build), read [how to start an SGO](https://eftccredit.com/learn/how-to-start-an-sgo), and follow the state decisions on the [Virginia](https://eftccredit.com/states/virginia), [California](https://eftccredit.com/states/california), and [Maine](https://eftccredit.com/states/maine) pages. Update, September 15, 2026: there is a third petition. Johnson v. Fleming, No. 26-240, filed August 20, challenges Virginia's tuition grant and National Guard tuition programs and also asks the Court to overrule Locke. In Woolard, every respondent's time to answer has been extended to October 23. And on September 14, West Virginia and 21 other states filed in Hall urging the Court to take the case; [all 22 are §25F participating states](https://eftccredit.com/news/22-states-urge-supreme-court-overrule-locke-v-davey-september-2026). Sources: - Supreme Court docket, Hall v. Fleming, No. 26-193: https://www.supremecourt.gov/docket/docketfiles/html/public/26-193.html - Supreme Court docket, Woolard v. Thurmond, No. 26-237: https://www.supremecourt.gov/docket/docketfiles/html/public/26-237.html - Hall v. Fleming, No. 25-1574 (4th Cir. May 13, 2026): https://www.ca4.uscourts.gov/opinions/251574.P.pdf - Woolard v. Thurmond, No. 24-4291 (9th Cir.): https://law.justia.com/cases/federal/appellate-courts/ca9/24-4291/24-4291-2025-09-11.html - St. Dominic Academy v. Makin, No. 24-1739 (1st Cir. July 2, 2026): https://law.justia.com/cases/federal/appellate-courts/ca1/24-1739/24-1739-2026-07-02.html - Supreme Court docket, St. Mary Catholic Parish v. Roy, No. 25-581: https://www.supremecourt.gov/docket/docketfiles/html/public/25-581.html Canonical: https://eftccredit.com/news/two-cert-petitions-ask-supreme-court-overrule-locke-v-davey-september-2026 ### McMahon came back to Michigan and named the lever: Whitmer can set aside the State Board's vote, and has not Date: 2026-08-28. Category: state-action. State: MI. Five months after she stood in a Hamtramck charter school and [asked Gov. Gretchen Whitmer to opt Michigan in](https://eftccredit.com/news/mcmahon-presses-whitmer-michigan-opt-in-25f-march-2026), U.S. Education Secretary Linda McMahon was back in the state on August 28, 2026, this time at an America First Policy Institute event in Sterling Heights, and this time with a more specific ask. "We're encouraging Governor Whitmer to opt into this program," she said, according to The Detroit News. "I believe that the State Board of Education denied that here in Michigan. She has the right to join and override that, but so far she has not done that." She added: "It's anathema to me that a governor wouldn't want to give the opportunity, if you will, for more choice, in this particular instance, in her state." The vote she was referring to happened on May 12, 2026. Michigan's eight-member State Board of Education, which Democrats control six to two, passed a resolution along party lines urging Whitmer not to elect the state into the Education Freedom Tax Credit (also called the Federal Scholarship Tax Credit, ECCA, or [§25F](https://eftccredit.com/documents/section-25f)). The resolution leans on Article VIII, Section 2 of the Michigan Constitution, which says no public monies or property may be appropriated to aid or maintain any private school, and argues public resources should go to schools "that are open to all children and accountable to the people of Michigan." Board member Pamela Pugh, a Saginaw Democrat, put it as "public resources should strengthen public schools." Tom McMillin, one of the two Republicans, voted no and said the opposite thing was obvious: "We're not talking about tax dollars." Both Chalkbeat Detroit and Michigan Advance reported the resolution is advisory only. That is the part McMahon's word "override" gets slightly wrong, and the correction favors her argument rather than the board's. There is nothing to override. The board has no role in the decision at all. [§25F(g)(1)(B)](https://eftccredit.com/documents/section-25f) gives the election to "the Governor of the State or by such other individual, agency, or entity as is designated under State law," and Michigan law designates no one, so the choice sits with Whitmer alone, exactly as it did before May 12. The constitutional objection also runs into the same problem McMillin flagged. A state's election under §25F appropriates nothing. The credit is federal, the money is a private donation to a private nonprofit, and the state's only act is to name the organizations on its list. Whether a program built that way offends a no-aid clause is a live question in the courts for other states, and we have followed [the Supreme Court case that could shape it](https://eftccredit.com/news/state-ags-split-st-mary-roy-briefs-track-25f-roster-august-2026), but Michigan's board did not claim its resolution binds anyone and the department that answered McMahon on Friday did not either. That answer came fast. The same day, the Michigan Department of Education released a statement titled "MDE Reaffirms Commitment to Public Education, Putting Students First." It describes §25F as "a new federal program that directs funding to tax credits instead of student supports such as special education and Career and Technical Education," and quotes State Superintendent Glenn Maleyko: "I fully support the State Board of Education's resolution. We must strengthen public schools, support educators, partner with families and ensure that every child has access to a high-quality education. That is how we put Students First." McMahon had anticipated that framing. "It's confusing to me why that would not be putting the child first by opting into this program," she said. Whitmer's office did not comment. What has changed since March is mostly the calendar. In March, the governor's office said it was awaiting federal guidance, and that was a reasonable thing to say when the guidance did not exist. Treasury has since [previewed the rules](https://eftccredit.com/news/25f-treasury-preview-one-week-later-what-changed-june-2026), [put them on its regulatory agenda for the fall](https://eftccredit.com/news/treasury-unified-agenda-25f-interim-final-rule-sgo-lists-fall-2026), and said it expects proposed regulations by the end of September. Thirty states are on the IRS list, and the credit starts on January 1, 2027. A governor who wanted to wait for the rules will have them within weeks. A governor who wanted to wait for the State Board now has that too. The practical stakes for Michigan families are the ones McMahon raised in March and did not need to repeat. Under §25F, a donor's credit depends on giving to an organization on some state's list, not on where the donor lives, while the scholarships an organization awards go to students in its own state. We walked through the mechanics in [how §25F treats state lines](https://eftccredit.com/news/25f-state-lines-donors-anywhere-scholarships-in-state-august-2026). So a Michigan taxpayer can already claim the full $1,700 in 2027 by giving to a scholarship organization in Ohio or Indiana. What a Michigan student cannot do, until Whitmer files, is receive one. For anyone in Michigan thinking about the organization side, the useful work does not depend on Lansing. An organization that wants to be on the state's list the day one exists needs 501(c)(3) status, a plan to serve at least ten students across more than one school, and books that can prove 90% of its income goes to scholarships. Start with the [free SGO builder](https://eftccredit.com/build), read [how to start an SGO](https://eftccredit.com/learn/how-to-start-an-sgo), check [the SGO directory](https://eftccredit.com/sgos), and track the decision on the [Michigan state page](https://eftccredit.com/states/michigan). The thing to watch is short: a Form 15714 from the governor's office, or a statement explaining why there will not be one. Whitmer is in her final year in office, and she shared the Sterling Heights stage with a congressional candidate, so the pressure will not ease before November. But the decision has not moved in five months, and the one person who can move it has said nothing since March. Sources: - The Detroit News: McMahon blasts Whitmer for not opting Michigan into tax credit program (Jennifer Pignolet, August 28, 2026): https://www.detroitnews.com/story/news/politics/2026/08/28/mcmahon-blasts-whitmer-for-not-opting-michigan-into-tax-credit-program/91494137007/ - Michigan Department of Education: MDE Reaffirms Commitment to Public Education, Putting Students First (August 28, 2026): https://www.michigan.gov/mde/news-and-information/press-releases/2026/08/28/mde-reaffirms-commitment-to-public-education-putting-students-first - Chalkbeat Detroit: Will Whitmer opt Michigan into the federal tax credit scholarship? Not if education board members have a say (Lori Higgins, May 12, 2026): https://www.chalkbeat.org/detroit/2026/05/12/michigan-state-board-education-opposes-federal-tax-credit-scholarship/ - Michigan Advance: Michigan education board opposes Trump's tax credit scholarship program (May 13, 2026): https://michiganadvance.com/2026/05/13/michigan-education-board-opposes-trumps-tax-credit-scholarship-program/ - Michigan Constitution, Article VIII, § 2 (no public monies for nonpublic schools): https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-Article-VIII-2 - IRS: Federal Scholarship Tax Credit (FSTC), participating states for 2027 (as of July 24, 2026; Michigan not included): https://www.irs.gov/government-entities/federal-state-local-governments/federal-scholarship-tax-credit-fstc - Our archive: full text of §25F as enacted by Public Law 119-21, §70411: /documents/section-25f Canonical: https://eftccredit.com/news/mcmahon-sterling-heights-whitmer-override-state-board-25f-august-2026 ### A Chicago school board member broke with his own board's resolution and asked Pritzker to opt Illinois into §25F Date: 2026-08-27. Category: state-action. State: IL. The people asking Gov. JB Pritzker to opt Illinois into the Education Freedom Tax Credit (also called the Federal Scholarship Tax Credit, ECCA, or [§25F](https://eftccredit.com/documents/section-25f)) have mostly been [Senate Republicans](https://eftccredit.com/news/illinois-senate-gop-25f-opt-in-push-may-2026) and private-school advocates. On Thursday, August 27, 2026, the ask came from a different direction. At a press conference outside South Loop Elementary School, Chicago Board of Education member Angel Gutierrez, Vienna High School superintendent Joshua Stafford, and Stand for Children Illinois executive director Jessica Handy called on the governor to elect the state in, Chalkbeat Chicago reported. Gutierrez's presence is the news. In April 2026 the Chicago Board of Education passed a non-binding resolution opposing Illinois participation, and Gutierrez was the only member absent from the vote. On Thursday he said why he would not have supported it. "I think it was politically driven," he said, adding that "we have to be really cognizant of any type of potential dollars that may help and directly benefit the students." Stafford, who runs a public high school district in far southern Illinois, made the point that the question in front of the state is no longer whether the credit should exist. "It indeed is a set, settled, and passed law at this point," he said. "Each state now gets to make a determination." Handy said Illinois should take "creative and innovative approaches" to make sure access is equitable rather than sit the program out. That is a public-school coalition making a public-school argument, and it tracks a case that has been building nationally all summer. Under §25F, a scholarship granting organization can fund tutoring, special-needs services for students with disabilities, books, and other qualified expenses for students in public schools, not just private tuition. In July, [thirteen national education groups led by the school superintendents' association wrote to Treasury](https://eftccredit.com/news/public-school-coalition-treasury-letter-90-percent-rule-july-2026) about how to make that side of the program workable, and North Carolina's governor has [pushed his state's program toward public-school students](https://eftccredit.com/news/north-carolina-stein-public-school-sgo-pivot-25f-june-2026). We lay out what the statute allows in [EFTC for public schools](https://eftccredit.com/learn/eftc-for-public-schools). The Chicago press conference is the first time that argument has been made in Illinois by people who run public schools. Where the decision sits has not changed. The General Assembly [adjourned its spring session on June 1 with all three opt-in bills dead in committee](https://eftccredit.com/news/illinois-spring-session-adjourns-25f-bills-die-committee-june-2026), so under [§25F(g)(1)(B)](https://eftccredit.com/documents/section-25f) the election belongs to the governor unless a later law says otherwise. Pritzker's office gave Chalkbeat the same answer it has given since spring: it is "waiting to see what the federal rules look like before deciding whether to join." That is about to stop being a reason to wait. Treasury has said it expects proposed regulations by the end of September, and the credit takes effect on January 1, 2027. Chalkbeat put the governor's window at roughly four months. There is also pressure from below: the Illinois Policy Institute has run a ballot-question campaign on the program in more than twenty counties this year. Pritzker is not the only Democratic governor working through this, and the others have gone different ways. Colorado's Jared Polis [opted in first among Democrats](https://eftccredit.com/news/colorado-governor-polis-opts-in-december-2025), and New York's Kathy Hochul [said in May she intends to](https://eftccredit.com/news/new-york-governor-hochul-opts-in-may-2026). Hawaii, Minnesota, and Oregon [said no](https://eftccredit.com/news/declined-states-reconsidering-hawaii-new-mexico-oregon-may-2026). Illinois, Michigan, Pennsylvania, New Jersey, Maryland, and Connecticut have said nothing final. Thirty states are on the IRS list as of July 24, and none of them is Illinois, which let its own Invest in Kids scholarship credit expire at the end of 2023 and has had no tax-credit scholarship program since. For anyone in Illinois thinking about the organization side, the part worth doing now does not depend on Springfield. If Pritzker elects in, Illinois has to hand Treasury a list of organizations that meet the federal test on day one: 501(c)(3) status, scholarships for at least ten students who do not all attend the same school, and at least 90% of income spent on scholarships. Organizations that ran under Invest in Kids know most of this already. Work through it with the [free SGO builder](https://eftccredit.com/build), read [how to start an SGO](https://eftccredit.com/learn/how-to-start-an-sgo), check [the SGO directory](https://eftccredit.com/sgos), and follow the decision on the [Illinois state page](https://eftccredit.com/states/illinois). The thing to watch is whether the coalition that showed up on Thursday grows. A board member and a downstate superintendent are two voices. If more public-school leaders decide the tutoring and services money is worth having, the governor's calculation changes, because the objection he has heard loudest so far is that the program is for private schools. Thursday was the first sign from inside Illinois public education that it is not. Sources: - Chalkbeat Chicago: Chicago education advocates call on Pritzker to opt into federal tax credit scholarship program (Makiya Seminera, August 27, 2026): https://www.chalkbeat.org/chicago/2026/08/27/chicago-education-advocates-call-on-pritzker-to-opt-into-federal-tax-credit-scholarship-program/ - IRS: Federal Scholarship Tax Credit (FSTC), participating states for 2027 (as of July 24, 2026; Illinois not included): https://www.irs.gov/government-entities/federal-state-local-governments/federal-scholarship-tax-credit-fstc - 26 U.S.C. §25F(g), state list of scholarship granting organizations and who makes the election: https://www.law.cornell.edu/uscode/text/26/25F - Our archive: full text of §25F as enacted by Public Law 119-21, §70411: /documents/section-25f Canonical: https://eftccredit.com/news/chicago-board-member-gutierrez-pritzker-opt-in-25f-august-2026 ### All 21 states that backed the Catholic preschools are in §25F. Of the 19 that backed Colorado, two are. Date: 2026-08-24. Category: federal-action. State: CO. Update, October 1, 2026: the floor-or-ceiling question now has a federal answer for §25F. Treasury's temporary regulations bar a participating state from requiring SGOs to operate more restrictively than §25F, "such as by limiting the type of school that scholarship recipients may attend," and require the state to list every qualifying organization located there that asks. St. Mary v. Roy is still the case on how far a state may condition its own programs, like Colorado's preschool program. [How the state rule works](https://eftccredit.com/news/one-national-standard-states-cannot-add-sgo-rules-25f-october-2026). Two weeks ago we wrote that the Supreme Court had [set argument for November 3](https://eftccredit.com/news/supreme-court-november-3-argument-state-conditions-religious-schools-25f-august-2026) in St. Mary Catholic Parish in Littleton, Colorado v. Roy, No. 25-581, and that forty-three members of Congress had told the Court the case will decide whether a participating state can use nondiscrimination conditions to keep religious schools out of the Education Freedom Tax Credit (also called the Federal Scholarship Tax Credit, ECCA, or [§25F](https://eftccredit.com/documents/section-25f)). Merits briefing has now closed. Colorado filed its brief on August 17, and twenty-five amicus briefs supporting it landed on August 21 and 24. Twenty-nine had already come in on the other side. Two of the fifty-four are filed by states, and reading them next to the federal participation roster produces a map worth putting on the record. The first was filed on July 2 by West Virginia and twenty other states, supporting the parishes. Its argument is that a rule can target religion without saying so, that Colorado's universal preschool nondiscrimination requirement is one such rule, and that treating covertly discriminatory laws as constitutionally permissible "would threaten the system of public-religious partnerships." The signatories are West Virginia, Alabama, Alaska, Arkansas, Florida, Georgia, Idaho, Iowa, Kansas, Kentucky, Louisiana, Missouri, Montana, Nebraska, North Dakota, Oklahoma, South Carolina, South Dakota, Texas, Utah, and Wyoming. Every one of those twenty-one states is on the IRS [§25F participation roster](https://eftccredit.com/states) for 2027. Not most of them. All of them. The second was filed on August 24 by Massachusetts and Minnesota, joined by sixteen other states and the District of Columbia, supporting Colorado. Their argument is about administrative machinery rather than religion. Almost every state runs at least some programs through a "mixed-delivery" model, meaning private providers deliver a public service, and states say they have "a strong interest in holding providers to minimum standards," including protections against discrimination. Their warning is that the parishes' reading of Carson v. Makin "would require states to rethink how, and even whether, they could continue to partner with private providers while still enforcing minimum standards." The signatories are Massachusetts, Minnesota, California, Delaware, the District of Columbia, Hawai'i, Illinois, Maine, Maryland, Michigan, Nevada, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Virginia, and Washington. Line those two lists up against the roster and the overlap is close to total. Twenty-one of the thirty participating states signed the brief arguing that states may not use neutral-looking conditions to exclude religious providers. Of the nineteen jurisdictions on the other side, seventeen are outside the program: four have declined outright (Minnesota, Hawaii, New Mexico, Oregon), twelve are undecided, and [New York has announced intent](https://eftccredit.com/news/new-york-governor-hochul-opts-in-may-2026) without completing a filing. Two things keep this from being a simple partisan tally. These briefs are signed by attorneys general, who are separately elected and in several of these states belong to a different party than the governor. And neither state brief mentions §25F at all; both argue the doctrine, and it was the congressional brief in July that connected the doctrine to the credit. The two exceptions are the interesting part. Nevada is on the roster because [Gov. Joe Lombardo, a Republican, filed the advance election](https://eftccredit.com/news/nevada-governor-lombardo-opts-in-25f-january-2026); its attorney general, Aaron Ford, a Democrat, signed the brief defending state conditioning power. Virginia is on the roster because [Glenn Youngkin filed days before leaving office](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), which makes participation something Gov. Abigail Spanberger inherits and [decides whether to renew](https://eftccredit.com/news/virginia-can-it-leave-25f-hb359-stalls-spanberger-renewal-june-2026); its attorney general, Jay Jones, signed as well. Neither signature is a withdrawal from the credit, and neither state has moved to leave it. What they show is that the authority these attorneys general are defending, the power to attach conditions to a privately delivered public program, is not one that only non-participating states want to keep. Colorado itself makes the same point from the other direction, and it is the clearest evidence that these are two separate questions. Colorado [opted into §25F under Gov. Jared Polis](https://eftccredit.com/news/colorado-governor-polis-opts-in-december-2025) in December 2025, and it is the respondent here defending its preschool rule. It is also the state whose legislature [killed HB26-1292 in committee, 11-0](https://eftccredit.com/news/colorado-house-kills-hb26-1292-sgo-guardrails-april-2026), the bill that would have carried conditions of this kind into K-12 and into its SGO designations. A state can defend its authority to set conditions in one program and decline to use that authority in another. So far Colorado has done exactly that, and only [Vermont has written SGO conditions into statute](https://eftccredit.com/news/vermont-h933-restrict-25f-opt-in-june-2026), in a state that has not completed participation. For anyone standing up an organization, nothing filed in August changes a single federal requirement. §25F still asks for 501(c)(3) status, scholarships for at least ten students who do not all attend the same school, and at least 90% of income spent on scholarships, and none of that is before the Court. What is before the Court is how much room a state has to add its own terms before it puts an organization on the list it sends Treasury, the question we have tracked as whether §25F is a [federal floor or a federal ceiling](https://eftccredit.com/news/federal-floor-or-ceiling-25f-state-restrictions-june-2026). The practical read is unchanged and, if anything, clearer: the states most likely to write restrictive conditions are overwhelmingly the states that have not opted in, and the twenty-one that have opted in and filed are on record against that approach. Work through formation with the [free SGO builder](https://eftccredit.com/build), check your state on the [participation map](https://eftccredit.com/states), and see who else is organizing in the [SGO directory](https://eftccredit.com/sgos). Argument is November 3, eight weeks before the credit takes effect, and the Court posts live audio the same morning. A decision is likely by the end of June 2027, so §25F will run its entire first year before the answer arrives. Sources: - Supreme Court of the United States: Docket for No. 25-581, St. Mary Catholic Parish in Littleton, Colorado v. Roy (respondents' brief Aug. 17, 2026; amicus briefs Aug. 21 and 24; circulated Aug. 27): https://www.supremecourt.gov/search.aspx?filename=/docket/docketfiles/html/public/25-581.html - Brief of Amici Curiae State of West Virginia and 20 Other States in Support of Petitioners (filed July 2, 2026): https://www.supremecourt.gov/DocketPDF/25/25-581/415670/20260702175352353_St%20Marys%20States%20Amicus.pdf - Brief of Massachusetts, Minnesota, Sixteen Other States, and the District of Columbia as Amici Curiae in Support of Respondents (filed Aug. 24, 2026): https://www.supremecourt.gov/DocketPDF/25/25-581/419928/20260824135106267_25-581%20bsac%20Massachusetts%20Minnesota%20et%20al.pdf - Brief of respondents Lisa Roy, et al. (filed Aug. 17, 2026): https://www.supremecourt.gov/DocketPDF/25/25-581/419261/20260817140909161_25-581%20Brief.pdf - IRS: Federal Scholarship Tax Credit (FSTC), list of states electing to participate for 2027: https://www.irs.gov/government-entities/federal-state-local-governments/federal-scholarship-tax-credit-fstc - 26 U.S.C. §25F, qualified elementary and secondary education scholarships: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/state-ags-split-st-mary-roy-briefs-track-25f-roster-august-2026 ### The White House put §25F in the Rose Garden. The "red and blue" roster it described is mostly red, and most of the blue came by override Date: 2026-08-24. Category: federal-action. On Monday, August 24, 2026, the Education Freedom Tax Credit (also called the Federal Scholarship Tax Credit, ECCA, or [§25F](https://eftccredit.com/documents/section-25f)) got the most visible platform it has had since it was signed. President Trump and U.S. Education Secretary Linda McMahon hosted a "Back to School and Education Freedom" event in the White House Rose Garden, with Nebraska Gov. Jim Pillen, Arkansas Gov. Sarah Huckabee Sanders, and House Education and Workforce Chairman Tim Walberg in attendance, along with families the president introduced from North Carolina, Florida, and Indiana. "One year ago, as part of the great big beautiful bill, we passed the education freedom tax credit, the largest ever expansion of school choice," Trump said, "and we want every parent to have the power to send their child to a high quality school that shares their values." McMahon's prepared remarks led with the credit. "Through the Education Freedom Tax Credit, President Trump has delivered the largest national expansion of education freedom in history for over 50 million eligible children," she said, "giving parents unprecedented freedom to choose the path that's best for their child." Then the line that is worth checking: "It's no surprise that over half of our nation's states, both red and blue, have raced to this historic school choice option, benefitting families whether their child attends public or private school." The White House release put the same claim as "30+ states already opting in or signaling their intent to participate" and "nearly 52 million students nationwide" eligible. The numbers hold up, with one footnote each. The IRS list of participating states for 2027 stands at 30 as of July 24, which we tracked when [Kentucky became the thirtieth](https://eftccredit.com/news/irs-roster-30-states-kentucky-added-official-count-july-2026). The "plus" is New York, where [Gov. Hochul said in May she intends to opt in](https://eftccredit.com/news/new-york-governor-hochul-opts-in-may-2026) but has not filed. The 52 million comes from [the American Federation for Children's July analysis](https://eftccredit.com/news/afc-51-7-million-students-eligible-25f-first-state-estimates-july-2026), which counts every K-12 student in a household under 300% of area median income, in every state, whether or not the state has joined. Roughly 21 million of those students live in states that have not. "Red and blue" is the claim that needs the most context, and the context is more interesting than the slogan. Of the 30 states on the IRS list, 25 have Republican governors. Five have Democrats: Colorado, Kentucky, Kansas, North Carolina, and Virginia. Only one of the five got there because its governor decided it should. Colorado's Jared Polis [called opting in a no-brainer](https://eftccredit.com/news/colorado-governor-polis-opts-in-december-2025) and filed. Kentucky's Andy Beshear vetoed the opt-in bill and [the legislature overrode him](https://eftccredit.com/news/kentucky-legislature-overrides-beshear-veto-march-2026) with a law that assigns the election to the Secretary of State, who [filed it in July](https://eftccredit.com/news/kentucky-adams-files-federal-25f-opens-sgo-declaration-july-2026). Kansas's Laura Kelly vetoed and [was overridden](https://eftccredit.com/news/kansas-legislature-overrides-kelly-veto-april-2026). North Carolina's Josh Stein vetoed and [was overridden along party lines](https://eftccredit.com/news/north-carolina-senate-completes-stein-veto-override-june-2026). Virginia's election was made by Glenn Youngkin in his last days in office, and his Democratic successor [has left it standing](https://eftccredit.com/news/virginia-can-it-leave-25f-hb359-stalls-spanberger-renewal-june-2026). The roster is bipartisan in the sense that matters to the statute, which does not ask who governs. It is not yet bipartisan in the sense of Democratic governors choosing it, and the honest count there is one, with a second pending in Albany. That is why the two governors on the lawn were Pillen and Sanders. Nebraska was [the first state to commit](https://eftccredit.com/news/nebraska-pillen-first-to-commit-executive-order-25-14-september-2025), by executive order in September 2025, and Arkansas [announced in January](https://eftccredit.com/news/arkansas-sanders-announces-25f-participation-january-2026). Both are states where the governor held the decision and made it. The states the administration most wants to move are the ones where a Democratic governor holds the decision alone and has not made it: Michigan, Illinois, Pennsylvania, New Jersey, Maryland, Connecticut, Delaware. Four days after the Rose Garden, McMahon was in Sterling Heights [pressing Gov. Whitmer by name](https://eftccredit.com/news/mcmahon-sterling-heights-whitmer-override-state-board-25f-august-2026), and three days after it a Chicago school board member [broke with his own board to ask Gov. Pritzker](https://eftccredit.com/news/chicago-board-member-gutierrez-pritzker-opt-in-25f-august-2026). The event was the opening of a push, not a victory lap. The opposition answered on cue. American Federation of Teachers president Randi Weingarten, quoted by The Washington Times, called the program a "likely illegal scheme" that benefits families already in private schools. We have covered [who opposes §25F and what they can actually do about it](https://eftccredit.com/news/who-opposes-25f-unions-democrats-repeal-bill-2026), and the answer as of this week is unchanged: the repeal bills in both chambers have had no committee action since they were introduced, and no lawsuit has been filed against the credit itself. The illegality claim is an argument about state constitutions, and the states where it would matter are the ones that have not joined. What the Rose Garden changes for scholarship organizations is attention, and attention is the scarce input. The credit is worth $1,700 to any taxpayer who gives to a listed organization, in any state, and [the real risk to the program has always been that donors do not know it exists](https://eftccredit.com/news/biggest-25f-risk-isnt-politics-its-uptake-july-2026). A president saying its name from the Rose Garden four months before it starts, with the proposed regulations due by the end of September and [Alaska's first approvals promised by the same date](https://eftccredit.com/news/alaska-opens-sgo-applications-first-state-approvals-september-30-august-2026), is the kind of awareness no organization could buy. The organizations that benefit are the ones on a state list when donors go looking. Start with the [free SGO builder](https://eftccredit.com/build), read [how to start an SGO](https://eftccredit.com/learn/how-to-start-an-sgo), and check [who is already listed in your state](https://eftccredit.com/sgos). The thing to watch is whether "30+" becomes 31 by a governor's signature rather than a legislature's override. The IRS page, not a press release, is where that will show up. Sources: - The White House: President Trump Champions Educational Freedom, Putting Students and Parents First (August 24, 2026): https://www.whitehouse.gov/releases/2026/08/president-trump-champions-educational-freedom-putting-students-and-parents-first/ - U.S. Department of Education: Secretary McMahon Joins President Trump to Deliver Back-to-School Remarks at the White House (prepared remarks, August 24, 2026): https://www.ed.gov/about/news/speech/secretary-mcmahon-joins-president-trump-deliver-back-school-remarks-white-house - The White House: photo gallery, Back to School and Education Freedom event, Monday, August 24, 2026: https://www.whitehouse.gov/gallery/president-donald-trump-attends-a-back-to-school-and-education-freedom-event-monday-august-24-2026/ - States Newsroom via Salisbury Post: Trump, McMahon promote school voucher program as students return to class (Shauneen Miranda, August 26, 2026): https://www.salisburypost.com/2026/08/26/trump-mcmahon-promote-school-voucher-program-as-students-return-to-class/ - Deseret News: Trump touts his school choice initiatives during back to school Rose Garden event (Jason Swensen, August 24, 2026): https://www.deseret.com/education/2026/08/24/trump-back-to-school/ - The Washington Times: Trump highlights school choice agenda at back-to-school event (August 24, 2026): https://www.washingtontimes.com/news/2026/aug/24/trump-highlights-school-choice-agenda-back-school-event/ - IRS: Federal Scholarship Tax Credit (FSTC), participating states for 2027 (as of July 24, 2026): https://www.irs.gov/government-entities/federal-state-local-governments/federal-scholarship-tax-credit-fstc - Our archive: full text of §25F as enacted by Public Law 119-21, §70411: /documents/section-25f Canonical: https://eftccredit.com/news/white-house-rose-garden-back-to-school-25f-red-and-blue-roster-august-2026 ### Delaware's opt-in ask came from inside Legislative Hall this time, and only Gov. Meyer can answer it before January Date: 2026-08-21. Category: state-action. State: DE. Update, October 1, 2026: Treasury's temporary regulations, released October 1, set the cutoff the statute left open. For 2027, a state must file its advance election on Form 15714 by January 1, 2027 and submit its SGO list by February 15, 2027; a first-time state cannot elect just by sending a list, and a state that elects but misses the list deadline has no qualifying SGOs for 2027. [The 2027 calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). Delaware is one of the states still off the roster for the Education Freedom Tax Credit (also called the Federal Scholarship Tax Credit, ECCA, or [§25F](https://eftccredit.com/documents/section-25f)), and on August 17, 2026 it got its first written request from a sitting legislator to change that. State Rep. Mike Smith, a Republican who represents Pike Creek Valley, wrote to Gov. Matt Meyer asking him to elect Delaware into the program and to identify qualifying Scholarship Granting Organizations for the 2027 tax year. His caucus released the letter on August 21. "This is a no-brainer for Delaware," Smith said in the release. "We can empower parents and help students succeed without costing our state taxpayers a single penny." He also put his own history behind the ask: "Growing up in a full house with my Nan and cousins, I saw how every dollar mattered. A scholarship would have been an incredible help to us then, just as it will be for thousands of Delaware families now who are struggling with rising costs." That is a different kind of pressure than Delaware has seen so far. In May, the Catholic Diocese of Wilmington [stood up a campaign and a pastoral letter aimed at the same decision](https://eftccredit.com/news/diocese-of-wilmington-25f-opt-in-campaign-meyer-may-2026), and the number now driving the conversation, roughly $40 million a year for Delaware students, has been circulating since mid-July from Nancy Mercante of the Caesar Rodney Institute. Both are outside voices. Smith's letter is the first one from inside the building where a bill would be written, which matters mostly because of what the building is doing right now, which is nothing. Delaware's General Assembly finished its 2026 work at the end of June and both chambers are in recess. Under Article II, Section 4 of the state constitution, it reconvenes on the second Tuesday of January, which in 2027 is January 12, "unless otherwise convened by the Governor, or by mutual call of the presiding officers of both Houses." The credit takes effect January 1, 2027. So the route Pennsylvania is trying, where [six senators including a Democrat are drafting a bill to opt the state in without waiting on the governor](https://eftccredit.com/news/pennsylvania-senate-bipartisan-memo-25f-legislative-opt-in-august-2026), is not available to Delaware on this timeline. Neither is the path Tennessee and Kentucky took, where a statute named the office that handles the state's side of this. The only earlier session is one the governor calls, or one the Speaker and the President Pro Tempore call together. The statute closes the loop. [§25F(g)(1)(B)](https://eftccredit.com/documents/section-25f) says the election "shall be made by the Governor of the State or by such other individual, agency, or entity as is designated under State law to make such elections on behalf of the State with respect to Federal tax benefits." Delaware has designated no one. That leaves the default, and the default is Meyer. It is worth being precise about the deadline too, because it is softer than the advocacy framing suggests: the statute's January 1 date for a state to send Treasury its list of organizations is relaxed for the first year to "as early as practicable," and the advance-election procedure is what puts a state on the roster for 2027. There is no single statutory cutoff. What there is instead is arithmetic, since an organization that is not formed cannot be listed, and a scholarship that is not funded in the first quarter is not helping a family in the 2027 school year. About that $40 million. Neither the Caesar Rodney Institute piece nor the party releases repeating it publish a methodology, so it is worth seeing what the figure requires. At the statutory maximum of $1,700 per taxpayer, $40 million is about 23,500 Delawareans each claiming the full credit. That is a ceiling estimate of donor capacity, not a forecast, and it is the same shape of number other states have seen: [the July state-by-state estimates](https://eftccredit.com/news/afc-51-7-million-students-eligible-25f-first-state-estimates-july-2026) measured eligible students rather than dollars, and [Maryland's own figure of roughly $34 million](https://eftccredit.com/news/maryland-wes-moore-25f-decision-pending-june-2026) came from a researcher modeling public-school districts running their own organizations. The part of the claim that does not depend on any model is the budget point, which Smith made and which is accurate: the credit is federal, the money is donated, and a state that participates spends nothing of its own. That is also why [uptake, not politics, is the real constraint](https://eftccredit.com/news/biggest-25f-risk-isnt-politics-its-uptake-july-2026) on what any of these numbers turn into. Meyer has said nothing publicly either way, and nothing in August changed that. Delaware's attorney general, Kathy Jennings, is separately elected, and her office signed the brief that Massachusetts and Minnesota led supporting Colorado in [the Supreme Court case whose amicus lineup tracks the §25F roster](https://eftccredit.com/news/state-ags-split-st-mary-roy-briefs-track-25f-roster-august-2026), which is about a state's power to attach conditions to privately delivered programs and is not a signal about the governor's decision here. Two of the states on that brief, Nevada and Virginia, are in §25F already. The honest read on Delaware is that the decision is open, it sits with one person, and the people asking have now been joined by a legislator who cannot introduce a bill until after the window closes. For anyone in Delaware thinking about the organization side, the useful thing to do while the state decides is the part that does not depend on the state. Our [SGO directory](https://eftccredit.com/sgos) lists no Delaware-based scholarship organization, and if Meyer elects in, Delaware does not just join a list, it has to hand Treasury the names of organizations that meet the federal test: 501(c)(3) status, scholarships for at least ten students who do not all attend the same school, and at least 90% of income spent on scholarships. Every one of those is work that happens before a state opens a door, which is exactly what operators in [Alaska](https://eftccredit.com/news/alaska-opens-sgo-applications-first-state-approvals-september-30-august-2026) and [Kentucky](https://eftccredit.com/news/kentucky-adams-files-federal-25f-opens-sgo-declaration-july-2026) learned when theirs opened with no filing window and a rolling review. Work through it with the [free SGO builder](https://eftccredit.com/build), read [how to start an SGO](https://eftccredit.com/learn/how-to-start-an-sgo), and track where Delaware stands on the [Delaware state page](https://eftccredit.com/states/delaware). The thing to watch between now and December is narrow and easy to check: a Form 15714 election from Delaware, or a statement from the governor's office explaining the decision either way. Whichever arrives, it will come from the governor's desk and not from the chamber floor. Sources: - Delaware House Republican Caucus: State Rep. Mike Smith urges Gov. Meyer to opt Delaware into the federal scholarship tax credit program (August 21, 2026; letter dated August 17, 2026): https://housegop.delaware.gov/2026/08/21/delaware-federal-scholarship-tax-credit-program/ - IRS: Federal Scholarship Tax Credit (FSTC), participating states for 2027 (list as of July 24, 2026; Delaware not included): https://www.irs.gov/government-entities/federal-state-local-governments/federal-scholarship-tax-credit-fstc - Delaware Constitution, Article II, § 4 (General Assembly convenes the second Tuesday of January unless otherwise convened by the Governor or by mutual call of the presiding officers): https://delcode.delaware.gov/constitution/constitution-03.shtml - 26 U.S.C. §25F(g), state list of scholarship granting organizations and who makes the election: https://www.law.cornell.edu/uscode/text/26/25F - Our archive: full text of §25F as enacted by Public Law 119-21, §70411: /documents/section-25f - Delaware Business Times: Viewpoint by Nancy Mercante, a $40 million opportunity for Delaware students, but only if Governor Meyer acts: https://delawarebusinesstimes.com/news/viewpoints/viewpoint-nancy-mercante/ Canonical: https://eftccredit.com/news/delaware-rep-smith-letter-meyer-25f-opt-in-august-2026 ### Alaska put the first date on the board: it means to approve its first SGOs by September 30, before Treasury's rules publish Date: 2026-08-20. Category: state-action. State: AK. Update, October 1, 2026: Treasury's temporary regulations, released October 1, set what a state must check before listing a new organization. Until the organization first reports to the IRS on meeting the operational requirements, a state may rely on its governing documents and written policies, but must determine that they expressly require those requirements "beyond a general requirement to comply with applicable law" and that the organization is able and intends to meet them. Every SGO must also register in the new IRS SGO portal once it opens. [Our read of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026). Thirty states have completed the advance election for the Education Freedom Tax Credit (also called the Federal Scholarship Tax Credit, ECCA, or [§25F](https://eftccredit.com/documents/section-25f)), and almost all of them are waiting on Treasury before they certify anyone. Two are not. Kentucky moved first, on July 22, when Secretary of State Michael Adams [signed a regulation opening the state's SGO declaration process](https://eftccredit.com/news/kentucky-adams-files-federal-25f-opens-sgo-declaration-july-2026), the mechanism KRS 14.125 makes his office use to build the list Kentucky owes Treasury. On August 20, 2026, Alaska became the second state to open a door, and added the thing Kentucky has not: a date by which it intends to walk people through it. Gov. Mike Dunleavy announced that the state is now accepting applications from nonprofit organizations seeking approval as K-12 Scholarship Granting Organizations, with the Department of Education and Early Development running the process. The application is deliberately small. An organization submits two things: a letter of interest signed by an authorized representative, and a copy of its IRS 501(c)(3) determination letter. The letter of interest has to attest that the organization meets, and will continue to meet, all applicable federal requirements for Scholarship Granting Organizations under §25F and any implementing federal regulations or guidance. Both go to SGO@alaska.gov. There is no form, no fee, and no filing window; applications are evaluated on a rolling basis. The timing is the part operators should read twice, because it is what actually separates Alaska from Kentucky. Alaska says it expects to approve its first group of SGOs by September 30, 2026, and describes that as being consistent with the forthcoming regulations from Treasury and the IRS. Those regulations are themselves expected by the end of September. So Alaska has set its first approval date against a rule that does not exist yet, and bridged the gap with the attestation: an approved organization is one that has certified in writing that it complies with the federal requirements, whatever their final text turns out to say. That is why the release adds that an approved SGO may rely on the state's approval and begin building, "subject to its continuing compliance with applicable federal requirements." Approval in Alaska is a place on a list, not a safe harbor against the rules Treasury has yet to write. What an approved Alaska SGO gets is real, and it is bigger than Alaska. Beginning January 1, 2027, an individual taxpayer may contribute to an approved SGO and take a dollar-for-dollar federal income-tax credit of up to $1,700, and the state's own announcement is explicit that this is open to taxpayers "in Alaska and across the country." That is the asymmetry we walked through recently: [donors can live anywhere, scholarships cannot](https://eftccredit.com/news/25f-state-lines-donors-anywhere-scholarships-in-state-august-2026). An Alaska-listed organization can raise from a donor in any state, including states that have declined to participate, and every one of those dollars must then fund scholarships for Alaska students. For an organization with a national donor base and an Alaska mission, being early on a list that exists is a genuine head start. The state also used the announcement to answer the question most organizations ask first, which is who this is for. Alaska's framing is that SGOs may take different forms: some will partner with a particular school or group of schools, others will work with education providers, serve a region or a particular educational need, or take applications from eligible students statewide regardless of where they learn. Commissioner Deena Bishop put the public-school half of that plainly, saying the program "can help a public school offer something that otherwise might remain beyond reach." The federal rules the release restates are the familiar ones: at least ten students who do not all attend the same school, and at least 90% of the organization's income spent on scholarships. It also makes the point that the $1,700 cap binds the donor and not the award, because an SGO pools contributions from many taxpayers, so individual scholarships may be considerably larger. It is worth noting how far this is from where Alaska stood in January. When Dunleavy made the state's [executive advance election](https://eftccredit.com/news/alaska-dunleavy-executive-opt-in-25f-january-2026), the state had no scholarship organizations and no announced plan to build any, and within days NEA-Alaska argued the move ran into the state's [constitutional no-aid clause](https://eftccredit.com/news/alaska-nea-no-aid-clause-challenge-25f-opt-in-january-2026). That dispute is unresolved and this announcement does not settle it; Bishop's position then and now is that §25F moves private charitable dollars rather than public funds. What has changed is that Alaska has gone from the state with the least infrastructure on the roster to one of only two with an open door, and the release cites an analysis putting roughly 95% of Alaska's K-12 students within the eligibility ceiling, consistent with [the first state-by-state estimates published in July](https://eftccredit.com/news/afc-51-7-million-students-eligible-25f-first-state-estimates-july-2026). For anyone organizing, the practical read is that the runway just got shorter in one state and is about to get shorter everywhere. If you are building an Alaska organization, the gating item is now your 501(c)(3) determination letter, because you cannot attest to federal compliance you have not organized for; our [free SGO builder](https://eftccredit.com/build) walks formation through that step. If you are building elsewhere, treat Alaska's two-document application as a preview of what a state list actually asks for, and have the answer ready when your state opens. Check where your state stands on the [participation map](https://eftccredit.com/states), read [how to start an SGO](https://eftccredit.com/learn/how-to-start-an-sgo), and see who is already organizing in the [SGO directory](https://eftccredit.com/sgos). Correction, August 25, 2026: this piece originally called Alaska the first state to open an SGO application process. That was wrong. Kentucky opened one on July 22, 2026, when Secretary of State Michael Adams signed a regulation establishing procedures for submitting, reviewing, and processing SGO filings, with a declaration form open to confirmed 501(c)(3) public charities. We had drawn a distinction between Kentucky's "state-level" declaration and a federal one, and the statute does not support it: [KRS 14.125](https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=57167) makes the Secretary of State the sole official authorized to submit the list described in 26 U.S.C. §25F(g) and requires him to send it to Treasury by January 1 of each year, so the declaration process is how Kentucky builds its federal list. What is accurate, and is the point of this piece, is that Alaska is the first state to commit to a date for approving its SGOs. Kentucky opened the door first; Alaska was first to say when it would walk people through. Sources: - Office of Gov. Mike Dunleavy: Alaska Opens Applications for K-12 Scholarship Granting Organizations (August 20, 2026): https://gov.alaska.gov/alaska-opens-applications-for-k-12-scholarship-granting-organizations/ - IRS: Federal Scholarship Tax Credit (FSTC), participating states for 2027 (list as of July 24, 2026; Alaska included): https://www.irs.gov/government-entities/federal-state-local-governments/federal-scholarship-tax-credit-fstc - 26 U.S.C. §25F, qualified elementary and secondary education scholarships (see subsections (c)(3), (d)(1), and (g)): https://www.law.cornell.edu/uscode/text/26/25F - Our archive: full text of §25F as enacted by Public Law 119-21, §70411: /documents/section-25f Canonical: https://eftccredit.com/news/alaska-opens-sgo-applications-first-state-approvals-september-30-august-2026 ### Your donors can live anywhere. Your scholarships can't: what §25F actually says about state lines Date: 2026-08-13. Category: analysis. Update, October 1, 2026: Treasury's proposed regulations settle the open points above. One organization may be listed by two or more states in which it is located if at least 85% of its activities are scholarship granting, it keeps a separate §25F account for each state, and it lets donors designate the state; "solely within the State" means the student lives there, so a resident of a covered state can use a scholarship from an SGO listed there at a school in another state. The $1,700 cap is per taxpayer, and spouses filing jointly count as separate taxpayers (up to $3,400 when each gives). [How the state-line rules work](https://eftccredit.com/news/give-to-any-of-30-states-25f-scholarships-follow-student-residence-october-2026). The question came to us this week from a school weighing whether to form a Scholarship Granting Organization. It has partner schools that would be natural pairings for one shared organization, but those schools sit in different states, some of which have opted into the program and some of which have not, and the alumni who would fund the whole thing are scattered across the country. Does the money have to come from in-state? Can it go out of state? It is a fair thing to be confused about, because every state-level tax-credit scholarship program that exists today is built around a state tax return, so geography is baked into the donor side. The Education Freedom Tax Credit (also called the Federal Scholarship Tax Credit, ECCA, or [§25F](https://eftccredit.com/documents/section-25f)) is built the other way around, and the statute settles both halves of the question in two short passages. Start with the donors, because this is the half people get wrong in the cautious direction. §25F(a) allows the credit to "an individual who is a citizen or resident of the United States," and that is the entire residency requirement. There is no condition that the donor live in the SGO's state, and no condition that the donor's own state have opted in. A graduate living in Oregon, which has affirmatively declined to participate, can give to a Virginia-listed SGO and claim the full credit on her federal return, because the election that matters is the one made by the state that listed the organization, not the one where the donor sleeps. The credit is capped at $1,700 per taxpayer (the statutory reading we walk through in [why the credit is $1,700, not $3,400](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026)), and §25F(b)(2) trims it by any state-level credit claimed for the same contribution, but neither limit has anything to do with where the donor lives. Now the other half, which people get wrong in the optimistic direction. §25F(c)(3) defines a qualified contribution as one the organization "uses to fund scholarships for eligible students solely within the State in which the organization is listed" under subsection (g). That single word "solely" is the geography of the whole program. An SGO listed by Virginia can accept a Texan's dollar and an Oregonian's dollar, but every one of those dollars can only become a scholarship for a Virginia student. There is no mechanism for a listed SGO to "send money" to students in another state, however worthy, because a contribution spent on out-of-state students stops being a qualified contribution at all, which puts the donor's credit and the organization's listing both at risk. Donations travel; scholarships do not. Put the two halves together and you get an asymmetry with real consequences for states still on the fence. A state that has not elected in has no list, so no SGO anywhere can award §25F scholarships to its students. But its residents remain federal taxpayers with a $1,700 credit available to them, and nothing stops them from giving to a listed SGO next door. Money flows out of a holdout state and never in, the dynamic we described when fact-checking the union campaign against the credit: [a state that sits out does not protect its kids, it exports their help](https://eftccredit.com/news/unions-voucher-label-25f-fact-check-july-2026). For a school network straddling a participating state and a holdout state, that cuts both ways: families at the holdout-state school cannot receive scholarships until their state elects in (where each state stands is on the [participation map](https://eftccredit.com/states)), but those same families can donate today to fund students at the participating-state school. What the statute does not settle is the multi-state organization. §25F(c)(3) speaks of "the State in which the organization is listed," in the singular, and nothing in the section says whether one entity can appear on two states' lists, or how its books must be kept if it does. The anti-comingling rule at §25F(c)(5)(B) already requires separate accounts for qualified contributions, and it is hard to see how a dual-listed organization satisfies the "solely within the State" test without running what amounts to a separate per-state pool, but that is inference, not rule. The organizational requirements in subsection (d), including scholarships for ten or more students who do not all attend the same school, are written at the level of the organization, yet every award still has to flow through some state's listing, so a sibling campus in a non-participating state cannot host recipients no matter how the entity is structured. This is squarely the kind of mechanic Treasury's forthcoming regulations need to address, and until they do ([no state has opened SGO certification yet](https://eftccredit.com/news/no-state-opened-sgo-certification-waiting-september-nprm-july-2026)), the prudent plan for a two-state school network is one listing per state and no promises of cross-state awards. For anyone building an SGO now, the practical read is that the donor map is the country and the scholarship map is your state, and most fundraising plans we see are sized to the wrong one. Alumni networks, out-of-state grandparents, and supporters in neighboring holdout states are all fully in play from day one, which for schools with a national footprint may be the single most underused asset in the program. Note that soliciting donations across state lines carries its own ordinary state-law obligations, like charitable solicitation registration, which §25F neither creates nor waives. If you are organizing now, the [free SGO builder](https://eftccredit.com/build) walks through formation step by step, the [participation map](https://eftccredit.com/states) tracks which scholarship maps exist yet, and the [SGO directory](https://eftccredit.com/sgos) shows who is already organizing in each state. Sources: - 26 U.S.C. §25F, qualified elementary and secondary education scholarships (see subsections (a), (b), (c)(3), (c)(5), (d), and (g)): https://www.law.cornell.edu/uscode/text/26/25F - Our archive: full text of §25F as enacted by Public Law 119-21, §70411: /documents/section-25f Canonical: https://eftccredit.com/news/25f-state-lines-donors-anywhere-scholarships-in-state-august-2026 ### A Senate bill would give joint filers a $3,400 §25F credit and index the cap to inflation Date: 2026-08-13. Category: federal-action. The most common question donors ask about the Education Freedom Tax Credit is whether a married couple gets $1,700 or $3,400. The statute caps the credit at $1,700 "to any taxpayer for any taxable year" and says nothing specific about joint returns, and Treasury has not ruled on it. On August 6, 2026, Sen. Cindy Hyde-Smith (R-MS) introduced a bill that would answer the question in the statute itself. Her office announced S. 5322, the Federal Tax Credit Scholarship Improvement Act, on August 13, and the bill was referred to the Senate Finance Committee. The bill is short. It replaces [§25F(b)(1)](https://eftccredit.com/documents/section-25f) with three subparagraphs. The first says the credit for any taxpayer for any taxable year may not exceed the "applicable amount (twice such amount in the case of a joint return)." The second sets the applicable amount at $1,700. The third indexes it to inflation for taxable years beginning after December 31, 2026, using the same cost-of-living adjustment that indexes the tax brackets with 2025 as the base year. Each increase is rounded to the nearest $50, and Treasury must publish the next year's limit by November 1. The bill would apply to taxable years beginning after December 31, 2025. The "twice such amount" language is the most important part of the bill, and it cuts in two directions. Congress uses that phrase when it wants a joint return to get double a figure. Its absence from current §25F is the main reason the prevailing reading, and [ours](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026), is $1,700 per return. The senator's office describes the current law the same way, calling $3,400 double the $1,700 limit that existing law allows. The bill would not settle anything unless it passes, though. Until Congress acts or Treasury rules, donors should plan on $1,700 per return and treat $3,400 for joint filers as unsettled. The [§25F regulations now under White House review](https://eftccredit.com/news/25f-rules-reach-oira-interim-final-temporary-regs-september-2026) are the nearer place an answer could appear. Here is where the bill stands. The introduced text lists no cosponsors, it has had no committee action, and the 119th Congress ends in January 2027, when unpassed bills die. Changes to tax credits usually travel inside larger tax packages rather than as standalone bills, so the realistic path for S. 5322 is as language someone lifts into a later vehicle. It is also not the only §25F bill in the Senate: a [repeal bill introduced in April](https://eftccredit.com/news/senate-democrats-introduce-ecca-repeal-bill-april-2026) would go the opposite way, and the credit remains law as enacted. For SGOs, the bill mainly signals what a mature version of the program could look like. Inflation indexing matters over time: a fixed $1,700 buys less each year, and this is the same approach the tax code already takes with brackets and the standard deduction. A doubled joint-return cap would roughly double the ask an SGO can make of a married household. None of that changes 2027 planning yet. Build donor materials around [$1,700 per return](https://eftccredit.com/learn/25f-donor-number), and we will report if S. 5322 moves or if Treasury's rules address joint filers first. Update, October 1, 2026: Treasury's proposed regulations reach the joint-return half of S. 5322 without legislation. Spouses filing jointly are treated as separate taxpayers, so a couple can claim up to $3,400 when each gives $1,700, and taxpayers may rely on the rule for 2027. Inflation indexing still requires Congress. [Our read of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026). Sources: - GovInfo: S. 5322 (IS), Federal Tax Credit Scholarship Improvement Act, introduced August 6, 2026, referred to the Committee on Finance: https://www.govinfo.gov/app/details/BILLS-119s5322is - S. 5322 full text (introduced in Senate): https://www.govinfo.gov/content/pkg/BILLS-119s5322is/html/BILLS-119s5322is.htm - Sen. Cindy Hyde-Smith: Hyde-Smith Bill Would Improve Federal Education Scholarship Tax Credit (August 13, 2026): https://www.hydesmith.senate.gov/hyde-smith-bill-would-improve-federal-education-scholarship-tax-credit - Congress.gov: S. 5322, 119th Congress: https://www.congress.gov/bill/119th-congress/senate-bill/5322 - 26 U.S.C. §25F(b)(1), dollar limitation: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/hyde-smith-s5322-joint-return-3400-inflation-25f-august-2026 ### The Supreme Court just set argument for November 3 in the case 43 members of Congress say will decide whether states can fence religious schools out of §25F Date: 2026-08-11. Category: federal-action. State: CO. Update, October 5, 2026: the Court granted the Solicitor General's August 31 motion on its October 5 order list. The United States will argue as amicus curiae on November 3, in divided argument with the parishes and Colorado. Update, October 1, 2026: Treasury's temporary regulations, released October 1, answer the §25F half of this question without waiting for the Court. A participating state "may not require SGOs to operate in a manner that is more restrictive than" §25F, "such as by limiting the type of school that scholarship recipients may attend," and must list every qualifying organization located in the state that asks to be included. St. Mary v. Roy itself, about Colorado's preschool program, is unaffected. [How the state rule works](https://eftccredit.com/news/one-national-standard-states-cannot-add-sgo-rules-25f-october-2026). The unresolved question hanging over the Education Freedom Tax Credit (also called the Federal Scholarship Tax Credit, ECCA, or [§25F](https://eftccredit.com/documents/section-25f)) is not whether the credit survives. It is how much a participating state may add on top of it. §25F asks a state to submit a list of Scholarship Granting Organizations, and says almost nothing about what a state may require before it puts an organization on that list. We have written about that gap as the question of whether §25F is a [federal floor or a federal ceiling](https://eftccredit.com/news/federal-floor-or-ceiling-25f-state-restrictions-june-2026). On August 11, 2026, the Supreme Court put a date on the case most likely to answer it: St. Mary Catholic Parish in Littleton, Colorado v. Roy, No. 25-581, is set for argument on Tuesday, November 3, 2026, eight weeks before the credit takes effect. The case itself has nothing to do with §25F. Colorado runs a universal preschool program that pays for families to send children to the preschool of their choice, public or private, and requires participating preschools to give every family an "equal opportunity" to enroll regardless of race, religious affiliation, sexual orientation, gender identity, income, or disability. Colorado grants a long list of exemptions from that requirement, including for preschools that serve only children of color, only low-income families, or only children with disabilities, but it excluded two Catholic parish preschools that admit only families who accept Catholic teaching on sex and marriage. The Tenth Circuit upheld the exclusion on September 30, 2025 (154 F.4th 752), holding that Colorado's secular exemptions and its discretion did not make the rule less than generally applicable under Employment Division v. Smith, and that Carson v. Makin did not apply because Colorado had not excluded anyone "on the explicit basis" of religion. The Court granted review on April 20, 2026, limited to two questions: what it takes to show a law is not generally applicable under Smith, and whether Carson applies only when a government excludes religious institutions explicitly. It declined to take the petition's third question, whether Smith should be overruled outright. The connection to the federal credit was drawn by Congress itself. On July 2, 2026, forty-three members of Congress, eight senators and thirty-five representatives, all Republicans, filed a brief supporting the Catholic parishes for one stated reason: if the Tenth Circuit's rule stands, it "will provide states a playbook to discriminate against religious organizations while doling out federal educational benefits." Their argument is mechanical rather than rhetorical. §25F money reaches families through state-designated SGOs, so a state that can attach conditions to a benefit program without triggering the Free Exercise Clause can attach the same conditions to its SGO list. As they put it, if Colorado can do this to preschools, "then states can attach nondiscrimination conditions to ECCA participation to effectively exclude religious schools." The brief names the two states that have already moved, and both are ones we cover. Vermont's [H.933, now 3 V.S.A. § 24](https://eftccredit.com/news/vermont-h933-restrict-25f-opt-in-june-2026), bars the state from designating an organization as an SGO unless, among other conditions, it "does not discriminate against any student because of race, color, religion, ancestry, national origin, sex, sexual orientation, gender identity, place of birth, crime victim status, or age or against a student with a disability" when awarding scholarships. Colorado's own [HB26-1292](https://eftccredit.com/news/colorado-house-kills-hb26-1292-sgo-guardrails-april-2026) would have gone further, extending the preschool conditions into K-12 and adding sex, sexual orientation, gender identity, and gender expression to what a participating school may not consider, with a carve-out for religious mission and instruction but not a full exemption. That bill died in committee 11-0, which is why Colorado will enter §25F without state-added restrictions. Vermont's language is on the books. The precedent runs toward the schools, and it is worth being precise about how far. Over the past decade the Court has held three times that a state may not exclude religious institutions from generally available public benefits: Trinity Lutheran v. Comer (2017) on playground resurfacing grants, Espinoza v. Montana Department of Revenue (2020) on a state tax-credit scholarship program, and Carson v. Makin (2022) on Maine's tuition program, the decision that makes [Maine's absence from §25F](https://eftccredit.com/news/maine-sidelined-25f-carson-v-makin-legislature-adjourns-june-2026) so odd. The United States filed in support of the parishes at both the petition and merits stages. What is genuinely open is whether that line extends to a facially neutral condition that reaches religious schools by effect rather than by name, which is exactly what the Tenth Circuit said it does not. A decision is likely by the end of June 2027, so §25F will run its entire first year before the answer arrives. None of this touches whether the credit exists, who may donate, or whether an organization can qualify as an SGO under federal law. §25F's requirements are federal and unchanged: 501(c)(3) status, scholarships for at least ten students who do not all attend the same school, and at least 90% of income spent on scholarships. What is at stake is the narrower question of what a state may demand before adding an organization to the list it sends Treasury, and that question only bites in states that have chosen to write conditions. So far one has. Vermont enacted its conditions while authorizing participation it has not completed, and Colorado's attempt died in committee, so none of the thirty states currently on the [IRS participation roster](https://eftccredit.com/states) has SGO conditions of this kind on the books. For anyone building now, the practical read is that this is a reason to keep going rather than to wait. Formation, 501(c)(3) status, donor systems, and school relationships are all federal or private questions the case does not reach, and the states most likely to write restrictive conditions are largely the states that have not opted in yet. If you are organizing in a state that has, work through the [free SGO builder](https://eftccredit.com/build), check where your state stands on the [participation map](https://eftccredit.com/states), and see who else is organizing in the [SGO directory](https://eftccredit.com/sgos). Argument is November 3; the Court posts live audio the same morning, and the questions the justices ask about general applicability will be the first real signal of how much room states have. Update, September 17, 2026: the case is now fully briefed. Colorado filed its brief on August 17, about two dozen amicus briefs were docketed between August 21 and August 24, the case was circulated to the justices on August 27, and the petitioners filed their reply on September 16. One docket entry is worth noting on its own: on August 31 the Solicitor General moved for leave to participate in oral argument as amicus curiae and for divided argument, which means the United States is asking for its own time at the lectern on November 3. The briefs filed that week come from most of the groups with a stake in how this rule is written, among them Public Funds Public Schools, the Freedom From Religion Foundation, the NAACP Legal Defense and Educational Fund, Massachusetts and other states, a group of members of Congress, and several sets of law and religion scholars. Nothing in the briefing changes the analysis above; it means the record the Court will decide on is closed. Sources: - Supreme Court of the United States: Docket for No. 25-581, St. Mary Catholic Parish in Littleton, Colorado v. Roy (August 11, 2026 entry: SET FOR ARGUMENT on Tuesday, November 3, 2026): https://www.supremecourt.gov/search.aspx?filename=/docket/docketfiles/html/public/25-581.html - Supreme Court of the United States: Questions presented, No. 25-581 (cert. granted April 20, 2026, limited to Questions 1 and 2): https://www.supremecourt.gov/qp/25-00581qp.pdf - Supreme Court of the United States: Docket for No. 25-581, merits briefing (respondents' brief August 17, 2026; amicus briefs August 21 to 24; circulated August 27; motion of the United States for divided argument August 31; petitioners' reply September 16): https://www.supremecourt.gov/docket/docketfiles/html/public/25-581.html - Brief for 43 Members of Congress as Amici Curiae in Support of Petitioners, St. Mary Catholic Parish v. Roy (filed July 2, 2026): https://becketnewsite.s3.amazonaws.com/20260702165825/43-Congresspeople-Amicus-Brief-in-St.-Mary-Catholic-Parish-v.-Roy.pdf - Vermont H.933 (2026), enacting 3 V.S.A. § 24, SGO designation conditions: https://legislature.vermont.gov/bill/status/2026/H.933 - Colorado HB26-1292, Scholarship Granting Organizations (postponed indefinitely, April 30, 2026): https://leg.colorado.gov/bills/HB26-1292 - 26 U.S.C. §25F, qualified elementary and secondary education scholarships: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/supreme-court-november-3-argument-state-conditions-religious-schools-25f-august-2026 ### Six Pennsylvania senators, including a Democrat, are writing the bill that would opt the state in without the governor Date: 2026-08-05. Category: state-action. State: PA. Pennsylvania is the largest state that has not decided whether to join the federal Education Freedom Tax Credit (also called the Federal Scholarship Tax Credit, ECCA, or [§25F](https://eftccredit.com/documents/section-25f)), and until now the decision has been discussed as one man's to make. On August 5, 2026, six state senators filed the paperwork that starts a second route. Senate co-sponsorship memo 49085, titled "Ensuring Pennsylvania's Participation in the Federal Scholarship Tax Credit Program," announces forthcoming legislation to put the commonwealth into the program by statute. The signers matter more than the memo's two paragraphs. The prime sponsor is Senate President Pro Tempore Kim Ward (R-39), joined by Majority Leader Joe Pittman (R-41), Appropriations Chair Scott Martin (R-13), Education Chair Lynda Schlegel Culver (R-27), and Sen. Judy Ward (R-30). The sixth name is Sen. Anthony Williams (D-8) of Philadelphia. That is the chamber's presiding officer, its majority leader, and the chairs of the two committees any such bill has to pass through, plus a Democrat, all attached to a bill before it has a number. The route they are taking is written into the federal statute. §25F(g) has a state's participation turn on an election made by the state, and Treasury's guidance has treated that as something a governor or a designated state official can file, which is how most of the thirty states on the [roster](https://eftccredit.com/states) got there. But a legislature can also direct it, and several states have already proven the point: North Carolina and Kansas and Kentucky are all in by acts of their legislatures over their governors' vetoes, [Tennessee directed its Department of Education to make the election by statute](https://eftccredit.com/news/tennessee-enacts-25f-enabling-law-public-chapter-720-homeschoolers-included-may-2026), and [Idaho](https://eftccredit.com/news/idaho-hb-731-codifies-25f-opt-in-march-2026) and [Oklahoma](https://eftccredit.com/news/oklahoma-hb-3704-codifies-25f-tax-commission-administrator-april-2026) each codified participation rather than leaving it to a press release. A Pennsylvania statute would put the commonwealth in the same category. Nothing about the memo makes that outcome likely on its own; a co-sponsorship memo is the earliest formal step there is, the bill has no number yet, and the House is controlled by the other party. The memo's argument is the one that has moved fence-sitting states all year, and it is about money leaving rather than money arriving. Because the credit belongs to the donor and not the state, a Pennsylvanian can claim it whether or not Pennsylvania participates. What participation determines is whether any Pennsylvania student can receive the resulting scholarship. As the memo puts it, without an election "these dollars will be sent to other states, bypassing Pennsylvania students." That is not rhetoric, it is the structure we walked through in detail this month: [donations travel across state lines and scholarships do not](https://eftccredit.com/news/25f-state-lines-donors-anywhere-scholarships-in-state-august-2026). The senators put the annual figure for Pennsylvania at hundreds of millions of dollars. Gov. Josh Shapiro has not committed either way, which the memo says directly. It is a genuinely open question rather than a refusal: Pennsylvania has run state tax-credit scholarships through its EITC and OSTC programs for two decades, Shapiro has supported and expanded them, and the commonwealth was already [rewriting that state framework this session with §25F in view](https://eftccredit.com/news/pennsylvania-hb2632-eitc-overhaul-bradford-25f-june-2026). The practical deadline is January 1, 2027, when the credit takes effect, and the election is made annually, so a state that misses the first year is not locked out of the second. For operators in Pennsylvania, the honest read is that nothing has changed yet and it is still worth preparing. There is no Pennsylvania SGO list to apply to, no state process to enter, and no federal listing available until the commonwealth elects in. What exists is a formation runway, and it does not depend on the outcome: 501(c)(3) status, a board, a scholarship policy, and school relationships are the same work in any state, and they are the work that takes months. Track the state on our [Pennsylvania page](https://eftccredit.com/states/pennsylvania), work through the [free SGO builder](https://eftccredit.com/build), and see who is already organizing in the [SGO directory](https://eftccredit.com/sgos). Sources: - Pennsylvania Senate co-sponsorship memo 49085, "Ensuring Pennsylvania's Participation in the Federal Scholarship Tax Credit Program" (filed August 5, 2026; Sen. Kim Ward and five co-sponsors): https://www.palegis.us/senate/co-sponsorship/memo?memoId=49085 - Pennsylvania Senate Republicans: PA Senators Support Empowering Parents with Federal Scholarship Tax Credit (August 5, 2026): https://www.pasenategop.com/news/pa-senators-support-empowering-parents-with-federal-scholarship-tax-credit/ - 26 U.S.C. §25F, qualified elementary and secondary education scholarships (see subsection (g), state election and SGO lists): https://www.law.cornell.edu/uscode/text/26/25F - IRS: Federal Scholarship Tax Credit (FSTC), participating states for 2027 (list as of July 24, 2026; Pennsylvania not included): https://www.irs.gov/government-entities/federal-state-local-governments/federal-scholarship-tax-credit-fstc Canonical: https://eftccredit.com/news/pennsylvania-senate-bipartisan-memo-25f-legislative-opt-in-august-2026 ### Thirteen education groups told Treasury its 90% rule would shut out the nonprofits best placed to run SGOs Date: 2026-07-30. Category: regulatory. Update, October 1, 2026: Treasury's proposed regulations measure the 90% test against an organization's total gross receipts, as the June preview said, unless at least 85% of its activities are scholarship granting, in which case the test applies to its §25F account. A foundation like the one in the example above, which spends most of its money on programs other than scholarships, would fall short of 85%, and Treasury says the safe harbor may require forming a new organization. The rules also let a state list an organization whose 501(c)(3) application is pending, under set conditions, and leave the expense list to separate section 530 guidance. [How the 85% safe harbor works](https://eftccredit.com/news/85-percent-safe-harbor-how-sgos-meet-90-percent-rule-25f-october-2026). Start with the rule at the center of this, because everything else follows from it. The Education Freedom Tax Credit (also called the Federal Scholarship Tax Credit, ECCA, or [§25F](https://eftccredit.com/documents/section-25f)) requires a Scholarship Granting Organization to spend at least 90% of its income on scholarships. The statute never says what counts as the organization's income. That sounds like a technicality. It is actually the question of who is allowed to be an SGO at all, because the answer decides whether an existing charity that does several things can run a scholarship program alongside its other work, or whether only a single-purpose scholarship entity can qualify. Our explainer on [the 90/10 rule](https://eftccredit.com/learn/sgo-90-10-rule-compliance) walks through the mechanics. In [its June preview of the forthcoming regulations](https://eftccredit.com/news/treasury-previews-25f-proposed-regulations-june-2026), Treasury indicated it expects the rules to "generally measure the 90-percent spending requirement against the organization's total receipts, unreduced by expenses." Read that against a real balance sheet. A community education foundation that raises $1,000,000 a year, of which $200,000 is §25F scholarship donations and $800,000 funds tutoring, teacher grants, and afterschool programming, would have to spend $900,000 on scholarships to clear a total-receipts test. It cannot. Under that reading it is not eligible to be an SGO, no matter how well it is positioned to run one. On July 30, 2026, thirteen national education organizations sent Treasury a letter saying exactly that. It is addressed to Kevin Salinger, the Deputy Assistant Secretary for Tax Policy who delivered the June preview, and it is signed by AASA (The School Superintendents Association), the Association of Education Service Agencies, the Association of School Business Officials International, the National Rural Education Association, the Afterschool Alliance, the Campaign for Grade-Level Reading, the National Summer Learning Association, Accelerate, the Children's Funding Project, the National Association of Education Foundations, the National Institute of Early Education Leadership, the Give Forward Foundation, and Civitas Strategies. The framing is worth noting: these are groups representing superintendents and school business officials, and the letter is not an argument against the credit. It asks Treasury to adopt what it calls the best reading of the statute so that more organizations can participate, and says so plainly, that the recommendations would "dramatically increase the ability of students" in participating states to use the program. Their fix for the 90% question is specific. The statute already requires an SGO to hold §25F contributions in a segregated account, and the coalition argues that account is the natural measure of the organization's §25F income. Measure the 90% against the segregated account, they write, and the rule still does the work Congress intended, which is to stop an SGO from spending more than 10% of donors' money on overhead. They also point out that Treasury already previewed a safe harbor along these lines for organizations whose "activities are largely scholarship-granting activities," and ask it to extend that approach to all SGOs. Their warning about the alternative is blunt: charities would stop accepting other donations meant for the same students purely to satisfy the ratio, and Treasury "should avoid such a zero-sum result." The other four recommendations matter just as much to anyone standing up an organization now. First, on timing: Treasury should let a state list a prospective SGO while its 501(c)(3) application is still pending at the IRS, perhaps with a special designation that converts once the determination letter arrives. The coalition's reasoning is that IRS processing times are unpredictable and the program starts January 1, 2027, so a slow determination could otherwise cost an organization a full year. They also ask Treasury to explain how a brand-new organization with no scholarship track record can qualify under §25F(c)(5) and (d), and how one SGO could transfer donations to another if it turns out it cannot operate. If you are weighing whether to convert an existing nonprofit or start fresh, our guides on [converting an existing nonprofit](https://eftccredit.com/learn/existing-nonprofit-to-sgo) and [starting an SGO](https://eftccredit.com/learn/how-to-start-an-sgo) cover the trade-off. The last three recommendations are about what the money can buy. §25F borrows its definition of qualified expenses from the Coverdell rules at [§530(b)(3)](https://eftccredit.com/documents/section-530-b3-coverdell-expenses), which include "supplementary items and services." The coalition wants that read broadly enough to cover afterschool, summer school, weekend, enrichment, work-based, and dual-enrollment programs, and wants guidance on eligible expenses released before or at the same time as the proposed regulations, on the grounds that donors and providers cannot plan without it. It argues a supplementary service need not be delivered by school staff inside a school building, only that some nexus exist between the school and the provider, whether by contract, memorandum of understanding, or a district list of recommended providers. And it asks Treasury to confirm that state law controls the definition of "school," including in states where students attend public pre-kindergarten. Our explainer on [qualified expenses](https://eftccredit.com/learn/qualified-expenses-25f) tracks where this currently stands. Two things make this letter worth watching rather than filing away. One is who sent it. Public-school organizations engaging Treasury on the mechanics of the credit is a different posture from opposing it, and it lines up with the case we covered when [North Carolina looked at public-school-serving SGOs](https://eftccredit.com/news/north-carolina-stein-public-school-sgo-pivot-25f-june-2026). The other is timing. Treasury has said proposed regulations are due by the end of September 2026, and its own Unified Agenda filings suggest [the startup rules may arrive already final](https://eftccredit.com/news/treasury-unified-agenda-25f-interim-final-rule-sgo-lists-fall-2026), with comments collected afterward. If that holds, letters like this one are the input Treasury actually receives before the rules bind, which makes the pre-publication window the real comment period. For operators, the practical read is that the definition of income is still open and worth planning around rather than assuming. If your organization does more than grant scholarships, model both readings before you decide whether the §25F program lives inside your existing entity or in a new one, because the answer changes which is viable. [No state has opened SGO certification yet](https://eftccredit.com/news/no-state-opened-sgo-certification-waiting-september-nprm-july-2026), so nothing is lost by waiting on the rules, and a great deal is lost by building an entity structure the final rule does not permit. Check where your state stands on the [participation map](https://eftccredit.com/states), see who is already organizing in the [SGO directory](https://eftccredit.com/sgos), and work through formation with the [free SGO builder](https://eftccredit.com/build). Sources: - AASA and 12 co-signing organizations: Letter to Treasury Deputy Assistant Secretary Kevin Salinger on Federal Scholarship Tax Credit regulations and guidance (July 30, 2026): https://www.aasa.org/docs/default-source/advocacy/july-30-letter-to-treasury-on-federal-scholarship-tax-credit-regulations-guidance.pdf - U.S. Treasury: Preview of Forthcoming Section 25F Guidance, remarks by DAS Kevin Salinger (PDF): https://home.treasury.gov/system/files/136/Preview-of-Forthcoming-Guidance.pdf - Our archive: Treasury's §25F guidance preview: /documents/treasury-25f-guidance-preview - 26 U.S.C. §25F, qualified elementary and secondary education scholarships: https://www.law.cornell.edu/uscode/text/26/25F - 26 U.S.C. §530(b)(3), qualified elementary and secondary education expenses (Coverdell definition incorporated by §25F): https://www.law.cornell.edu/uscode/text/26/530 Canonical: https://eftccredit.com/news/public-school-coalition-treasury-letter-90-percent-rule-july-2026 ### There may be no comment period on the §25F rules. Treasury's own paperwork says they take effect the day they publish. Date: 2026-07-29. Category: regulatory. Update, October 1, 2026: both rules were released October 1. The temporary regulations (T.D. 10057), covering state elections, SGO lists, IRS registration, and donor acknowledgments, apply from September 1, 2026 with no prior comment period. The proposed regulations, which carry the substantive rules, take comments until December 1, 2026, with a public hearing scheduled for December 15, and taxpayers, SGOs, and states may rely on them for 2027 contributions. [How to comment](https://eftccredit.com/news/25f-rules-comments-due-december-1-hearing-december-15-october-2026). Start with the background. Congress created the Education Freedom Tax Credit last summer, but a law on paper cannot run by itself. Before anyone can use it, the IRS has to write the detailed rules: which organizations count as Scholarship Granting Organizations, how a state certifies them, what paperwork a donor needs to claim the credit. Everyone in this world has been told to expect those rules the normal way. Treasury said in [its June preview](https://eftccredit.com/news/treasury-previews-25f-proposed-regulations-june-2026) that a draft would come out by the end of September, the public would get to comment on it, and only after that would anything become final. States, scholarship organizations, and advisors have planned their fall around commenting on that draft. This story is about a government document that says the plan may be different. Here is what we found. Twice a year, the federal government publishes a master list of every rule each agency is working on, called the Unified Agenda. It is dry, official, and almost nobody reads it. The newest edition came out July 3, and it contains the first two entries ever filed for this program: [RIN 1545-BR97](https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202510&RIN=1545-BR97) and [RIN 1545-BS17](https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202510&RIN=1545-BS17) (a RIN is just the government's tracking number for a rule). Both entries carry the same three words in their timetable: Interim Final Rule. The two entries are not duplicates. Read the fine print and they split the work in two. One covers the startup mechanics: how states make their elections, how SGO lists get submitted this fall, and how donations are tracked starting January 1, 2027. The other covers the bigger substantive rules, things like enforcement and recordkeeping, and Treasury's own summary of that one still uses the phrase "proposed regulations." So the most likely reading is that the rules needed to get the program running arrive already final, while the fuller rulebook may still get a normal draft-and-comment round later. We have [archived both entries word for word](https://eftccredit.com/documents/unified-agenda-25f-rin-entries) so you can read exactly what Treasury filed. Those three words are the whole story. A proposed rule, the thing everyone is expecting, is a draft. It binds nobody. The public gets a month or two to point out problems, the agency is legally required to respond, and only then does a final version take effect. An interim final rule skips the draft stage. It is legally binding the day it is published, and comments are collected afterward, once everyone is already living under it. The difference, in plain terms: one says "here is what we are thinking, tell us what you think." The other says "these are the rules, effective today, complaints welcome." If the agenda entries hold, the comment period everyone is planning for will not happen before the rules take effect. Why would Treasury do that? Its own filing explains. The temporary rules are "necessary to provide the procedure for States to make an Election, and to submit the State's SGO List in the Fall of 2026 to complete an Election or perfect an Advance Election, before Final regulations will be published." Translated: [the law](https://eftccredit.com/documents/section-25f) wants every participating state to hand Treasury its list of approved scholarship organizations around January 1, 2027, and there is no way to publish a draft in September, run a comment period, answer the comments, and still have binding rules in time. Skipping the draft stage solves Treasury's deadline problem. To be clear about what this does not mean: the credit itself still starts with donations made on or after January 1, 2027, not a day earlier. The only thing that moves up is the rulebook deciding who gets to participate. Could this be nothing? Possibly, and we want to be straight about that. The Unified Agenda is a statement of plans, not a promise. Both entries say "Legal Deadline: None," the July date they projected has already passed with nothing published, and the text may have been written before Treasury's June preview. Treasury could still go the normal draft route. But this is also the government's formal channel for declaring what it intends to do, and both entries say the same thing. We will know for certain at the last step in the process: before any major rule can be published, it must be cleared by a small White House office called OIRA, and the label the rule wears when it lands there will settle the question. It has not landed yet. We re-checked every fact in this story against the government's own database, reginfo.gov, before publishing. So what can anyone actually do? If the comment period disappears, one door stays open, and almost nobody outside Washington knows it exists. While a rule is sitting at OIRA for that final review, a standing executive order gives any affected member of the public the right to request a meeting about it: a scholarship organization, a school association, a state agency, a tax advisor, anyone. You fill out a form on [reginfo.gov](https://www.reginfo.gov/public/do/eom12866Search) with the RIN and your topic, and OIRA schedules a call. The Treasury attorneys writing the rule typically listen in. You do not get to see the draft, but you get about half an hour to explain what will break if the rule is written a certain way, and to hand over a short memo that lands in front of the people writing it. For example: the law says an SGO must spend at least 90 percent of its income on scholarships, but never says how that is measured for an organization in its first year. That is the kind of question worth raising while the text can still change. As of this writing, not one meeting has been requested on either §25F rule. Comments after publication still count, Treasury has to address them in the eventual final version, but by then the rules are already in force. We check the OIRA list every day and will report the moment either rule arrives, including which label it carries, because that is what proves or breaks this reading. If you are building an SGO, the practical takeaway is simple: the certification rules may arrive suddenly and already final, so be ready before September, not after. Start with our [guide to starting an SGO](https://eftccredit.com/learn/how-to-start-an-sgo), check your state on the [participation map](https://eftccredit.com/states), and see who is already organizing in the [SGO directory](https://eftccredit.com/sgos). Update, September 11, 2026: settled, and more precisely than this story could claim in July. Treasury sent both rules to OIRA on September 10, 2026, and they arrived with different labels. RIN 1545-BS17, the temporary regulations covering state elections, this fall’s SGO lists, and contribution tracking, is filed at the [interim final rule stage](https://eftccredit.com/news/25f-rules-reach-oira-interim-final-temporary-regs-september-2026) and binds on publication. RIN 1545-BR97, covering enforcement, recordkeeping, and information reporting, is filed as an ordinary proposed rule and takes comments first. The reading this story called most likely is the one Treasury filed: the rules needed to start the program arrive already final, while the fuller rulebook gets a normal comment round. The question in the headline now has a two-part answer. There is no comment period before the certification rules take effect. There is one before the substantive rules do. Sources: - OIRA Unified Agenda, RIN 1545-BS17 (TREAS/IRS): temporary regulations, Tax Credit for Contributions of Individuals to Scholarship Granting Organizations, REG-117199-25, timetable Interim Final Rule 07/2026: https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202510&RIN=1545-BS17 - OIRA Unified Agenda, RIN 1545-BR97 (TREAS/IRS): proposed regulations under IRC 25F, REG-117199-25, timetable Interim Final Rule 07/2026: https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202510&RIN=1545-BR97 - Reginfo.gov: 2026 Regulatory Plan and Unified Agenda (published July 3, 2026): https://www.reginfo.gov/public/do/eAgendaMain - Our archive: both Unified Agenda entries reproduced verbatim, field for field: /documents/unified-agenda-25f-rin-entries - WVVA: Virginia is first state to opt in; Youngkin's initial list of eight SGOs sent to Treasury and the IRS (January 9, 2026): https://www.wvva.com/2026/01/09/virginia-is-first-state-opt-federal-education-freedom-tax-credit-what-that-means-families/ - Reginfo.gov: IRS rules pending EO 12866 review at OIRA (checked July 29, 2026; §25F rules not among them): https://www.reginfo.gov/public/do/eoAdvancedSearchMain - U.S. Treasury: Preview of Forthcoming Section 25F Guidance (proposed regulations expected by end of September 2026): https://home.treasury.gov/system/files/136/Preview-of-Forthcoming-Guidance.pdf - 26 U.S.C. §25F(h), regulations and guidance authority: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/treasury-unified-agenda-25f-interim-final-rule-sgo-lists-fall-2026 ### Nearly 92% of American schoolchildren qualify for a §25F scholarship. The first state-by-state numbers are out. Date: 2026-07-28. Category: analysis. Anyone planning around the Education Freedom Tax Credit has been working without a basic number: how many children can actually receive one of these scholarships. The statute sets the test at 300% of area median income, but nobody had run that test against real population data state by state, so operators sizing a program, schools deciding whether to participate, and governors weighing an opt-in have all been guessing. On July 28 the [American Federation for Children published the first estimates](https://www.federationforchildren.org/new-estimates-project-that-52-million-k-12-students-eligible-for-the-education-freedom-tax-credit-eftc/), by senior fellow Patrick Graff, built from Census population estimates, the American Community Survey, HUD income limits, and 2026 Household Pulse data. The headline figure is 51.7 million eligible students, which is 91.7% of the country's school-age children. That is not a rounding artifact, it is what a 300%-of-area-median-income ceiling does. AFC puts the resulting income limit for a family of four somewhere between roughly $234,000 and nearly $500,000 depending on where that family lives. The state-level range is narrow at the top: from 85.9% in the District of Columbia to 96.2% in Maine. In other words, §25F is not means-tested the way most people assume when they hear the words "scholarship" and "income limit." In practice it excludes the top slice of earners in expensive metros and almost nobody else. Our explainer on [who qualifies for a §25F scholarship](https://eftccredit.com/learn/scholarship-eligibility) walks through how the AMI test is applied to a single household. The half of the analysis that matters politically is the split. AFC counts 31 states as in or committed as of July 2026, home to 30.9 million eligible students, which is 59.8% of the national total. That leaves 20.8 million eligible children in the states and the District of Columbia that have not joined. AFC's 31 lines up with our own [participation map](https://eftccredit.com/states): 30 states have completed the federal advance election and appear on the IRS roster, and New York has announced its intent without filing. AFC also flags that for 20.5 million of those students the credit would be the first private-school-choice program their state has ever had, because 18 states run no ESA, voucher, or tax-credit scholarship of their own. Two honest caveats before anyone quotes the number. First, eligible is not funded. Every donor is capped at $1,700 per taxpayer per year, so the binding constraint on how many children get a scholarship is donor dollars raised, not how many qualify, which is the same point we made about [uptake being the real risk](https://eftccredit.com/news/biggest-25f-risk-isnt-politics-its-uptake-july-2026). An operator who reads 51.7 million as a market is reading it wrong; the number tells you your outreach is not limited by an income screen, not that the money is there. Second, AFC's counts assume homeschool rules will defer to each state's law on the legal status of homeschool students. That assumption is doing real work in some states and it is [not settled yet](https://eftccredit.com/news/homeschool-25f-eligibility-gap-half-cant-spend-2026), so treat the homeschool share of any state's figure as provisional until the federal rules land. The practical use of this data is narrower and more useful than the headline. If you are forming an SGO, the question is not the national total, it is your own state's eligible population set against whether your state is in, because a large eligible population in a state that has not opted in is not a market until the governor files. Check your state on the [participation map](https://eftccredit.com/states), see who is already organizing in the [SGO directory](https://eftccredit.com/sgos), and if you are starting from nothing, our [free SGO builder](https://eftccredit.com/build) walks the formation and compliance steps. The eligibility ceiling being this high changes who you can credibly ask for applications, which changes how you should be [recruiting donors](https://eftccredit.com/learn/recruiting-donors-for-your-sgo) between now and January 1, 2027. Sources: - American Federation for Children: New Estimates Project that nearly 52 million K-12 Students Eligible for the Education Freedom Tax Credit (EFTC) Scholarship Beginning in 2027 (July 28, 2026), analysis by Patrick Graff: https://www.federationforchildren.org/new-estimates-project-that-52-million-k-12-students-eligible-for-the-education-freedom-tax-credit-eftc/ - Accounting Today: 51.7M children qualify for Education Freedom Tax Credit: https://www.accountingtoday.com/news/51-7m-children-qualify-for-education-freedom-tax-credit - IRS: Federal Scholarship Tax Credit (FSTC), participating states for 2027 as of July 24, 2026 (30 states): https://www.irs.gov/government-entities/federal-state-local-governments/federal-scholarship-tax-credit-fstc - 26 U.S.C. §25F, qualified elementary and secondary education scholarships: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/afc-51-7-million-students-eligible-25f-first-state-estimates-july-2026 ### The IRS roster reaches 30 states, and for the first time the official count matches our map Date: 2026-07-27. Category: regulatory. State: KY. The federal roster has caught up. On July 27, 2026 the IRS updated its Federal Scholarship Tax Credit (FSTC / ECCA / §25F) page with a participating-states list current as of July 24, and Kentucky now appears on it. That brings the official count of completed advance elections to 30 states, up from the 29 the page showed after [Kansas filed on July 7](https://eftccredit.com/news/kansas-completes-federal-25f-filing-irs-roster-29-july-2026), and it lands five days after [Secretary of State Michael Adams signed Kentucky's election in Frankfort on July 22](https://eftccredit.com/news/kentucky-adams-files-federal-25f-opens-sgo-declaration-july-2026). The roster has now moved 27 to 28 to 29 to 30 in seven weeks. The more useful fact for anyone tracking this program is what the update does to the arithmetic. All year there have been two accurate counts in circulation, and we have been careful to publish both: the IRS's official list of completed federal filings, and our own [participation map](https://eftccredit.com/states), which also counted states that were in by state law but whose executive branch had not yet filed the federal paperwork. Kentucky was the last state sitting in that gap, having joined in March when the legislature [overrode Gov. Andy Beshear's veto of House Bill 1](https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026). With its filing recorded, the two lists have converged: the IRS names 30 states, our map names 30 states, and the two sets are identical, state for state. One state remains outside both counts and is worth naming precisely. New York has [announced that it will participate](https://eftccredit.com/news/new-york-governor-hochul-opts-in-may-2026), but no advance election has been filed, so it appears on neither the federal roster nor our opted-in tally; we track it as committed. If and when New York files, the count goes to 31. Every other movement from here has to come from a state that has not yet decided, which is why the [governors still weighing the question](https://eftccredit.com/news/democratic-governors-split-on-25f-2026) are the group to watch between now and the January 1, 2027 launch. It is also worth being clear about what a roster entry does and does not buy. A completed advance election means the state has told the IRS it is in for 2027; it does not mean the state has certified a single Scholarship Granting Organization. Every participating state still owes Treasury a list of qualifying SGOs, and [no state has opened federal SGO certification](https://eftccredit.com/news/no-state-opened-sgo-certification-waiting-september-nprm-july-2026), because the rules governing who qualifies arrive with the proposed §25F regulations Treasury expects to issue by the end of September. Kentucky is furthest along on the state side, having opened its own SGO declaration process on July 22, and North Carolina has [named NCSEAA as its certifying office in statute](https://eftccredit.com/news/north-carolina-ncseaa-certifying-office-statutory-deadline-july-2026). The rest of the roster is a list of states that have committed to a program whose plumbing is still being drawn. For donors and families, the practical read is simple: in 30 states, a 2027 contribution to a qualifying SGO is on track to earn the dollar-for-dollar federal credit of up to $1,700, and the federal record now says so without a footnote. For operators, the roster is the map of where demand will be legal on day one, and the September regulations are the gun that starts the certification race. Check your state on the [participation map](https://eftccredit.com/states), start with our [guide to starting an SGO](https://eftccredit.com/learn/how-to-start-an-sgo) if you are building one, and see who is already organizing in the [SGO directory](https://eftccredit.com/sgos). Sources: - IRS: Federal Scholarship Tax Credit (FSTC) participating states for 2027, list as of July 24, 2026 (page updated July 27, 2026; 30 states including Kentucky): https://www.irs.gov/government-entities/federal-state-local-governments/federal-scholarship-tax-credit-fstc - IRS IR-2026-76: More than half the U.S. states signed up to participate (June 8, 2026; the 27-state baseline): https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill - IRS: Form 15714, advance election for the Federal Scholarship Tax Credit: https://www.irs.gov/forms-pubs/about-form-15714 - Kentucky Secretary of State Michael Adams enrolls Kentucky and opens the SGO declaration process (July 22, 2026), via The Advocate-Messenger: https://amnews.com/2026/07/22/kentucky-joins-2025-one-big-beautiful-bill-act-through-scholarship-tax-credit/ Canonical: https://eftccredit.com/news/irs-roster-30-states-kentucky-added-official-count-july-2026 ### North Carolina named NCSEAA its SGO certifying office, and wrote a deadline that runs on Treasury's clock Date: 2026-07-24. Category: state-action. State: NC. Update, October 1, 2026: the federal rules were released October 1 and publish in the Federal Register October 2, which puts the outer edge of NCSEAA's 120-day rulemaking window at the end of January 2027. Under Treasury's temporary regulations, North Carolina must submit its 2027 SGO list by February 15, 2027, or no North Carolina organization qualifies for 2027. Whether home school expenses qualify still turns on state law and Treasury's separate section 530 guidance, which is not out yet. [The 2027 calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). When North Carolina's legislature [completed its veto override of House Bill 87 on June 3](https://eftccredit.com/news/north-carolina-senate-completes-stein-veto-override-june-2026), the coverage focused on the politics: a third state joining the federal Education Freedom Tax Credit (FSTC / ECCA / §25F) over its governor's objection. Read the enacted text of Session Law 2026-6, though, and the more consequential story is administrative. North Carolina did not just opt in. It wrote the program's state-side machinery into statute: a named certifying office, a published-list requirement, and a rulemaking deadline, all before Treasury has issued a single regulation. Only [Kentucky, which handed the same job to its Secretary of State in March](https://eftccredit.com/news/kentucky-sgo-registry-secretary-of-state-adams-hb1-march-2026), has gone as far in its enacted text, and the two states solved the problem in opposite ways. The office is the North Carolina State Education Assistance Authority, NCSEAA, the same agency that runs the state's Opportunity Scholarship program. New G.S. 116-204(14) empowers the Authority "to certify and submit a list of qualifying scholarship granting organizations to the Secretary of the Treasury," and new G.S. 116-209.111 requires it to publish that list on its own website, certify its authority to act for the State, and, if useful, bring in the Department of Revenue by agreement. For [Scholarship Granting Organization](https://eftccredit.com/learn/sgo-guide) founders, this answers a question that remains open in most opted-in states: in North Carolina, you now know exactly which agency's door to watch. Kentucky answered the same question by routing everything to an independently elected Secretary of State, a design meant to keep a hostile governor away from the paperwork. North Carolina, which also joined over a veto, instead handed the job to the existing scholarship agency. Then comes the sentence that explains the national holding pattern. Section 3 of the law directs NCSEAA to "establish any necessary rules by July 1, 2026, or within 120 days of the publication of federal regulations, whichever is later." July 1 came and went with no federal regulations, so the first arm of that formula passed inert by design, and the deadline now floats downstream of Washington: the state's clock starts only when Treasury's rules publish. With the proposed §25F regulations expected around the end of September, North Carolina's own statute contemplates state rulemaking finishing well after the program's January 1, 2027 start. We wrote earlier this month that [no state has opened federal SGO certification because everyone is waiting on the September proposed rule](https://eftccredit.com/news/no-state-opened-sgo-certification-waiting-september-nprm-july-2026), and that still holds even after [Kentucky opened its own state-level SGO declaration on July 22](https://eftccredit.com/news/kentucky-adams-files-federal-25f-opens-sgo-declaration-july-2026). North Carolina is one of the few to have written that dependency into the text of an enacted law rather than leaving it to a press office's shrug. One more clause deserves attention from a specific audience. Section 4 provides that listed SGOs "may provide scholarships for any qualified elementary or secondary education expense, including home school expenses, to the extent allowed under federal law." That is an explicit statutory welcome for homeschool families, in a program where [homeschool access varies sharply by state](https://eftccredit.com/learn/homeschool-eligibility-by-state) because federal scholarship dollars can only flow to what each state treats as a school. North Carolina's drafters chose to name home schooling in the statute itself, which is about as clear a signal of intent as state law can send while federal definitions remain unsettled. The pro-adoption read is straightforward: North Carolina has already built what most opted-in states have not even sketched. The office is named, its duties are enacted, the homeschool question is answered in text, and the only missing input is the federal rule. When Treasury's regulations land, NCSEAA's 120-day clock starts and organizations will have a designated agency, not a guess, to apply to. Operators positioning for that moment can start with our [guide to starting an SGO](https://eftccredit.com/learn/how-to-start-an-sgo), track the state on our [North Carolina page](https://eftccredit.com/states/north-carolina), and see who is already organizing in the [SGO directory](https://eftccredit.com/sgos). Update, September 17, 2026: NCSEAA has published an SGO page of its own, and what it mostly confirms is that there is still nothing to apply to. The page says "federal regulations have not been finalized, and limited information regarding program requirements and administration is available," points readers to [Treasury's preview of the proposed regulations](https://eftccredit.com/news/treasury-previews-25f-proposed-regulations-june-2026) and the Department of Education's FAQ, promises updates as the federal rules finalize, and gives SGO_NC@ncseaa.edu for questions. That address is currently the whole of North Carolina's SGO intake. Meanwhile the 120-day arithmetic in Section 3 has stopped being hypothetical: the §25F rules [reached OIRA on September 10](https://eftccredit.com/news/25f-rules-reach-oira-interim-final-temporary-regs-september-2026) and were still under review a week later, so a publication at the start of October would put the outside edge of NCSEAA's rulemaking window at the end of January, and a later publication pushes it into February. Either way the state's own deadline can legally fall after donations begin on January 1. That is the statute working exactly as drafted rather than a delay, but an organization planning to be on North Carolina's first list should expect to be preparing while the rules are still being written. Sources: - NCSEAA: Scholarship Granting Organizations (SGOs) program page (September 2026, federal regulations not finalized; questions to SGO_NC@ncseaa.edu): https://www.ncseaa.edu/2026/09/scholarship-granting-organizations-sgos/ - N.C. Session Law 2026-6 (House Bill 87), enacted over veto June 3, 2026: §25F election, NCSEAA certification duty, rulemaking deadline, and home school clause: https://www.ncleg.gov/EnactedLegislation/SessionLaws/PDF/2025-2026/SL2026-6.pdf - NC General Assembly: House Bill 87 bill history (2025-2026 session): https://www.ncleg.gov/BillLookUp/2025/H87 - NC State Education Assistance Authority (NCSEAA): https://www.ncseaa.edu/ - 26 U.S.C. §25F (federal Education Freedom Tax Credit): https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/north-carolina-ncseaa-certifying-office-statutory-deadline-july-2026 ### Kentucky files its federal §25F election and becomes the first state to open its SGO sign-up Date: 2026-07-22. Category: state-action. State: KY. Kentucky has done the thing it spent the spring setting up to do. At a Frankfort news conference on July 22, 2026, Secretary of State Michael Adams signed the paperwork completing Kentucky's federal advance election for the Education Freedom Tax Credit (FSTC / ECCA / §25F) with the IRS, and, in the same appearance, signed a state regulation that opens Kentucky's process for organizations to declare themselves Scholarship Granting Organizations (SGOs). "This President, Congress, General Assembly and Secretary of State have Kentucky students' backs," Adams said, adding that "all eligible Kentucky students, public, private and home-schooled, will soon have access to better and more affordable education." The filing closes the one thread our roster coverage has left dangling: after Kansas [completed its own election in early July](https://eftccredit.com/news/kansas-completes-federal-25f-filing-irs-roster-29-july-2026), Kentucky was the last veto-override state whose formal federal filing was still outstanding. That the filing came from the Secretary of State, and not the governor, is the whole point of how Kentucky joined. Kentucky reached §25F over Gov. Andy Beshear's objection: he vetoed [House Bill 1 on March 13 and the legislature completed its override four days later](https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026). Knowing an opposed governor would then be asked to administer a program he had just tried to kill, HB 1 routed the annual federal election and the state's SGO registry through the [independently elected Secretary of State](https://eftccredit.com/news/kentucky-sgo-registry-secretary-of-state-adams-hb1-march-2026) instead. In March we wrote that operators should watch that office, not the governor's, for the application process. July 22 is that design being exercised: the official the statute empowered filed the election and opened the door, and the governor's opposition never touched the paperwork. The roster arithmetic should be stated carefully, because two accurate counts still sit side by side. The IRS's official list of completed advance elections was last published showing 29 states and does not yet include Kentucky; a government roster updates on its own schedule, so expect a lag before the federal page reflects this filing. Our own [participation map already counts Kentucky among 30 opted-in states](https://eftccredit.com/states), because Kentucky has been in by state action since the override. What changed on July 22 is that the gap between those two numbers is now closing from Kentucky's side: the state has filed, and the official roster will catch up. That leaves New York as the remaining state that has [announced it will participate](https://eftccredit.com/news/new-york-governor-hochul-opts-in-may-2026) but not yet filed its election. Update, July 27, 2026: the IRS page has caught up. Its participating-states list, current as of July 24, now includes Kentucky, bringing the [official count to 30 and matching our map exactly](https://eftccredit.com/news/irs-roster-30-states-kentucky-added-official-count-july-2026). The second signature is the one SGO founders should read closely. The regulation Adams filed establishes how Kentucky will accept, review, and process SGO filings, and it opens that process now: nonprofit entities, including out-of-state nonprofits, with confirmed 501(c)(3) public-charity status may file the SGO declaration form in person or by mail, with an online option through the Secretary of State's Fast Track portal to follow shortly. Kentucky's list of declared SGOs goes to the federal government by January 1, 2027, the date the program goes live and qualifying donations can begin. This makes Kentucky the first state to open any SGO sign-up step at all. It is worth being precise about what that does and does not mean: everywhere else, SGO participation is still gated on Treasury's proposed §25F regulations, expected at the end of September, which is why [no state has opened federal SGO certification](https://eftccredit.com/news/no-state-opened-sgo-certification-waiting-september-nprm-july-2026). Kentucky has opened its own state-level declaration, getting organizations into line under state law, while the federal qualification rules still arrive on the national clock. For a Kentucky nonprofit weighing whether to run a scholarship program, this is the first moment in the whole §25F rollout with a concrete action attached rather than a wait. An organization with a 501(c)(3) determination can file the state SGO declaration with the Secretary of State now and be positioned for the January 1 list submission, and a donation to a qualified Kentucky SGO in 2027 can earn the dollar-for-dollar federal credit of up to $1,700. Founders can start with our [guide to starting an SGO](https://eftccredit.com/learn/how-to-start-an-sgo), track Kentucky's status on our [Kentucky state page](https://eftccredit.com/states/kentucky) and the [national participation map](https://eftccredit.com/states), and see the organizations already forming in the [SGO directory](https://eftccredit.com/sgos). Kentucky built its participation to survive a hostile governor; the payoff is that its operators get to move first. Sources: - Kentucky Secretary of State Michael Adams enrolls Kentucky and opens the SGO declaration process (July 22, 2026), via The Advocate-Messenger: https://amnews.com/2026/07/22/kentucky-joins-2025-one-big-beautiful-bill-act-through-scholarship-tax-credit/ - WKYT: Kentucky officially enrolled in federal education tax credit program (July 23, 2026): https://www.wkyt.com/2026/07/23/kentucky-officially-enrolled-federal-education-tax-credit-program/ - LPM (Louisville Public Media): Adams opts Kentucky into scholarship tax credit program (July 23, 2026): https://www.lpm.org/news/2026-07-23/adams-opts-kentucky-into-one-big-beautiful-bill-scholarship-tax-credit-program - Kentucky Legislative Research Commission: HB 1 (2026 RS) bill record: https://apps.legislature.ky.gov/record/26RS/hb1.html - 26 U.S.C. §25F (federal Education Freedom Tax Credit): https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/kentucky-adams-files-federal-25f-opens-sgo-declaration-july-2026 ### The biggest risk to the federal scholarship credit isn’t politics. It’s whether people claim it Date: 2026-07-14. Category: analysis. Almost all of the public attention on the federal Education Freedom Tax Credit (FSTC / ECCA / §25F) is political: which governors have opted in, which are holding out, whether a future Congress might narrow the program. A July 14, 2026 essay in Education Next argues that this is the wrong thing to fixate on. Its author, Frederick "Rick" Hess, director of education policy studies at the American Enterprise Institute and a longtime supporter of school choice, warns that amid a "steady drumbeat of triumphal PR," the questions that will actually determine whether scholarships reach students are being overlooked. His two concerns, whether donors will participate and whether a few bad-actor scholarship organizations could tarnish the rest, are not about politics or the merits of the credit, which he backs. They are about execution. On participation, Hess marshals uncomfortable precedent. Employer 401(k) matches, among the closest things to free money in personal finance, go partly unclaimed by a large share of eligible workers. The presidential campaign checkoff, a box that costs the taxpayer nothing, saw participation fall from roughly 29% in the late 1970s to about 4% in recent years. His point is not that §25F will fail, but that uptake is never automatic: people routinely leave tax-advantaged benefits on the table "largely due to the hassle factor." His prescriptions, user-friendly ways to contribute, employer facilitation, and adjustments that preserve take-home pay, are all about stripping out friction. The encouraging read is that everything Hess worries about is fixable, and fixable without waiting on the political weather. Awareness spreads fastest through trusted local messengers; the paperwork fear is answered by §25F's [unique donor number](https://eftccredit.com/learn/25f-donor-number), which lets the IRS match a claimed credit without the donor ever handing over a Social Security number; and the cash-flow concern Hess names most sharply is the most solvable of all, since donors can [adjust their tax withholding](https://eftccredit.com/learn/eftc-paycheck-withholding) to recover the credit across their paychecks instead of waiting for a distant refund. We lay out the full picture in [why the real obstacle to §25F is the adoption gap, not politics](https://eftccredit.com/learn/eftc-adoption-gap). For the people building this program, the essay reads less like a warning than a job description. The credit's total impact is the sum of thousands of individual decisions to give, and those decisions are made at a single point in the system: the Scholarship Granting Organization that asks. An SGO that makes donating simple, issues clean receipts and donor numbers immediately, and keeps audit-ready books converts far more of its potential donors, and inoculates the whole program against the reputational risk Hess fears. Founders can start with our [guide to starting an SGO](https://eftccredit.com/learn/how-to-start-an-sgo) and see the field already forming in the [SGO directory](https://eftccredit.com/sgos). Sources: - Frederick M. Hess, “Digging In on the New Federal Scholarship Tax Credit,” Education Next / AEI (July 14, 2026): https://www.aei.org/op-eds/digging-in-on-the-new-federal-scholarship-tax-credit/ - 26 U.S.C. §25F (federal Education Freedom Tax Credit): https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/biggest-25f-risk-isnt-politics-its-uptake-july-2026 ### The teachers' unions say “voucher” like it's an insult. Parents say it like it's a lifeline. Date: 2026-07-10. Category: analysis. The national teachers' unions have a one-word strategy against the federal Education Freedom Tax Credit (FSTC / ECCA / §25F): voucher. They deploy it like a verdict, as if naming the thing settles whether it should exist. It doesn't. Strip away the framing and a §25F scholarship is a specific, concrete good: a child in a struggling school getting high-dosage tutoring, a family with a special-needs kid affording therapy, a parent finally able to choose the classroom that fits their child. If that is a voucher, then the honest question is not "is it a voucher," it is "why are the unions fighting this hard to take it away from kids." A recent [Washington Examiner op-ed by John Schilling of Defending Education](https://www.washingtonexaminer.com/op-eds/4640951/nea-aft-teachers-unions-education-freedom-tax-credit/) put that question directly, and the answer is not flattering to the people asking families to wait. The broader field of organized opposition is mapped in our coverage of [who opposes §25F and why](https://eftccredit.com/news/who-opposes-25f-unions-democrats-repeal-bill-2026). Start with who it helps, because the unions won't. The "private-school voucher" line works only if you never mention public-school kids, so let's mention them. A §25F scholarship funds "qualified elementary and secondary education expenses" as defined by [§530(b)(3), the statute §25F points to](https://eftccredit.com/documents/section-530-b3-coverdell-expenses): academic tutoring, special-needs services, books, computer technology, and after-school enrichment, at private or public schools. [Treasury's own fact sheet](https://eftccredit.com/documents/treasury-eftc-fact-sheet) is explicit that a child who stays in the neighborhood public school can use a scholarship for tutoring and support services. North Carolina's Democratic governor Josh Stein grasped this immediately: after losing his veto fight he [moved to steer the credit toward public-school students](https://eftccredit.com/news/north-carolina-stein-public-school-sgo-pivot-25f-june-2026). The unions call it an attack on public schools. It can be pointed straight at public-school kids, and a Democratic governor is already doing exactly that. It takes nothing from public schools to do it. No district loses a dollar. §25F is a federal credit for voluntary private donations. A donor gives up to $1,700 of their own money and the federal government forgoes the matching revenue, not a state and not a school district. No state education line item shrinks. The Supreme Court settled the principle in 2011 in Arizona Christian School Tuition Organization v. Winn, holding a tuition tax credit is private money rather than a government expenditure, and that taxpayers had no standing to challenge it. A program funded by private dollars cannot divert public resources it never touches. Treasury asks the question in its own FAQ, "Does this program take money from local public schools?" The answer is no. So when the unions say a scholarship for a kid's tutoring hurts public schools, ask which specific public-school budget line the child's tutoring came out of. There isn't one. The program holds itself to a standard the unions can't meet. Every scholarship organization in §25F must pass a ["90% test"](https://eftccredit.com/documents/treasury-25f-guidance-preview): by law, an SGO has to spend at least 90 percent of its income on scholarships, which leaves no more than a tenth for everything else. Set that beside the accusers. As the Washington Examiner op-ed documented, since 2015 the NEA and AFT collected $467.2 million in member dues while routing $669.3 million to political organizations, spending more on politics than they took from teachers over the same span. A scholarship organization that spent the way the unions spend would be thrown out of the program by law. The institutions demanding "accountability" would fail the accountability the credit already requires of everyone helping kids. A state that sits out doesn't protect its kids, it exports their help. Opting in is an administrative election filed with Treasury, funded by donors, absorbed federally, free to the state budget. A state that refuses doesn't stop the credit, it just watches [its own residents' eligible dollars flow to children in states that said yes](https://eftccredit.com/news/25f-state-lines-donors-anywhere-scholarships-in-state-august-2026). The op-ed estimated $6.5 billion in donations could redirect if only 15% of eligible taxpayers give in participating states. The money helps children somewhere. The only question a holdout governor actually decides is whether it helps children at home. Where each state stands is tracked on our [participation map](https://eftccredit.com/states). And the record of the side saying “trust us” is the weakest part of their case. The unions position themselves as the guardians of student outcomes. Under the status quo they are defending, fourth-grade reading proficiency fell from 65% in 2019 to 59% in 2024, and the share of eighth-graders scoring below basic in math rose from 32% to 41%. An institution presiding over those numbers, while spending more on politics than it collects in dues, is asking families to turn down help for their children on its say-so. Parents are entitled to ask what they are being asked to trust. The fight is already over; only the timing is live. The unions cannot reverse a state that has already opted in. The [congressional repeal bills](https://eftccredit.com/news/senate-democrats-introduce-ecca-repeal-bill-april-2026) have no Republican support, no committee action, and no path over a presidential veto. §25F was enacted through reconciliation in 2025, and several Democratic governors are opting in anyway. When your strongest remaining move is to talk families out of a benefit you couldn't block, you have lost the argument and you are hoping parents don't notice. Call it a voucher. Call it a scholarship. The substance doesn't change: a child gets tutoring, a family gets a choice, and not one dollar leaves a public school to make it happen. The people fighting it are protecting an institution. The credit protects the kid. Before the January 1, 2027 launch, a donor can fund it and an operator can build the organization that delivers it. Start with our [plain-English explainers](https://eftccredit.com/learn) and the current [SGO directory](https://eftccredit.com/sgos). Sources: - Washington Examiner: John Schilling (Defending Education), “Teachers unions oppose the Education Freedom Tax Credit” op-ed: https://www.washingtonexaminer.com/op-eds/4640951/nea-aft-teachers-unions-education-freedom-tax-credit/ - U.S. Department of the Treasury: Education Freedom Tax Credit fact sheet (eligible §530 expenses; “Does this program take money from local public schools?”): https://home.treasury.gov/ - 26 U.S.C. §530(b)(3): definition of qualified elementary and secondary education expenses (referenced by §25F): https://www.law.cornell.edu/uscode/text/26/530 - Arizona Christian School Tuition Organization v. Winn, 563 U.S. 125 (2011): a tuition tax credit is private money, not a government expenditure: https://supreme.justia.com/cases/federal/us/563/125/ - 26 U.S.C. §25F (federal Education Freedom Tax Credit): https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/unions-voucher-label-25f-fact-check-july-2026 ### Kansas completes its federal §25F election: the IRS roster grows to 29, and Kentucky is now the last override state waiting to file Date: 2026-07-07. Category: state-action. State: KS. Kansas has finished the paperwork. The IRS's official list of states participating in the federal Scholarship Tax Credit (FSTC / ECCA / §25F), updated July 7, 2026, now includes Kansas among the states with completed advance elections, the formal Form 15714 filing that puts a state on the federal roster for the program's January 1, 2027 launch. The official count now stands at 29 states, up from the [27 the IRS announced on June 8](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026) and the 28 it reached in late June when North Carolina filed. The filing closes a gap that has trailed Kansas since spring. Kansas did not arrive at §25F by a governor's signature: Gov. Laura Kelly vetoed SB 361, and in April the legislature [overrode her veto](https://eftccredit.com/news/kansas-legislature-overrides-kelly-veto-april-2026), House 85-38 and Senate 29-10, making Kansas one of three states to force the program in over a governor's objection, alongside Kentucky and North Carolina, the [veto-override path we have tracked all year](https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026). But an override makes participation state law; it does not by itself complete the federal election, which is an executive filing to the IRS. That mismatch left Kansas politically in but officially absent from the federal roster for nearly three months. North Carolina resolved the same mismatch in late June, and Kansas has now followed. The roster arithmetic is worth stating precisely, because two true counts circulate side by side. The IRS's official roster, the list of completed advance elections, now shows 29 states. Our own [participation map counts 30 states as opted in](https://eftccredit.com/states), because it includes Kentucky, which is in by state action, its legislature overrode Gov. Andy Beshear's veto of HB 1 in March, but whose formal federal filing has not yet appeared. New York sits in a separate category: Gov. Kathy Hochul [announced in May that the state will participate](https://eftccredit.com/news/new-york-governor-hochul-opts-in-may-2026), but no election has been filed, so we track it as committed rather than opted in. As each state files, the official roster catches up to the map. Update: it has. Kentucky filed on July 22 and appeared on the IRS list on July 27, taking the [official count to 30, identical to our map](https://eftccredit.com/news/irs-roster-30-states-kentucky-added-official-count-july-2026), with New York the only state still announced but not filed. For Kentucky, the outstanding step now has an unusual owner. Under HB 1, the statute the legislature passed over Beshear's veto, the annual federal election and the state's SGO registry run through the [independently elected Secretary of State, Michael Adams](https://eftccredit.com/news/kentucky-sgo-registry-secretary-of-state-adams-hb1-march-2026), rather than the governor's office, precisely so a governor who opposed the program cannot stall the paperwork. Kansas's completed filing leaves Kentucky as the lone override state not yet on the federal list, and the mechanics of its filing will be an early test of that workaround design. Update: Kentucky [completed that filing on July 22, 2026](https://eftccredit.com/news/kentucky-adams-files-federal-25f-opens-sgo-declaration-july-2026), when Secretary of State Michael Adams signed the state's federal advance election and opened Kentucky's SGO declaration process. For Kansas donors, families, and prospective scholarship organizations, the practical meaning is certainty: Kansas is on the federal roster the IRS will use when the program goes live, so a donation to a qualified Kansas Scholarship Granting Organization in 2027 can earn the dollar-for-dollar federal credit of up to $1,700. The next state-side milestone is the same one every participating state is waiting on: SGO certification, which [no state has opened yet](https://eftccredit.com/news/no-state-opened-sgo-certification-waiting-september-nprm-july-2026) because the rules governing it arrive with Treasury's proposed regulations, expected by the end of September. Operators who want to be ready for that window can start with our [guide to starting an SGO](https://eftccredit.com/learn/how-to-start-an-sgo); Kansas's status is tracked on our [Kansas state page](https://eftccredit.com/states/kansas) and the [national participation map](https://eftccredit.com/states), and the organizations already forming are in the [SGO directory](https://eftccredit.com/sgos). Sources: - IRS: Federal Scholarship Tax Credit (FSTC) participating states (updated July 7, 2026; lists Kansas): https://www.irs.gov/government-entities/federal-state-local-governments/federal-scholarship-tax-credit-fstc - IRS IR-2026-76: More than half the U.S. states signed up to participate (June 8, 2026; the 27-state baseline): https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill - IRS: Form 15714, advance election for the Federal Scholarship Tax Credit: https://www.irs.gov/forms-pubs/about-form-15714 Canonical: https://eftccredit.com/news/kansas-completes-federal-25f-filing-irs-roster-29-july-2026 ### One year in: the federal scholarship tax credit turns one on July 4, and the map has filled in faster than almost anyone expected Date: 2026-07-04. Category: analysis. Update, October 1, 2026: Treasury's proposed regulations, released October 1, measure the 90% test against all of an organization's gross receipts, and against its §25F account only when at least 85% of the organization's activities are scholarship granting, which is also what the June preview said. Each year's income has until the end of the following year to be spent, and under the temporary regulations states have until February 15, 2027 to submit their 2027 SGO lists. [How the 90% test works](https://eftccredit.com/news/85-percent-safe-harbor-how-sgos-meet-90-percent-rule-25f-october-2026). One year ago today, on July 4, 2025, President Trump signed the One Big Beautiful Bill Act (Public Law 119-21) into law, and with it delivered something the school-choice movement had worked toward for a generation: section 70411 created a new §25F of the Internal Revenue Code, the first federal tax credit in American history for donations to K-12 scholarship organizations. The design is elegant. [A donor anywhere in the country](https://eftccredit.com/news/25f-state-lines-donors-anywhere-scholarships-in-state-august-2026) can give up to $1,700 to a qualified Scholarship Granting Organization (SGO) and claim the full amount back as a dollar-for-dollar federal credit, turning what would have been a tax payment into a scholarship for a child in their own community. On its first birthday, the credit has gone from a single provision in a long bill to a national program that 30 states have already joined, with the first donations now just six months away. The pace of adoption has outrun nearly every early prediction. On signing day, not one state had opted in; twelve months later, 30 are on the participation map. Nebraska led the way, with Gov. Jim Pillen signing on September 29, 2025, before the IRS had even released the form states would use. Virginia became the first to complete the formal federal election in January 2026, and a broad wave followed through the winter and spring. The momentum proved strong enough that states came in even where their own governors had hesitated. By this summer the IRS's official roster listed 29 states with completed advance elections, [Kansas filed days after this anniversary](https://eftccredit.com/news/kansas-completes-federal-25f-filing-irs-roster-29-july-2026), and by [late July the official list reached 30](https://eftccredit.com/news/irs-roster-30-states-kentucky-added-official-count-july-2026) when Kentucky's filing landed, matching our own [participation map](https://eftccredit.com/states) state for state. For a program that began the year at zero, that is an extraordinary run, and several of the remaining states are visibly weighing the same move. The federal rules came into focus alongside the state wave. The IRS published the advance-election form in December 2025 and its official roster of participating states in June 2026. Then, on June 10, 2026, the Treasury Department released a [preview of the forthcoming §25F regulations](https://eftccredit.com/news/treasury-previews-25f-proposed-regulations-june-2026) that handed operators their first real blueprint: a clean 90%-of-income test measured against a dedicated account, an annual audit, and a unique-donor-number system so an SGO never handles a Social Security number. Treasury also said states, SGOs, and taxpayers can rely on the coming rules for the 2027 tax year, which is why tax advisers spent the following weeks telling clients to start building now rather than wait. The proposed regulations themselves are due by the end of September 2026. That September date is the last gate before the program goes live, and the states are staged and ready for it. SGO certification has not opened anywhere yet, and that is by design, not delay: the rules that govern it were sensibly held for the September regulations, and several states have already moved as far as they can in the meantime. Alabama has published its certification criteria, Idaho, Kentucky, and North Carolina have named the offices that will run their lists, and Virginia expanded its approved scholarship-organization roster on Youngkin's way out the door. The moment the rules land, the certification windows open and the runway to launch is short and clearly marked. What stands out most at one year is how broad the credit's appeal turned out to be. Colorado's Gov. Jared Polis became the first Democratic governor to opt in, and the reason the map filled the way it did is practical rather than ideological. §25F does not spend a state's own money; it lets a state's residents redirect federal tax they would otherwise owe into scholarships for local children. A state that participates keeps those federal dollars working for its own families, and a state that sits out simply sends them to families elsewhere. Seen that way, opting in is less a political statement than a decision not to leave money on the table, which is exactly how a growing number of governors across the spectrum have come to treat it. Year two is when the credit becomes real for families. The path from here is short and clear: the proposed regulations at the end of September, a fourth-quarter stretch in which states open SGO applications and certify their lists, and then January 1, 2027, when the first donations can be made and the first scholarships awarded. For anyone thinking about starting or running an SGO, this anniversary is the moment to move: the roughly six months between now and launch are the window to stand up a 501(c)(3), build a donor base that stays comfortably inside the [10% administrative cap](https://eftccredit.com/news/25f-sgo-marketing-cost-10-percent-cap-june-2026), and choose the software to run a compliant program. Our [guide to starting an SGO](https://eftccredit.com/learn/how-to-start-an-sgo) lays out what can be done today, the [participation map](https://eftccredit.com/states) tracks every state, and the [directory](https://eftccredit.com/sgos) maps the field already forming. One year after a president's signature, the first federal scholarship tax credit has gone from an idea to a near-certainty with a launch date on the calendar, and its best year is the one just ahead. Sources: - The White House: President Trump's One Big Beautiful Bill Is Now the Law (July 4, 2025): https://www.whitehouse.gov/releases/2025/07/president-trumps-one-big-beautiful-bill-is-now-the-law/ - Public Law 119-21 (One Big Beautiful Bill Act); §25F created by section 70411: https://www.congress.gov/bill/119th-congress/house-bill/1 - 26 U.S.C. §25F (federal Education Freedom Tax Credit): https://www.law.cornell.edu/uscode/text/26/25F - U.S. Treasury: Preview of Forthcoming Section 25F Guidance (June 10, 2026): https://home.treasury.gov/system/files/136/Preview-of-Forthcoming-Guidance.pdf Canonical: https://eftccredit.com/news/one-year-since-25f-signed-obbba-july-2026 ### Six months to launch, and only Virginia has an SGO list on file. Here is why everyone else is waiting, and what to do with the wait. Date: 2026-07-03. Category: analysis. Update, October 1, 2026: the rules this piece was waiting for were released October 1. Under the temporary regulations, states file the 2027 advance election by January 1 and submit SGO lists by February 15, 2027, and every organization that plans to solicit §25F gifts must register in the new IRS SGO portal once it opens. Under the proposed regulations, the 90% test applies to an organization's total receipts unless at least 85% of its activities are scholarship granting, in which case it applies to the §25F account. [The 2027 calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). There is a gap in the middle of the federal Education Freedom Tax Credit (FSTC / ECCA / §25F) that the roster counts hide. Thirty states have completed the formal advance election and appear on the IRS's official list of participating states, a count our own [participation map](https://eftccredit.com/states) now matches exactly. [Kansas filed on July 7](https://eftccredit.com/news/kansas-completes-federal-25f-filing-irs-roster-29-july-2026), and Kentucky, which joined by overriding its governor's veto, filed on July 22 and appeared on the IRS list on [July 27, taking the official count to 30](https://eftccredit.com/news/irs-roster-30-states-kentucky-added-official-count-july-2026). New York has announced it will participate without yet electing in. Either way the program goes live January 1, 2027, and that launch date, not anything that happens this year, is what governs when a donation can earn the credit: §25F is a credit for the 2027 tax year, so no gift made in 2026 qualifies, even to an SGO that is already certified. Nobody is making a credited donation before January 1 regardless of how fast the states move. What is striking at the halfway mark is that the machinery meant to run the program from day one is not standing yet. As of early July 2026, with roughly six months on the clock, no state has opened a process an organization can apply through to be certified as a Scholarship Granting Organization (SGO). Not one, including [Virginia](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), which is the lone state that has actually sent Treasury a list: Gov. Youngkin named eight organizations by letter on January 9, 2026, without ever running an application round, and flagged that the list may change as federal guidance arrives. The election put states on the map; it did not switch the program on, because the criteria an application would be judged against, and therefore the certified-SGO list in all but one state, do not exist yet. The reason is a deliberate sequencing choice at Treasury, and it is worth stating plainly so operators stop refreshing state websites waiting for an application form that is not coming this summer. The only part of §25F the IRS has fully built out is the state advance election, the Form 15714 filing a governor or designated official uses to opt a state in. The rules that govern SGO certification itself, who qualifies, how a state builds and submits its list, the deadline mechanics for the first year, were expressly deferred to the proposed regulations Treasury previewed on June 10 and said it expects to issue no later than the end of September 2026. Until those land, states have nothing final to certify against, and they are saying so, in writing, on their own pages. The state agencies are unusually candid about the hold. Alabama's Department of Revenue has already [published the six criteria an organization must meet to be certified](https://eftccredit.com/news/alabama-aldor-publishes-25f-sgo-certification-criteria-january-2026), 501(c)(3) status, scholarships to ten or more students at more than one school, at least 90% of income spent on scholarships, no earmarking for named students, Alabama students only, and ALDOR certification, then states directly that it is "awaiting additional guidance from the Treasury Department" before finalizing deadlines. [Nebraska's](https://eftccredit.com/states/nebraska) §25F page says flatly that it will post SGO forms and procedures only "after the final federal guidance has been published." [Mississippi's governor said the state would designate eligible SGOs "in the coming months."](https://eftccredit.com/news/mississippi-reeves-opts-in-25f-sgo-list-pending-january-2026) [Tennessee has assigned its Department of Education](https://eftccredit.com/news/tennessee-enacts-25f-enabling-law-public-chapter-720-homeschoolers-included-may-2026) to certify organizations and submit the list, but has not opened a window. The pattern is identical across every participating state we checked: authorized, staffed, and frozen, all waiting on the same September document. That turns a vague "sometime before 2027" into a sharp and predictable calendar. If the proposed regulations publish at the end of September and carry reliance for the 2027 tax year, as Treasury signaled they will, then the real certification sprint is the fourth quarter of 2026: states open applications, organizations apply and get listed, and each state submits its roster to Treasury, all compressed into the weeks before the January 1 launch. The states that did their homework early, Alabama pre-publishing criteria, Nebraska standing up an information page, Tennessee naming its certifying agency, are the ones positioned to open fastest once the gun sounds. The states still deciding who even administers the list (West Virginia adjourned without designating an officer) will be slower. For an operator, the state you organize in may determine whether you are certified in October or scrambling in December. The mistake would be to read "certification is closed" as "nothing to do yet." The wait is the build window, and almost everything an SGO needs is within an operator's control right now, independent of the September rules. The 501(c)(3) determination, the segregated account that will carry the 90%-of-income test, the annual-audit relationship, and above all the donor pipeline can all be assembled now, and the donor side is the one that decides whether a new SGO survives, because acquiring donors can cost more than the 10% administrative cap allows, a squeeze we covered in [our look at §25F marketing costs](https://eftccredit.com/news/25f-sgo-marketing-cost-10-percent-cap-june-2026). An operator who spends the third quarter building an audience it does not have to buy, and picking software that keeps intake, income verification, receipting, and disbursement inside the cap, walks into the fourth-quarter certification window ready to file rather than starting from zero. Our [guide to starting an SGO](https://eftccredit.com/learn/how-to-start-an-sgo) lays out exactly what can be done before the rules finalize. So the honest status of the program at the halfway mark is this: the yes votes are in, the plumbing is not connected, and the connection date is now legible. The end-of-September proposed regulations are the event that starts the certification race in every opted-in state at once; the first state to actually open SGO applications after that will be a genuine first worth marking. Until then, the work is preparation, not paperwork. Operators can track which states have opted in on the [national participation map](https://eftccredit.com/states), see the current field in the [SGO directory](https://eftccredit.com/sgos), and use the runway rather than wait it out. Correction, July 29, 2026: this piece originally said no state had put an SGO list in front of Treasury. That was wrong, and our own [Virginia page](https://eftccredit.com/states/virginia) had the fact: on January 9, 2026, Gov. Glenn Youngkin sent Treasury and the IRS a letter naming Virginia's initial eight Scholarship Granting Organizations, two in-state and six national, noting the list may be updated as federal guidance arrives. Virginia is the exception to everything below. What remains accurate, and is the point of this piece, is that no state including Virginia has opened an application process an organization can apply through, and that the criteria those applications would be judged against still do not exist. Virginia named eight organizations by letter; it did not run a certification round. Update, July 22, 2026: Kentucky became the first state to open any SGO sign-up step, when Secretary of State Michael Adams [filed a regulation opening the state's SGO declaration process](https://eftccredit.com/news/kentucky-adams-files-federal-25f-opens-sgo-declaration-july-2026) alongside completing Kentucky's federal election. The distinction in this piece still holds: Kentucky opened a state-level declaration under its own HB 1, letting 501(c)(3)s get in line under state law, but federal SGO qualification, the criteria every state ultimately certifies against, still arrives with Treasury's end-of-September regulations. Kentucky moved first on the part it controls; the national certification race still starts in September. Update, July 29, 2026: Treasury's entries in the 2026 Unified Agenda put a shape, if not a date, on the rules this piece is waiting for. Both §25F entries are listed as [an interim final rule with accompanying temporary regulations](https://eftccredit.com/news/treasury-unified-agenda-25f-interim-final-rule-sgo-lists-fall-2026), an instrument that takes effect on publication rather than after a comment period, and the temporary rules exist specifically to let states submit their SGO lists in the fall of 2026 before final regulations publish. If that holds, certification opens on a faster track than a proposed-rule-then-comment cycle would allow. Update, September 11, 2026: it held for the half that matters here. Both RINs reached OIRA on September 10, 2026, and [the temporary regulations carrying the state election and SGO list procedures were filed as an interim final rule](https://eftccredit.com/news/25f-rules-reach-oira-interim-final-temporary-regs-september-2026), binding on publication, while the substantive regulations were filed as an ordinary proposed rule. No state has opened federal SGO certification yet, and the rules that would let one do so are now at the last step before they publish. Update, August 20, 2026: Alaska [opened applications for approval as a K-12 Scholarship Granting Organization](https://eftccredit.com/news/alaska-opens-sgo-applications-first-state-approvals-september-30-august-2026), asking for a letter of interest attesting to federal compliance plus an IRS 501(c)(3) determination letter, and said it expects to approve its first group by September 30, the first date any state has committed to. Alaska is the second state to open such a process, after Kentucky on July 22 (the update above). Both moved before Treasury's regulations published rather than after, which is the opposite of the sequence this piece expected, and in Alaska's case an attestation is how the state bridges the gap. The broader point stands: the criteria those attestations promise compliance with still arrive with the federal rules. Sources: - Alabama Department of Revenue: The Education Freedom Tax Credit Program (SGO certification criteria; awaiting Treasury guidance): https://www.revenue.alabama.gov/tax-policy/the-education-freedom-tax-credit-program-alabamas-part-in-the-federal-sgo-program/ - Nebraska Department of Revenue: §25F Qualified Elementary and Secondary Education Scholarships (SGO forms to follow final federal guidance): https://revenue.nebraska.gov/internal-revenue-code-ss-25f-qualified-elementary-and-secondary-education-scholarships-information - U.S. Treasury: Preview of Forthcoming Section 25F Guidance (June 10, 2026; proposed regulations expected by end of September 2026): https://home.treasury.gov/system/files/136/Preview-of-Forthcoming-Guidance.pdf - Office of Gov. Tate Reeves: Mississippi opts into federal tax-credit scholarship program (SGOs to be designated in coming months): https://governorreeves.ms.gov/governor-reeves-opts-into-federal-tax-credit-scholarship-program-to-promote-school-choice/ Canonical: https://eftccredit.com/news/no-state-opened-sgo-certification-waiting-september-nprm-july-2026 ### Every child is “eligible” for the federal scholarship. In half the states, homeschoolers still can’t spend it. Date: 2026-07-02. Category: analysis. Update, October 1, 2026: Treasury's proposed regulations, released October 1, keep the section 530 definition of a school, one providing K-12 education "as determined under State law," and do not repeat the June preview's sentence about home schools. Treasury says its section 530 guidance on qualified expenses and schools is a high priority and will be issued separately, so the question this piece describes stays open until that guidance is out. [Our read of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026). When Congress created the federal Education Freedom Tax Credit (FSTC / ECCA / §25F) in 2025, the promise was sweeping. Beginning January 1, 2027, any K-12 child eligible to enroll in a public school can receive a scholarship from a Scholarship Granting Organization (SGO), funded dollar-for-dollar by donors who claim a federal credit of up to $1,700. "Every kid is eligible" became the rallying line of the school-choice movement. For homeschool families in roughly half the country, that line is misleading, and the reason is buried in a single statutory cross-reference that almost no one outside a handful of tax lawyers has read. The credit, codified at Section 25F of the Internal Revenue Code, actually contains two different tests, and home-educated children fall straight through the space between them. The first test asks who is an eligible student, and it is broad: a child qualifies if their household income is at or below 300% of the area median and they are "eligible to enroll in a public elementary or secondary school." Homeschoolers clear that bar without breaking stride. The second test asks what is a qualified expense, and it is narrow. A scholarship may only pay for a "qualified elementary or secondary education expense," a term §25F defines not on its own but by pointing to a different statute, IRC §530(b)(3)(A), the rulebook for Coverdell education-savings accounts. And §530 ties every qualifying expense to enrollment or attendance "at a public, private, or religious school," then defines "school" as one providing K-12 education "as determined under State law." Read those two tests together and the trap appears. A homeschooled child can be a perfectly eligible student and still have no qualifying expense to spend the scholarship on, if their state's law does not treat the home itself as a "school." There is no separate homeschool category anywhere in §530. Tellingly, the very same 2025 law did amend the §529 college-savings rules to cover homeschool expenses by name, but §25F points to §530, which got no such fix. Anyone who assumes "the new law covers homeschoolers" is reading the wrong section. This is not a drafting ambiguity that a friendly regulation might quietly read away. On June 10, 2026, the Treasury Department released a [preview of its forthcoming §25F guidance](https://eftccredit.com/news/treasury-previews-25f-proposed-regulations-june-2026) that says it plainly: it expects the rules to define "school" consistent with §530 to include public, private, and religious schools providing K-12 education as determined under state law, and "accordingly, a home school would be treated as a school if it is treated as a school under State law." A Treasury tax-policy official had walked through the identical statutory path at an industry webinar the day before. The written preview removes even the hedge: homeschool access to the federal scholarship now turns entirely on each state's classification of home education, a question of state law that Washington has expressly declined to override. The homeschool world has always sorted states by how much paperwork a family must file, light regulation here, heavy regulation there. But that is the wrong axis for this question. What matters for §25F is a different, rarely-asked question: does your state's law call the home a "school," or does it route home education through a separate "home instruction" category that is, by design, not a school? We classified all 50 states and the District of Columbia against exactly that test, citing the controlling statute or court decision in each, in our [interactive 50-state map](https://eftccredit.com/learn/homeschool-eligibility-by-state). The result is not a tidy half-and-half: 15 states likely qualify, because the home is a "school" under state law (Texas counts a home school as a private school after a 1994 state Supreme Court ruling; Arizona's statute literally defines "homeschool" as "a nonpublic school"); 23 states plus D.C. likely do not, because home education sits in a separate "home instruction" box the statute deliberately holds apart from a school (Virginia's statute commands that parent-led home instruction "shall not be classified or defined as a private ... school"); and 12 states are genuinely gray, awaiting Treasury's separate guidance on which §530 expenses count. The single most consequential finding: in 29 states, the answer is pathway-dependent. Many states let a family home-educate either by operating as a private school or by filing under a standalone home-education statute. Choose the first box and the child likely qualifies; choose the second and they likely don't. Same child, same kitchen table, different paragraph of state law. In Alaska, a family that registers as a private school is in; one that uses the parental home-education exemption is out. Most families have no idea the choice carries a federal-scholarship consequence, because until now no one had a reason to ask. The stakes are not abstract. Some SGOs are already marketing to homeschool families with flat assurances of "no homeschool exclusion," a claim Treasury's own preview directly contradicts. For a credit that pays dollar-for-dollar, telling a family the money is theirs when their state's law won't let them spend it isn't a rounding error. It is a promise that breaks at the worst possible moment: after the school year has been planned around it. Two things could close the gap, and neither is automatic. A state that routes homeschoolers through a non-school "home instruction" statute could amend its definitions to recognize home schools as schools, as 15 states already effectively do, but that is a state legislative fix, fifty separate fights. Or Treasury's forthcoming §530 expense guidance, a separate workstream the department says will follow the main §25F regulations expected by late September 2026, could read "school" more generously and carve out hybrid arrangements, so that a homeschooler who also enrolls part-time in a co-op or microschool that is a private school keeps a qualifying expense. Until one of those happens, "every kid is eligible" remains true in the narrowest legal sense and false in the way that counts. The least we can do before January 2027 is tell families the truth about their own state, which is exactly what our [state-by-state map](https://eftccredit.com/learn/homeschool-eligibility-by-state) and our guide to [who §25F actually covers](https://eftccredit.com/learn/eftc-for-public-schools) are for. Sources: - U.S. Treasury: Preview of Forthcoming Section 25F Guidance (June 10, 2026): https://home.treasury.gov/system/files/136/Preview-of-Forthcoming-Guidance.pdf - U.S. Treasury: press release on the §25F guidance preview (June 10, 2026): https://home.treasury.gov/news/press-releases/sb0527 - 26 U.S.C. §530 (qualified expense and the "school … as determined under State law" definition): https://www.law.cornell.edu/uscode/text/26/530 - 26 U.S.C. §25F (federal Education Freedom Tax Credit): https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/homeschool-25f-eligibility-gap-half-cant-spend-2026 ### The math nobody budgeted for: finding a §25F donor can cost more than the cap lets an SGO spend on everything Date: 2026-06-30. Category: analysis. Update, October 1, 2026: Treasury's proposed regulations change this math for SGOs that mostly grant scholarships. If at least 85% of an organization's activities are scholarship granting, the 90% test applies only to its §25F account, and Treasury says that lets an SGO spend more than 10% on overhead from income outside that account, such as gifts raised separately for operations; below 85%, the test applies to all gross receipts. Each year's income also has until the end of the following year to be spent. [How the 85% safe harbor works](https://eftccredit.com/news/85-percent-safe-harbor-how-sgos-meet-90-percent-rule-25f-october-2026). The federal Education Freedom Tax Credit (FSTC / ECCA / §25F) is often described as free money: a donor gives up to $1,700 to a Scholarship Granting Organization (SGO), claims the full amount back as a dollar-for-dollar federal credit, and a family gets a scholarship. On June 30, 2026, Chalkbeat's Matt Barnum surfaced the part of that picture the rally cries leave out, and it is the single most important number for anyone thinking about starting or running an SGO: the money is only free to the donor once the SGO has found that donor, and finding donors costs real dollars the credit does not reimburse. Here is the squeeze in one line. The American Federation for Children, a leading school-choice group, estimates internally that it could cost $300 or more in marketing to persuade a single taxpayer to make a §25F donation. AFC spokesman Brian Jodice put it in industry terms, a target of roughly $1 in spending to generate $5 in donations, which on a $1,700 gift works out to about $340. But §25F requires an SGO to spend at least 90 percent of its income on scholarships, which leaves a tenth of what it takes in, the equivalent of $170 on a $1,700 donation, for everything that is not a scholarship. That 10% has to cover staff, technology, audits, legal and compliance work, income verification, and donor acquisition combined. If it costs $300 to land a donor and the whole non-scholarship budget for that donor's gift is $170, the marketing alone is nearly double the entire allowance, before a single other bill is paid. Not everyone accepts the $300 figure, and the disagreement is itself instructive. Jim Blew, an adviser to the coalition implementing the credit, argued the real cost is closer to $100 per donor, still more than half the 10% cap by itself. Derrell Bradford, president of 50CAN, and Darla Romfo, president of the Children's Scholarship Fund, are among those looking for lower-cost ways to reach donors precisely because the cap makes expensive acquisition unsustainable at scale. The honest read is that nobody yet knows the true first-year number, because the program does not go live until January 1, 2027, and no one has run a §25F donor campaign at volume. What is not in dispute is the shape of the problem: donor acquisition is the largest single threat to a new SGO's budget, and the statute gives it the least room. The scale is what makes this a national story rather than an accounting footnote. The Trump administration's own projection assumes about 30% of eligible taxpayers, roughly 14 million people, will donate, producing around $24 billion for scholarships. Run the AFC's own $300 figure across 14 million donors and national marketing would run past $4.2 billion, money that by law cannot come out of the credited donations themselves. That is why AFC says it has already raised more than $10 million for a national awareness campaign funded outside the cap: the outreach that fills the top of the funnel has to be paid for with separate, non-credit dollars, because the 10% inside the credit will not stretch to cover it. For SGO operators, this is the number to build the whole model around, and it points to a clear strategy rather than a dead end. An SGO that spends $300 in paid marketing per donor is structurally underwater; one that acquires donors through channels it does not have to buy, an existing school community, a congregation, an alumni or parent network, a partner nonprofit's list, starts far closer to viable because those donors arrive at little or no acquisition cost. That is exactly why the SGOs best positioned for §25F are often the ones attached to an institution that already has a donor base, and why a brand-new SGO with no built-in audience faces the steepest climb. The other half of the answer is holding down the rest of that 10%: the more of the allowance an SGO burns on manual intake, eligibility checks, receipting, and audit prep, the less is left for finding donors at all. Purpose-built [§25F software that automates intake, income verification, donor receipting, and disbursement](https://eftccredit.com/learn/how-to-start-an-sgo) is one of the few levers an operator controls to keep administrative overhead low enough that donor outreach can fit inside the cap. None of this is an argument against the credit, and the groups raising it are among its strongest backers, which is the tell that it is an implementation problem, not a fatal flaw. Twenty-nine states are already on the IRS's official roster heading into the 2027 launch (our [participation map counts 30](https://eftccredit.com/states), including Kentucky, which opted in by veto override but has not yet completed the formal federal filing), and the demand for scholarships is real. But the difference between an SGO that thrives and one that quietly folds in year one will come down to a piece of arithmetic that the "free money" framing hides: cost per donor versus the 10% cap. Operators sizing up whether and how to launch can start with our [guide to starting an SGO](https://eftccredit.com/learn/how-to-start-an-sgo), see the current national field in the [SGO directory](https://eftccredit.com/sgos), and track where each state stands on the [participation map](https://eftccredit.com/states). The credit going live is settled; who can afford to deliver it is the question this number decides. Sources: - Chalkbeat: The federal school choice tax credit comes with steep marketing costs (June 30, 2026): https://www.chalkbeat.org/2026/06/30/federal-school-choice-tax-credit-has-steep-marketing-costs/ - 26 U.S.C. §25F (federal Education Freedom Tax Credit, including the SGO expense limitation): https://www.law.cornell.edu/uscode/text/26/25F - American Federation for Children (national awareness campaign for the federal scholarship tax credit): https://www.federationforchildren.org/ Canonical: https://eftccredit.com/news/25f-sgo-marketing-cost-10-percent-cap-june-2026 ### The biggest prize in §25F is still on the table: a new California resolution urges Newsom to opt in and claim up to $4.9 billion in scholarships Date: 2026-06-24. Category: state-action. State: CA. California has spent the §25F wave on the sidelines, and on June 23, 2026 the question of whether it should stay there finally reached the floor of the Legislature. Assemblymember Josh Hoover introduced Assembly Concurrent Resolution 229, titled the "Federal Education Freedom Tax Credit," urging Gov. Gavin Newsom to "exercise his executive authority to promptly submit California's election to participate" in the federal program and directing state agencies to designate qualifying Scholarship Granting Organizations (SGOs) in time for the January 1, 2027 launch. Coauthored by Assembly Members Castillo, Hadwick, and Sanchez, it is the first formal legislative measure of any kind to press California's governor on §25F, and it arrives with a number attached that is hard to ignore: by the resolution's own estimate, if California opts in it could access up to $4.91 billion in scholarship contributions between 2027 and 2029 alone. It is worth being precise about what the resolution is and is not. A concurrent resolution expresses the will of the Legislature; it does not change law and cannot compel the governor to act. As of its latest action, ACR-229 had come from the printer and was awaiting committee referral, the earliest possible stage. In a Legislature with a Democratic supermajority, a resolution carried by Republican members faces an uncertain path to the floor. What it does accomplish, regardless of whether it advances, is to put the opt-in question on California's official legislative record for the first time and to frame it not as an abstract policy fight but as a concrete, quantified choice about federal dollars the state is currently declining to claim. California's actual status has not changed. Newsom has taken no public position on §25F, no bill to opt the state in or to authorize an SGO list has advanced in the 2025-2026 session, and California has neither filed Form 15714 nor submitted a list of Scholarship Granting Organizations to Treasury. That leaves the largest state in the country, and by extension the largest single pool of eligible families, absent from a program that [30 states have already joined](https://eftccredit.com/states). The cost of waiting is real but bounded: the opt-in decision is annual, so a governor who declines in 2027 can still elect in for 2028 or any later year. Every year California stays out, though, its residents' credit-eligible dollars flow to scholarship organizations in other states rather than to children at home. What makes ACR-229 notable is that it is the second distinct constituency to press Newsom on the same point from a very different direction. Earlier this year a grassroots effort out of a Los Angeles parish school, the [Purple Postcard Campaign](https://eftccredit.com/news/california-purple-postcard-campaign-newsom-25f-february-2026), mobilized more than 1,100 students and a Democratic-aligned coalition, including Democrats for Education Reform and the California Catholic Conference, to urge the governor to opt in. Now the case is being made inside the Capitol as well. The through-line in both is the argument that has moved governors across the spectrum: §25F does not spend a state's own money. It lets a state's residents redirect federal tax they would otherwise owe into scholarships for local children, which is why the choice increasingly reads less as an ideological stance than as a decision about whether to leave several billion dollars unclaimed. Where the broader field of Democratic governors has landed is tracked in our coverage of how [Democratic governors have split on §25F](https://eftccredit.com/news/democratic-governors-split-on-25f-2026). For anyone weighing whether to build a California SGO, the practical signal is that pressure on Newsom is now coming from both the street and the statehouse, even if the governor's position remains unmoved and the timeline uncertain. Nothing about ACR-229 changes what an operator can do today, and California's sheer scale is the reason to be ready rather than to wait: if the state ever files its election, the demand for scholarship capacity would be larger than in any state already participating. Founders can track California's status and every other state's on our [California state page](https://eftccredit.com/states/california) and the [national participation map](https://eftccredit.com/states), see the field already forming in the [SGO directory](https://eftccredit.com/sgos), and use our [guide to starting an SGO](https://eftccredit.com/learn/how-to-start-an-sgo) to build the pieces that do not depend on any one governor's decision. The resolution will likely stall in a divided Legislature, but the number it put on the record, up to $4.91 billion, is the clearest statement yet of what California is choosing to forgo. Sources: - California Legislature: ACR-229, Federal Education Freedom Tax Credit (introduced June 23, 2026): https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202520260ACR229 - California Legislature: ACR-229 status and history: https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260ACR229 - 26 U.S.C. §25F (federal Education Freedom Tax Credit): https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/california-acr229-hoover-urges-newsom-opt-in-25f-june-2026 ### New Hampshire passes a §25F implementing statute, putting its scholarship-credit machinery on Gov. Ayotte's desk Date: 2026-06-23. Category: state-action. State: NH. New Hampshire already told the federal government it was in. In January 2026, Gov. Kelly Ayotte [announced the state would participate](https://eftccredit.com/news/new-hampshire-ayotte-opts-in-25f-january-2026) in the federal Education Tax Credit for scholarship granting organizations created under §25F of the One Big Beautiful Bill Act, and New Hampshire appears on the IRS advance-election roster. What it did not yet have was a statute spelling out who, inside state government, actually runs the program. In June 2026 the legislature supplied one: both chambers gave final approval to House Bill 1774 and sent it to Gov. Ayotte's desk, where it awaits her signature. The bill divides the operational labor between two agencies. It directs the Department of Revenue Administration, "to the extent possible," to participate in the federal income tax credit for individual contributions to qualified scholarship granting organizations beginning in tax years ending after December 31, 2026, and to renew that participation automatically each year. It then tasks the Department of Education with creating New Hampshire's list of qualifying scholarship granting organizations (SGOs), submitting that list to the U.S. Treasury, publishing it on the state website, and certifying to the legislature that it has done so. Notably, the version that passed bars the agencies from adopting implementing rules, keeping the framework in statute rather than delegating it to a rulemaking process. The §25F language is bundled inside a broader bill that also addresses federal Workforce Pell grants, so the scholarship-credit provisions are one component of HB 1774 rather than its entire subject. The practical significance is the shift from an executive decision to a statutory one. Ayotte's January announcement was an advance election, the act of putting New Hampshire on the federal roster; a future governor could, in principle, reverse course on an executive opt-in. HB 1774 instead writes the participation duty and the automatic annual renewal into law and names the offices responsible for the SGO list, the donor-facing roster, and the reporting back to the legislature. It is the difference between saying yes and building the apparatus that makes the yes operate. With the federal credit going live January 1, 2027, that apparatus, especially the qualifying-SGO list, is the part that has to exist before any New Hampshire donor can claim the credit or any family can receive a scholarship. That list is also the gate every New Hampshire scholarship organization will have to clear. Once the Department of Education builds and submits it, only organizations on it can receive §25F-eligible contributions, so the months between now and the 2027 launch are the window in which existing nonprofits get qualified and new ones stand up. Children's Scholarship Fund New Hampshire is the most visible in-state candidate, but the program is open to any qualifying organization. Operators weighing whether to launch or expand one can review how the program works in our [explainers](https://eftccredit.com/learn) and see the current national field in the [SGO directory](https://eftccredit.com/sgos); the intake, eligibility-verification, and disbursement work behind a compliant program can run on software built specifically for §25F. New Hampshire's status, and what families need to know locally, is tracked on our [New Hampshire state page](https://eftccredit.com/states/new-hampshire). What remains is Ayotte's signature. As the Republican governor who announced the opt-in in the first place, she is the official the bill empowers rather than constrains, and her decision is the last step before the implementing framework becomes law. New Hampshire is one of the [more than two dozen states](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026) on the federal roster heading into the January 1, 2027 launch, and HB 1774 moves it from a state that has elected in to one with the statutory machinery to run a §25F program. The next milestone after a signature is the Department of Education's submission of the qualifying-SGO list to Treasury. The full national picture is mapped on our [state participation map](https://eftccredit.com/states). Update, July 2, 2026: Gov. Ayotte signed HB 1774 into law, in a batch of 74 bills signed at the close of the session. New Hampshire now has its §25F implementing statute on the books; the next milestone is the Department of Education's qualifying-SGO list, which, like every state's, waits on [Treasury's end-of-September proposed regulations](https://eftccredit.com/news/no-state-opened-sgo-certification-waiting-september-nprm-july-2026). Sources: - New Hampshire Department of Revenue Administration: bill analysis of HB 1774 as amended by the House: https://www.revenue.nh.gov/sites/g/files/ehbemt736/files/documents/dra-bill-analysis-of-hb-1774-as-amended-by-the-house.pdf - New Hampshire Department of Revenue Administration: bill analysis of HB 1774 as introduced: https://www.revenue.nh.gov/sites/g/files/ehbemt736/files/documents/dra-bill-analysis-of-hb-1774-as-introduced.pdf - New Hampshire HB 1774 (2026) bill text and status: https://legiscan.com/NH/bill/HB1774/2026 - Citizens Count: HB 1774 (2026), qualifying scholarship granting organizations and federal workforce Pell grants: https://www.citizenscount.org/bills/hb-1774-2026 - IRS Newsroom: More than half the U.S. states signed up to participate (lists New Hampshire): https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill - Office of Gov. Kelly Ayotte: Governor Signs 74 Bills into Law (July 2, 2026; includes HB 1774): https://www.governor.nh.gov/news/governor-signs-74-bills-law - InDepthNH: Ayotte signs 74 bills into law, including HB 1774 (July 2, 2026): https://indepthnh.org/2026/07/02/ayotte-vetoes-toll-hikes-for-out-of-staters-doubled-up-front-rental-costs-school-book-bans-signs-74-into-law/ Canonical: https://eftccredit.com/news/new-hampshire-hb1774-25f-implementing-statute-ayotte-desk-june-2026 ### Pennsylvania's House overhauls its scholarship-credit programs, and a top Democrat calls the federal §25F credit “intriguing” Date: 2026-06-22. Category: state-action. State: PA. Pennsylvania does not yet have a federal §25F decision, but on June 22, 2026 its House gave the clearest public read so far on how the state's Democratic majority thinks about scholarship tax credits. By a 105-97 vote, the chamber passed House Bill 2632, sponsored by Rep. Nikki Rivera (D-Lancaster), which would retire Pennsylvania's two long-running tax-credit-scholarship programs, the Educational Improvement Tax Credit (EITC) and the Opportunity Scholarship Tax Credit (OSTC), after the 2026-27 fiscal year and replace them, beginning in 2027-28, with a single new roughly $680 million "Education Options Tax Credit." The replacement redirects a large share of the credits toward students in low-income areas and underperforming schools, expands the eligible uses of scholarship money to include childcare, removes the per-pupil scholarship caps, and layers in new public-reporting and school-participation requirements. The bill now heads to the Senate. This is Pennsylvania's own state program, legally distinct from the federal credit, but it runs on the same machinery, donors, scholarship organizations, and a tax credit, that §25F federalizes, which is why the floor debate doubled as a preview of the federal question. The line most relevant to §25F did not come from the bill text but from the chamber's second-ranking Democrat. House Majority Leader Matt Bradford defended the overhaul on transparency grounds, arguing that "no one should ever fear transparency, especially when you're talking about three-quarters of a billion dollars of state tax dollars," and, notably, described parts of the federal scholarship credit as "intriguing." In a state that has not opted into the federal Scholarship Tax Credit (FSTC / ECCA / §25F), a senior House Democrat engaging the federal credit on its merits rather than rejecting it outright is the genuinely new signal here. It is a markedly warmer posture than the reflexive opposition the credit has drawn from public-education groups in other states, and it lands while the decision in Pennsylvania still belongs to the governor. That governor, Josh Shapiro, remains undecided. His office said it is reviewing HB 2632 and has not tipped whether his federal position has changed; he has repeatedly said he wants to wait for federal guidance to answer key questions before electing Pennsylvania into §25F, with the practical deadline at year-end. Shapiro is not a reflexive opponent of these programs, he has signed budgets that grew the state's tax-credit-scholarship funding by nearly half, even as he has resisted some Republican voucher expansions, which places him in the same watch-and-wait group as [Maryland's Wes Moore](https://eftccredit.com/news/maryland-wes-moore-25f-decision-pending-june-2026) and the other [pending states we have been tracking](https://eftccredit.com/news/pending-states-whats-at-stake-pennsylvania-may-2026). The takeaway for anyone reading Pennsylvania's tea leaves: the Democratic establishment here is moving to modernize and expand its scholarship-credit system, not dismantle it, which is the more telling backdrop for whether the state ultimately says yes to the federal credit. Not everyone reads HB 2632 as friendly, and an honest account has to note the fight. Catholic and private-school advocates warn that ending the existing EITC and OSTC and re-tiering eligibility could strand students who hold scholarships today, Lansdale Catholic publicly cautioned that 173 of its students could lose tuition aid, and the Commonwealth Foundation argued the committee version would leave tens of thousands of scholarship students at risk. Supporters, including progressive outlets that have long criticized the programs' lack of disclosure, call the reporting requirements overdue. For §25F specifically, the federal credit is governed by federal rules that states cannot rewrite, so Pennsylvania's redesign of its own program does not bind the federal one, but the same instinct on display here, route the money but attach transparency and targeting conditions, is exactly the impulse at the center of the national question of whether §25F is a [federal floor or a ceiling](https://eftccredit.com/news/federal-floor-or-ceiling-25f-state-restrictions-june-2026) on what states can require. What it means going forward: Pennsylvania is one of the largest states still on the federal fence, and it is not starting from scratch. Its existing EITC and OSTC ecosystem already includes the scholarship organizations and donor relationships that, if the state elects in, could become §25F-eligible scholarship granting organizations, the same intake, eligibility-verification, and disbursement work a compliant program needs, which can run on [software built for §25F](https://eftccredit.com/learn/how-to-start-an-sgo). The bill now moves to the Senate, and Shapiro's federal decision is due by year-end; both are worth watching together, because the program design Pennsylvania settles on for its own credit will shape the terms it would want around the federal one. Operators sizing up the state can see the current national field in the [SGO directory](https://eftccredit.com/sgos), and Pennsylvania's status is tracked on our [Pennsylvania state page](https://eftccredit.com/states/pennsylvania) and the national [participation map](https://eftccredit.com/states). Sources: - The Philadelphia Inquirer: Pennsylvania Democrats weigh school choice as the federal tax credit looms (June 28, 2026): https://www.inquirer.com/politics/pennsylvania/school-choice-state-federal-funding-pennsylvania-democrats-josh-shapiro-20260628.html - Altoona Mirror: House passes measure to increase school choice program oversight (HB 2632, 105-97): https://www.altoonamirror.com/news/local-news/2026/06/pa-house-hb2632-school-choice-oversight-bill-advances/ - Pennsylvania General Assembly: House Bill 2632 (2025-2026 session), Appropriations fiscal note: https://www.legis.state.pa.us/WU01/LI/BI/FN/2025/0/HB2632P3598.pdf - Commonwealth Foundation: House Education Committee votes to cut school-choice scholarships: https://commonwealthfoundation.org/2026/06/16/house-education-votes-to-cut-school-choice-scholarships/ Canonical: https://eftccredit.com/news/pennsylvania-hb2632-eitc-overhaul-bradford-25f-june-2026 ### A week after Treasury's §25F preview: what tax advisers are telling clients, and how states are already reacting Date: 2026-06-19. Category: analysis. A week is long enough to tell the difference between an announcement and an event. When Treasury [previewed the forthcoming §25F regulations on June 10, 2026](https://eftccredit.com/news/treasury-previews-25f-proposed-regulations-june-2026), the document carried a disclaimer that it was "subject to ongoing legal review" and that nothing was law until the proposed rule publishes, expected no later than the end of September. Yet in the days since, the federal Scholarship Tax Credit (FSTC / ECCA / §25F) conversation has visibly moved off the question of what Treasury said and onto what people are doing about it. Two things happened in that week worth pulling together: tax advisers turned the preview into actionable client guidance almost immediately, and the preview's most contested signal, that states cannot bolt their own conditions onto participating Scholarship Granting Organizations (SGOs), started shaping live state decisions. Neither is a new federal action, which is why this is analysis rather than a fresh headline, but together they are the real story of the week. The professional-services reception was fast and strikingly uniform. Within days the accounting and tax bar, CLA, Foster Swift, Bonadio, Roth&Co, and Brownstein, plus the trade press at Accounting Today and Financial Planning, converted the preview into the same short build-now checklist: open a dedicated §25F segregated account so that, under the preview's safe harbor for organizations largely devoted to scholarships, the 90%-of-income test can be measured against that account; budget for an annual independent financial and programmatic audit; and build donor receipting around the coming unique-donor-number system, under which an SGO never collects a donor's Social Security number. We have folded those items into our operator guides rather than restate them as if they were new here: the step-by-step [how-to-start-an-SGO checklist](https://eftccredit.com/learn/how-to-start-an-sgo#checklist) now carries them, alongside a clause-by-clause [walkthrough of the preview](https://eftccredit.com/learn/25f-proposed-regulations-preview). What made advisers willing to tell clients to act on a non-final document was one word, "reliance": Treasury said states, SGOs, and taxpayers can rely on the proposed regulations for tax year 2027. The lone caution every alert repeated: rely, but do not mistake a preview for the final rule. The preview's sharpest edge is not an operational detail but a question of power, and that is where the week's state news connects. Treasury previewed a "located in" standard and added that states "may not impose substantive SGO-specific requirements that are more restrictive than section 25F's requirements"; Deputy Assistant Secretary Kevin Salinger told stakeholders, more bluntly, that states cannot impose "substantive" rules on scholarship organizations beyond what federal law sets. That single line is the through-thread of the past week. [Vermont enacted Act 164 on June 18](https://eftccredit.com/news/vermont-h933-restrict-25f-opt-in-june-2026), a conditional opt-in that tries to steer the money toward public and approved-independent schools, exactly the kind of SGO-specific condition the preview signals is preempted, and the act's own clause tells the governor to decline if federal rules invalidate the conditions. Rhode Island built a legislative gate the same day, and Oregon's Gov. Kotek had already declined over this very complaint that Treasury would not let states write their own rules. The preview did not start that fight, but it told every state weighing an "opt in on our own terms" strategy that the terms may not be theirs to set, the unresolved question we examine in whether §25F is a [federal floor or a ceiling](https://eftccredit.com/news/federal-floor-or-ceiling-25f-state-restrictions-june-2026). It is worth being precise about what the preview deliberately left unresolved, because those gaps are where the next month of practitioner attention will go. Treasury did not settle the joint-filer treatment of the $1,700 cap; the prevailing professional read, reflected in Brownstein's Q&A guidance, is that the credit will be limited to $1,700 per return rather than doubled for married couples, the same conclusion we reach in our explainer on why the credit is [$1,700, not $3,400](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026), but it remains expectation rather than rule. The preview also left the credit's coordination with the Alternative Minimum Tax unaddressed, deferred the scope of eligible expenses under section 530 (tutoring, special-needs services, and the like) to a separate later workstream, and did not finalize the state-list deadline mechanics for the 2027 startup year. None of these is trivia: the joint-filer answer changes the math for two-earner donor households, and the 530 expense list determines what a scholarship can actually pay for. The forward read has not changed, only firmed up. The binding date is still the end of September, when the proposed regulations are expected, and the program still goes live January 1, 2027. What the past week added is permission to act: because reliance is granted, an operator can build to the preview now while flagging the genuinely open items (joint-filer cap, AMT, 530 expenses) as subject to change. For founders doing exactly that, the [how-to-start-an-SGO guide](https://eftccredit.com/learn/how-to-start-an-sgo) carries the full checklist, and the [national participation map](https://eftccredit.com/states) tracks where each state has landed, including the ones now testing the limits of state authority. Update, October 1, 2026: the regulations are out and resolve two of the open items named above. Spouses filing jointly are treated as separate taxpayers (up to $3,400 for a couple when each gives $1,700), and the credit is allowed against both the regular income tax and the alternative minimum tax, limited by the taxpayer's tax liability. The section 530 expense list is still coming in separate guidance. [Our read of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026). Sources: - U.S. Treasury press release: Treasury Previews Education Freedom Tax Credit Guidance (June 10, 2026): https://home.treasury.gov/news/press-releases/sb0527 - Treasury: Preview of Forthcoming Section 25F Guidance, remarks by DAS Kevin Salinger (PDF): https://home.treasury.gov/system/files/136/Preview-of-Forthcoming-Guidance.pdf - Accounting Today: Treasury plans guidance on new scholarship tax credit: https://www.accountingtoday.com/news/treasury-plans-guidance-on-new-scholarship-tax-credit - Current Federal Tax Developments: Treasury Previews Regulatory Framework for New Section 25F Education Freedom Tax Credit: https://www.currentfederaltaxdevelopments.com/blog/2026/6/11/treasury-previews-regulatory-framework-for-new-section-25f-education-freedom-tax-credit - CLA: IRS Guidance on SGOs and the Section 25F Tax Credit: https://www.claconnect.com/en/resources/blogs/nonprofits/irs-guidance-on-scholarship-granting-organizations-and-the-25f-tax-credit - Brownstein: Federal Scholarship Tax Credit Q&A Guide: https://www.bhfs.com/insight/federal-scholarship-tax-credit-qa-guide/ Canonical: https://eftccredit.com/news/25f-treasury-preview-one-week-later-what-changed-june-2026 ### Rhode Island's McKee signs the first-in-the-nation law stripping a governor's power to join §25F alone Date: 2026-06-18. Category: state-action. State: RI. Update, October 1, 2026: Treasury's release lists private-school tuition among the expenses scholarships can cover, and the temporary regulations bar a participating state from limiting the type of school recipients may attend or the types of qualified expenses, so a state that joined could not limit scholarships to tutoring, transportation, and technology as Gov. McKee described. Rhode Island donors are not shut out in the meantime: under the proposed regulations a taxpayer may give to an SGO on any participating state's list regardless of residence, and a married couple filing jointly can claim up to $3,400 when each spouse gives $1,700. [Our read of the state rules](https://eftccredit.com/news/one-national-standard-states-cannot-add-sgo-rules-25f-october-2026). Rhode Island Gov. Dan McKee, a Democrat, signed H7163 into law on Thursday, June 18, 2026, resolving a cliff-hanger we had been tracking and making Rhode Island the first state in the country to legally require both the legislature and the governor to agree before it can join the federal Education Freedom Tax Credit (§25F). McKee signed the measure the same day he signed a separate three-year moratorium on new public charter schools. The scholarship-tax-credit bill had cleared the General Assembly by veto-proof margins, 57 to 13 in the House and 34 to 4 in the Senate, with Rep. Susan Donovan and Sen. Sam Bell as lead sponsors, so a veto would likely have been overridden. We [first reported the bill's passage and transmittal](https://eftccredit.com/news/rhode-island-bill-requires-both-branches-approve-25f-opt-in-june-2026) on June 16. What McKee signed does not by itself decline §25F. It removes the governor's ability to enroll Rhode Island on his own through the IRS advance election ([Form 15714](https://eftccredit.com/news/irs-form-15714-advance-election-december-2025)) and instead requires an act of the General Assembly first. In his signing statement, McKee wrote that "scholarship-granting organization tax credits are, in practice, voucher programs that redirect public resources toward private institutions," and that "major decisions with long-term consequences for our students, schools, and taxpayers deserve thoughtful consideration and agreement among Rhode Island's elected leaders." He stopped short of slamming the door entirely, indicating he might support participation if Treasury's final guidance limited the credit to uses like "after-school tutoring, transportation, and educational technology, without supporting private school tuition." Reaffirming the line he has held for months, McKee said he is "not a voucher guy" but wanted to see the formal program rules first. The law is the most explicit version yet of a tactic Democratic-led states have reached for: rather than a flat gubernatorial refusal, it builds a structural barrier into the opt-in itself. Rhode Island's approach echoes [Vermont's H.933](https://eftccredit.com/news/vermont-h933-restrict-25f-opt-in-june-2026), which sought to condition any opt-in, and it goes a structural step beyond [Virginia, where the only sure exit still runs through a single governor's annual renewal decision](https://eftccredit.com/news/virginia-can-it-leave-25f-hb359-stalls-spanberger-renewal-june-2026) rather than a standing legal gate. It sharpens the unresolved federalism question we examine in our analysis of whether §25F is a [federal floor or a ceiling on state restrictions](https://eftccredit.com/news/federal-floor-or-ceiling-25f-state-restrictions-june-2026). It is the inverse of the calculus that pushed [Oregon's Gov. Kotek to decline](https://eftccredit.com/news/oregon-kotek-declines-25f-treasury-state-rule-limits-june-2026) a week earlier: where Kotek objected that Treasury would not let states add their own SGO rules, Rhode Island's legislature moved to make sure no future governor could opt in without it. The signing drew reaction on both sides. Sen. Bell defended the measure by looking past the current administration: "I don't think Governor McKee would opt in, however, I don't know what future governors are going to do." That comment captures why the law exists at all: McKee could already keep Rhode Island out simply by never filing the advance election, so the bill's real target is not him but whoever holds the office next, converting a one-signature gubernatorial decision into one that requires an act of the General Assembly. Signing rather than vetoing also spared McKee a fight he would have lost, since the legislature's margins were large enough to override a veto. Opponents called it a missed opportunity for federal dollars that cost the state treasury nothing. Former Providence Mayor Jorge Elorza, now CEO of Democrats for Education Reform, had urged McKee to veto the bill, calling participation "such a no-brainer," and Republican House Minority Leader Michael Chippendale characterized the law as rejecting "free federal money." That zero-cost design, a participating state spends nothing of its own to open the door, is the counter-pressure that keeps the question alive even after a state erects a gate. For Rhode Island donors, families, and prospective scholarship organizations, the practical takeaway is that Rhode Island has no path into §25F before the program's January 1, 2027 launch unless the General Assembly passes a participation bill and a governor signs it. The bill does not change the federal credit's mechanics: donors in participating states can give up to $1,700 to a qualified Scholarship Granting Organization and claim a dollar-for-dollar federal credit, a figure that is fixed regardless of how the state-conditions fight resolves, as we explain in our coverage of why the credit is [$1,700, not $3,400](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026). The broader opposition that produced this law, from teachers' unions to congressional Democrats pushing repeal, is detailed in our coverage of [who opposes §25F](https://eftccredit.com/news/who-opposes-25f-unions-democrats-repeal-bill-2026). Rhode Island's status, now gated behind the legislature, is tracked on our [Rhode Island state page](https://eftccredit.com/states/rhode-island) and the [national participation map](https://eftccredit.com/states). Operators who want the back-office infrastructure ready in case Rhode Island ever acts can review how the organizations work in our [explainers](https://eftccredit.com/learn) and the current landscape in the [SGO directory](https://eftccredit.com/sgos). Sources: - Boston Globe: R.I. lawmakers vote to block governor from opting into Trump school choice program (June 18, 2026): https://www.bostonglobe.com/2026/06/18/metro/ri-bill-trump-school-voucher-program/ - WPRI / Yahoo News: McKee, longtime charter advocate, signs charter school freeze and the §25F both-branches bill (June 18, 2026): https://www.yahoo.com/news/politics/articles/mckee-longtime-charter-advocate-signs-182742719.html - BillTrack50: RI H7163 (2026), status “Signed by Governor (on 06/18/2026)”: https://www.billtrack50.com/billdetail/1940130 - Office of the Governor of Rhode Island: bills-signed-into-law press releases: https://governor.ri.gov/press-releases/governor-mckee-signs-bills-law-1 Canonical: https://eftccredit.com/news/rhode-island-mckee-signs-both-branches-gate-25f-june-2026 ### Can Virginia get out of §25F? A Democratic bill to block it stalled, and the real lever is Spanberger's to pull Date: 2026-06-17. Category: analysis. State: VA. Update, October 1, 2026: under Treasury's temporary regulations, an advance election like Virginia's is complete only when the state submits its SGO list, due by February 15, 2027 for the 2027 year. A state that does not submit the list is, in effect, out for that year, and a completed election cannot be revoked, so for 2027 the decision point is whether Virginia files that list, not a later renewal. Separately, the proposed regulations treat spouses filing jointly as separate taxpayers, so a couple can claim up to $3,400 when each spouse gives $1,700. [The new state calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). Ever since outgoing Gov. Glenn Youngkin (R) made Virginia the [first state in the country to opt into](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026) the federal Education Freedom Tax Credit (§25F) days before leaving office, Virginia Democrats and the state's teachers' union have been looking for a way back out. With the program not launching until January 1, 2027, the question has become one of the most-watched in the country: can a new administration unwind an opt-in its predecessor locked in? The short answer, as of mid-June 2026, is that Virginia has not left, and that there are exactly two routes out, one stalled and one untouched. This piece lays out where each actually stands, because the rumor that Virginia is "getting out" runs well ahead of the record. The legislative route was tried and stalled. The vehicle was HB 359, carried by Del. Dan Helmer (D-Fairfax), which never named §25F but would have effectively closed the door on it. Rather than repeal anything, the bill imposed a sweeping regulatory framework on any private school that accepts scholarships funded by a state or federal tax credit: mandatory participation in Virginia's Standards of Learning assessments, Board of Education accountability ratings, nondiscrimination rules barring admissions decisions based on a family's statement of faith, financial audits, teacher-credentialing requirements, and civil penalties for noncompliance. For many of the faith-based schools that §25F scholarships are meant to reach, those conditions would make participation impossible, which is the point: one Virginia Christian school warned the bill would "eliminate" its ability to take part in "the federal tax credit for private school scholarships that goes into effect next year." HB 359 was reported from the House Education Committee on a party-line 13-to-7 vote on February 9, 2026, then continued to the 2027 session in House Appropriations two days later, so it did not pass this year. Its official status on the Virginia Legislative Information System is simply "Continued." It is parked, not dead. The surer route never required a bill at all. Because the §25F opt-in is an annual election, a participating state's governor must resubmit a qualifying list of Scholarship Granting Organizations to the U.S. Treasury each year, a successor is not bound by a predecessor's choice in future years. Gov. Abigail Spanberger (D), who inherited Youngkin's opt-in, can keep Virginia out simply by declining to file the next election, no legislation, no veto fight. The Virginia Education Association has pressed exactly that, urging the state to "proactively reject participation" and the General Assembly to "preemptively prohibit" it, and citing its own estimate that participation could cost Virginia public schools between $222 million and $956 million a year once the credit takes effect. Spanberger's campaign education plan pledged to "reject efforts to divert funding from public education to pay for voucher programs." And yet she has not pulled that lever. As of mid-June 2026, Spanberger has issued no withdrawal, declined no renewal, and her office has not said when or whether she will, leaving Virginia formally opted in. The decision point is approaching rather than passed: Treasury's [June 10 preview of the forthcoming §25F regulations](https://eftccredit.com/news/treasury-previews-25f-proposed-regulations-june-2026) removed the "wait for final guidance" rationale critics had urged her to honor before deciding, and the program's 2027 launch sets a real deadline for the first renewal call that is unmistakably hers. It is worth not confusing two different Virginia programs here: the state's own Education Improvement Scholarships Tax Credit is a separate, pre-existing measure, and HB 359's reach over "state or federal" aid is what links it to §25F. Notably, Youngkin moved the other direction on his way out, expanding Virginia's approved SGO roster with five additional organizations in January 2026, so any reversal would mean unwinding a participation framework that is already built. Virginia's dilemma is now the template other states are copying in more explicit form. Where Virginia's exit hinges on one governor's discretion, [Rhode Island just enacted a law](https://eftccredit.com/news/rhode-island-mckee-signs-both-branches-gate-25f-june-2026) requiring both the legislature and the governor to approve any opt-in, and [Vermont's H.933](https://eftccredit.com/news/vermont-h933-restrict-25f-opt-in-june-2026) sought to condition participation the same way, sharpening the unresolved question of whether §25F is a [federal floor or a ceiling](https://eftccredit.com/news/federal-floor-or-ceiling-25f-state-restrictions-june-2026) on what states may add. For Virginia donors, families, and prospective scholarship organizations, the practical takeaway is that nothing changes before the January 1, 2027 launch unless Spanberger declines to renew or a future General Assembly revives HB 359 and passes it. The federal credit's mechanics are unaffected either way: donors in participating states can give up to $1,700 to a qualified SGO and claim a dollar-for-dollar federal credit, a cap that is fixed regardless of how Virginia's fight resolves, as we explain in [why the credit is $1,700, not $3,400](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026). The broader opposition driving these moves is detailed in our coverage of [who opposes §25F](https://eftccredit.com/news/who-opposes-25f-unions-democrats-repeal-bill-2026). Virginia's status is tracked on our [Virginia state page](https://eftccredit.com/states/virginia) and the [national participation map](https://eftccredit.com/states); operators weighing whether to stand up an SGO in case Virginia stays in can start with our [explainers](https://eftccredit.com/learn) and the [SGO directory](https://eftccredit.com/sgos). Sources: - EdNewsVA: Virginia is first state to formally opt in, quoting Youngkin's letter to Treasury naming the initial eight SGOs (the governor's own release is no longer online after the change of administration): https://ednewsva.org/virginia-is-first-state-to-formally-opt-in-to-education-freedom-tax-credit/ - Virginia LIS: HB 359 (2026) bill details and history: https://lis.virginia.gov/bill-details/20261/HB359 - LegiScan: Virginia HB 359 (2026) votes and status: https://legiscan.com/VA/bill/HB359/2026 - FutureEd (Georgetown): 2026 state private-school-choice legislative tracker (HB 359 regulates schools taking state or federal tuition assistance): https://www.future-ed.org/legislative-tracker-2026-state-private-school-choice-bills/ - Regents School: What you need to know about HB 359 (would eliminate participation in the federal tax credit for private school scholarships): https://regents-school.org/article/2026-02-02-virginia-private-school-scholarships-threatened-what-you-need-to-know-about-hb-359 - Virginia Education Association: Federal vouchers, local consequences, what's at stake for Virginia's public schools: https://www.veanea.org/federal-vouchers-local-consequences-whats-at-stake-for-virginias-public-schools/ - Virginia Mercury / Dogwood: Federal school voucher program and the call to opt out in future years (May 29, 2026): https://vadogwood.com/news/federal-school-voucher-program-harms-virginias-most-vulnerable-families/ - WVVA: Virginia adds five more scholarship organizations to Education Freedom Tax Credit as demand soars (Jan. 16, 2026): https://www.wvva.com/2026/01/16/virginia-adds-five-more-scholarship-organizations-education-freedom-tax-credit-demand-soars/ - Cornell LII: 26 U.S.C. §25F: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/virginia-can-it-leave-25f-hb359-stalls-spanberger-renewal-june-2026 ### Rhode Island passes a first-in-the-nation bill requiring both branches to approve any §25F opt-in, and sends it to McKee Date: 2026-06-16. Category: state-action. State: RI. Rhode Island’s General Assembly has passed a first-in-the-nation measure aimed squarely at the federal Scholarship Tax Credit. On June 16, 2026, lawmakers transmitted H7163, with its Senate companion S2139, to Governor Dan McKee (D), a bill that prohibits Rhode Island from participating in the §25F scholarship-granting-organization tax credit unless both the General Assembly and the governor approve. The House passed it 57 to 13 and the Senate 34 to 4, with Rep. Susan Donovan and Sen. Sam Bell as lead sponsors. As of its transmittal the bill is not yet law: McKee has until late June to veto it or let it take effect, and his office said he was reviewing it. The bill’s official title leaves little doubt about its purpose. It "prohibits participation in federal school voucher tax credit for contributions to scholarship-granting organizations unless both the general assembly and the governor approve such participation." It references the enacting federal provision directly, Pub. L. 119-21, §70411 (2025), which created §25F. That credit lets individual taxpayers claim a dollar-for-dollar federal credit of up to $1,700 for donations to qualified Scholarship Granting Organizations, with the program taking effect January 1, 2027. The practical effect of the Rhode Island bill, if enacted, would be to remove the governor’s ability to enroll the state on his own and to require an act of the legislature first. McKee has not tipped his hand. He has said he is "not a voucher guy" but wants to see Treasury’s forthcoming regulations before deciding whether Rhode Island should participate at all. That posture leaves the state’s §25F status genuinely undecided, and the pending bill would gate any future decision behind the General Assembly. It is the most explicit version yet of a tactic other Democratic-led states have reached for: shaping or constraining how, or whether, a state plugs into the federal credit. Rhode Island’s approach echoes [Vermont’s H.933](https://eftccredit.com/news/vermont-h933-restrict-25f-opt-in-june-2026), which sought to condition its opt-in, and fits the broader question of whether states can add their own limits to the program that we examine in [our analysis of §25F as a federal floor or ceiling](https://eftccredit.com/news/federal-floor-or-ceiling-25f-state-restrictions-june-2026). The Rhode Island move runs in the opposite direction from the wave of opt-ins elsewhere. Republican governors across the country have enrolled their states, and even some Democratic governors, including [New York’s Kathy Hochul](https://eftccredit.com/news/new-york-governor-hochul-opts-in-may-2026), have signaled intent to participate, while others have declined outright. The opposition that has organized against §25F, from teachers’ unions to congressional Democrats pushing repeal, is detailed in [our coverage of who opposes the credit](https://eftccredit.com/news/who-opposes-25f-unions-democrats-repeal-bill-2026). Rhode Island is the first state to translate that opposition into a structural barrier on the opt-in itself rather than a flat refusal by the governor. What happens next is procedural but consequential. McKee can sign the bill, veto it, or allow it to become law without his signature; if it takes effect, Rhode Island would be the first state to legally require both branches to agree before joining §25F. For families and prospective scholarship organizations in the state, the bill does not by itself decide participation, it decides who gets to decide. We are tracking the governor’s action and Rhode Island’s status on our [Rhode Island state page](https://eftccredit.com/states/rhode-island) and the [national participation map](https://eftccredit.com/states), and will update this post when McKee acts. Update (June 18, 2026): McKee signed H7163 into law, making Rhode Island the first state to legally require both branches to approve any §25F opt-in. In a signing statement he called the credits "in practice, voucher programs," while leaving open the possibility of support if Treasury's final rules narrow the eligible uses. See our full report on [the signing](https://eftccredit.com/news/rhode-island-mckee-signs-both-branches-gate-25f-june-2026). Sources: - Boston Globe: R.I. lawmakers vote to block governor from opting into Trump school choice program (June 18, 2026): https://www.bostonglobe.com/2026/06/18/metro/ri-bill-trump-school-voucher-program/ - BillTrack50: RI H7163 (2026) bill detail, title, sponsor party, status and transmittal date: https://www.billtrack50.com/billdetail/1940130 - Office of the Governor of Rhode Island: bill-transmittal press releases: https://governor.ri.gov/press-releases/governor-mckee-signs-bills-law-12 Canonical: https://eftccredit.com/news/rhode-island-bill-requires-both-branches-approve-25f-opt-in-june-2026 ### Who's fighting §25F, and on what grounds: the unions, Democrats, and a repeal bill Date: 2026-06-15. Category: analysis. Update, October 5, 2026: the NAACP Legal Defense Fund, which was on the White House review meeting log for the rules in September, said the proposed rules "confirm what we expected, that their federal private school voucher program is designed to direct public resources to private schools and organizations and will provide little benefit to the 90% of children who attend public schools" (policy director Demetria McCain, quoted by Common Dreams). In Virginia, the state teachers union [asked Gov. Spanberger not to file the state's 2027 SGO list](https://eftccredit.com/news/virginia-2027-hinges-on-sgo-list-vea-urges-spanberger-not-to-file-october-2026), which would keep Virginia out for the first year. Update, October 2, 2026: Opponents restated their case the day Treasury released the §25F rules. AFT President Randi Weingarten said governors "should reject it," arguing that "they will have no say or oversight over how the vouchers operate." The National Education Association said the program prevents states' "ability to protect students or ensure meaningful benefits for public schools." In Massachusetts, AFT Massachusetts called on Gov. Healey to "formally and unequivocally opt-out," and the Massachusetts Association of School Superintendents said the program "threatens to exacerbate disparities between public and private schools." Supporters answer that public school students are eligible and that §25F credits come from federal, not state, budgets. [Where the undecided governors stand](https://eftccredit.com/news/democratic-governors-review-25f-rules-hochul-pritzker-sherrill-healey-october-2026). For donors weighing a contribution and operators thinking about launching a Scholarship Granting Organization, it's worth understanding who is fighting the federal Scholarship Tax Credit (FSTC / ECCA / §25F) and why, because the opposition is organized, well-funded, and unlikely to fade before the program launches January 1, 2027. It runs along three fronts: the national teachers' unions, Democratic lawmakers in Congress, and a handful of state education boards. The throughline is a single framing, that a tax credit for donations to scholarship organizations is a private-school voucher by another name, one that diverts public resources from public schools. The unions are the loudest voice. In a formal comment dated December 26, 2025, the National Education Association called §25F "a nationwide private school voucher program that diverts public resources away from public education." The position is not new: a joint NEA and AFT resolution, on the books since 1982, flatly opposes efforts to "direct public funds to non-public independent and church-run schools by means of tuition tax credits," arguing they damage the funding base of public schools and risk a "class education system." What's notable is the tactical shift in the NEA's 2025 comment, rather than seeking to kill the credit through the rulemaking, it asked Treasury for aggressive state oversight and to treat federal law as "a floor, not a ceiling" on state requirements, the precise position [Treasury's June preview appears to reject](https://eftccredit.com/news/federal-floor-or-ceiling-25f-state-restrictions-june-2026). The unions sharpened the message in mid-2026: on June 23, AFT President Randi Weingarten and NEA President Becky Pringle issued a joint open letter urging every Democratic governor to refuse to opt in, calling §25F "a Trojan horse carrying near-universal K-12 private school vouchers" and pinning a roughly $50 billion annual price tag on it. The timing was deliberate, landing days before the NEA's July Representative Assembly and the AFT's July convention, but it is an exhortation rather than a legal lever: the unions cannot stop a state that has already opted in, and several Democratic governors have moved to participate anyway, with North Carolina's Josh Stein going so far as to look for ways to [route the credit toward public-school students](https://eftccredit.com/news/north-carolina-stein-public-school-sgo-pivot-25f-june-2026). The Representative Assembly itself, held July 3-7 in Denver, delivered the follow-through in rhetoric: NEA Executive Director Kim Anderson told delegates that "for the first time ever, we're up against a federal voucher program" and called for "more governors willing to reject it, state by state," naming Minnesota, Wisconsin, Oregon, and Rhode Island as the model. It is the same posture in a louder room, a campaign to persuade holdout governors, with no mechanism to reverse the 30 states already on the IRS's official roster or to move the January 1, 2027 launch date. The AFT followed at its own convention in Washington, adopting a resolution on July 19, 2026, "Keep Public Funds for Public Schools," that opposes the credit, referring to it by its public-law number as "the Federal Education Tax Credit established under P.L. 119-21," and pledges the union's support for the Keep Public Funds in Public Schools Act; notably the resolution never uses the terms "§25F" or "Education Freedom Tax Credit." Maryland Governor Wes Moore, speaking at that same convention, called the program a "tax scheme" that steers public funding toward private schools, his sharpest language yet, though Maryland has still made no formal decision. Like the letter and the assembly floor speeches, an adopted union resolution and a governor's rhetoric are exhortations, not levers: neither unwinds a completed state election nor changes the federal launch date. The legislative front is more direct. [Senate Democrats introduced a bill in April 2026 to repeal the credit outright](https://eftccredit.com/news/senate-democrats-introduce-ecca-repeal-bill-april-2026), a long shot in the current Congress but a marker of where the party's base sits, and in June 2026 House Democrats led by Reps. Gwen Moore and Mark Pocan added a companion bill, H.R. 9289, the "Keep Public Funds in Public Schools Act," introduced June 11 and referred to the Ways and Means Committee, making the repeal push bicameral. The House bill has drawn dozens of Democratic cosponsors but no Republican support and no committee action. Both are best read as position-setting rather than a near-term threat: §25F was enacted only last year through reconciliation, Republicans control both chambers, and there is no path to repeal over a presidential veto, so the statute's foundation is not in immediate danger. At the state level, the opposition has begun to harden from resolutions into actual law. On June 18, 2026, Rhode Island Governor Dan McKee signed H7163, a first-known "double-lock" statute that bars the state from opting into §25F unless both the General Assembly and the governor agree, stripping any future governor of the power to make the IRS advance election alone. Its near-term effect is small, McKee had shown no intention of opting in, and because the credit is federal rather than state-funded, Rhode Island donors can still contribute to qualifying Scholarship Granting Organizations in states that have opted in and claim the credit, but it is the clearest sign yet that opponents are moving from rhetoric to statute where they hold the votes. Michigan's State Board of Education voted in May 2026 to urge Governor Gretchen Whitmer not to opt the state in; on September 10 its president, Pamela Pugh, and the Michigan Education Association renewed that call, with the MEA arguing that public schools earning meaningful revenue under the program "would need to charge fees for non-mandated services," while Whitmer's office said she is still waiting for full Treasury guidance. And in Maryland the state teachers' union (MSEA) has warned that the program's roughly $50 billion in projected annual federal cost could crowd out other education funding. These are not fringe actors, they are the institutional core of the public-education establishment in blue and purple states. One feature of §25F is that Congress wrote it expecting a court fight. The statute gives any parent of a student who has received a scholarship the right to intervene to defend the law's constitutionality in any state or federal challenge, a clear nod to anticipated Establishment Clause litigation over public support flowing to religious schools. The precedent cuts toward the program's defenders: in a 2011 Arizona case, the U.S. Supreme Court held that taxpayers lacked standing to challenge a state tuition-tax-credit program, reasoning that a tax credit is not a government expenditure. For now the opposition to §25F is political and regulatory rather than judicial, but the intervention clause suggests the drafters expect that to change. We track each state's posture on the [participation map](https://eftccredit.com/states), and explain the program itself in [what is the FSTC](https://eftccredit.com/learn/what-is-fstc). Sources: - National Education Association: comment on Notice 2025-70 (Dec. 26, 2025): https://www.nea.org/advocating-for-change/action-center/letters-testimony/notice-2025-70-request-comments-individual-tax-credit-qualified-contributions-scholarship-granting - American Federation of Teachers: Joint NEA/AFT Resolution on Tuition Tax Credits: https://www.aft.org/resolution/joint-neaaft-resolution-tuition-tax-credits - American Federation of Teachers: resolution “Keep Public Funds for Public Schools: Oppose Vouchers” (89th Convention, adopted July 19, 2026): https://www.aft.org/resolution/keep-public-funds-public-schools-oppose-vouchers - NEA press release: Executive Director addresses delegates at the 105th Representative Assembly (July 5, 2026): https://www.nea.org/about-nea/media-center/press-releases/nea-executive-director-addresses-delegates-105th-representative-assembly - Chalkbeat: Will Whitmer opt Michigan in? Not if education board members have a say (May 12, 2026): https://www.chalkbeat.org/detroit/2026/05/12/michigan-state-board-education-opposes-federal-tax-credit-scholarship/ - WPR: Wisconsin congressional Democrats want to repeal national voucher for education (June 2026, House companion bill): https://www.wpr.org/news/wisconsin-congressional-democrats-want-repeal-national-voucher-for-education - Congress.gov: H.R. 9289, Keep Public Funds in Public Schools Act (introduced June 11, 2026): https://www.congress.gov/bill/119th-congress/house-bill/9289 - NEA / AFT: joint letter calling on Democratic governors to reject the federal voucher scheme (June 23, 2026): https://www.nea.org/about-nea/media-center/press-releases/aft-and-nea-call-democratic-governors-reject-trump-private-school-voucher-scheme - Rhode Island H7163: bill text (signed June 18, 2026, requires legislative + gubernatorial approval to opt into §25F): https://webserver.rilegislature.gov/BillText26/HouseText26/H7163.pdf Canonical: https://eftccredit.com/news/who-opposes-25f-unions-democrats-repeal-bill-2026 ### Maryland is a marquee §25F holdout, and Wes Moore isn't tipping his hand Date: 2026-06-14. Category: state-action. State: MD. Update, October 1, 2026: Treasury's proposed regulations let a donor give to an SGO on any participating state's list regardless of where the donor lives, so Marylanders can claim the credit of up to $1,700 per taxpayer even if Maryland stays out; Maryland's choice decides whether Maryland students can get §25F scholarships. Under the temporary regulations, a state joining for 2027 must file its advance election on Form 15714 by January 1, 2027 and its SGO list by February 15, 2027. [The 2027 calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). Maryland has become one of the most-watched holdouts on the federal Scholarship Tax Credit (FSTC / ECCA / §25F), and Governor Wes Moore is keeping his options open. As the program's January 1, 2027 launch approaches, the Moore administration has declined to comment on whether the state will participate, and the Maryland State Department of Education has not taken a position. That silence is itself notable: Moore is a high-profile Democrat in a state where the decision carries real money and real political risk in both directions. The case for opting in rests on the fact that it costs the state nothing, the scholarships are funded by donors claiming a federal credit, not by Maryland's budget. Analysts have pressed the point that public schools are not shut out. Georgetown University researcher Marguerite Roza has estimated that Maryland public-school districts could raise upwards of $34 million by setting up their own Scholarship Granting Organizations, on the order of 20,000 donors contributing the maximum $1,700 credit each, to fund tutoring, transportation, technology, and specialized services for their own students. School-choice advocates have been blunter still, with one calling it "governance malpractice" for Moore not to opt in, given that Maryland residents are already eligible to donate but cannot claim the credit unless the state participates. The case against is mostly political and fiscal. The Maryland State Education Association has warned that the program's roughly $50 billion in projected annual federal cost could ultimately reduce other federal education funding, and critics point to a largely unregulated scholarship market and the risk of enrollment and funding losses for traditional public schools. Underneath it all is the voucher framing that drives union opposition nationally, the concern that a program nominally open to public-school students is fundamentally designed to move money toward private tuition. Two timing facts shape Moore's decision. There is no single statutory deadline, but Maryland must elect to participate before the credit becomes available for the 2027 tax year, and Scholarship Granting Organizations need lead time to be designated and to begin collecting donations. And the calculus just narrowed: [Treasury's June preview signaled that states cannot attach their own restrictions](https://eftccredit.com/news/federal-floor-or-ceiling-25f-state-restrictions-june-2026), such as limiting the money to public schools, which removes the conditional middle path a governor like Moore might have preferred and leaves a cleaner in-or-out choice. Maryland's current status, and every other state's, is tracked on our [Maryland state page](https://eftccredit.com/states/maryland); founders can see who is already operating on the [SGO directory](https://eftccredit.com/sgos). Update, September 15, 2026: Moore still has not decided, and his office says he wants to see the federal regulations first. The Daily Record reports that the Maryland Catholic Conference and the Maryland Council for American Private Education are now pressing him to opt in. The Catholic Conference's Garrett O'Day pointed to the public-school side of the program: "There's a massive swath of uses for public school students that we as a state could tip into." Democrats for Education Reform estimates Maryland could raise $550 million if 30% of taxpayers with at least $1,700 in federal tax liability donated. The Maryland State Education Association remains opposed. Sources: - The Daily Record: Religious schools push for MD to join federal tax credit program (Madeleine O'Neill, Sept. 15, 2026): https://thedailyrecord.com/2026/09/15/private-schools-education-freedom-tax-credit-trump-moore/ - The Baltimore Banner: Will Maryland Gov. Wes Moore opt in to a federal school voucher plan?: https://www.thebanner.com/education/k-12-schools/maryland-school-voucher-sgo-GCB4W5HWJFCVBGALCZHOOGZTAQ/ - Defense of Freedom Institute: EFTC State Participation Status tracker: https://dfipolicy.org/education-freedom-tax-credit/ Canonical: https://eftccredit.com/news/maryland-wes-moore-25f-decision-pending-june-2026 ### Vermont wants into §25F on its own terms, steering the money toward public schools. The federal rules may not let it. Date: 2026-06-13. Category: state-action. State: VT. Most of the fight over the federal Scholarship Tax Credit (FSTC / ECCA / §25F) has been binary: a state opts in, or it doesn't. Vermont is testing a third option, opt in, but rewrite the program so the money lands where the legislature wants it. On May 29, 2026 the Vermont House passed H.933, a miscellaneous tax bill that, among dozens of unrelated provisions, sets up a state framework for participating in §25F. The bill was delivered to Governor Phil Scott on June 12, 2026. As of this writing he has neither signed nor vetoed it. What makes H.933 unusual is not that it opts Vermont in, it's the conditions attached. Rather than simply authorizing the Governor to submit a list of Scholarship Granting Organizations to the U.S. Treasury, the bill narrows which organizations can be listed: they must be nonprofits whose core mission is providing educational opportunities to economically underprivileged students, and grants are steered toward students attending public schools or approved independent schools capable of receiving public tuition, rather than private or religious tuition broadly. Lawmakers were candid about the goal, which was to channel the federal credit toward Vermont's public-school population. The bill also includes a self-limiting clause: if federal regulations invalidate the state's guidance, the Governor is to decline to participate until the General Assembly enacts new legislation addressing the conflict. So this is a narrowed, conditional opt-in, not the flat opt-out some have described, and the Governor's authority to participate is intact rather than stripped. Vermont is the sharpest version of an impulse several Democratic-leaning states have shared. Through the spring, governors and legislators floated conditioning participation on serving low-income families, prioritizing students with disabilities, requiring academic standards, or confining the dollars to public schools. The instinct is understandable given how §25F is structured, donors, not the state treasury, fund the scholarships, but the state controls the list of eligible organizations, which looks like a lever for shaping the program. Vermont simply pulled that lever the hardest and wrote the restrictions into statute. The problem is that Treasury has signaled the lever may not exist. In its June 2026 preview of the forthcoming §25F regulations, Treasury defined the "located in" standard for SGOs and stated that states may not impose SGO-specific requirements more restrictive than §25F's own, and it said "school" will be defined consistent with section 530 to include public, private, and religious K-12 schools as determined under state law. Deputy Assistant Secretary Kevin Salinger told stakeholders that states cannot impose "substantive" rules on scholarship organizations beyond what federal law sets, a position that contradicted Education Secretary Linda McMahon's earlier assurances to Congress that states would shape their own programs. If that holds in the final rule, Vermont's economically-underprivileged-only and public-schools-first conditions would be preempted, and by the terms of H.933's own clause, that could trigger the Governor to decline participation until lawmakers rewrite the statute. For donors, families, and prospective SGO founders, Vermont is worth watching as a bellwether rather than a settled outcome. It tests whether a state can accept the federal credit while redirecting it away from the private and religious schools the statute was written to fund, and the answer will come from Treasury's final regulations, expected by the end of September 2026, as much as from Montpelier. We've covered [what Treasury previewed about state authority and the SGO rules](https://eftccredit.com/news/treasury-previews-25f-proposed-regulations-june-2026), the [veto-override route other divided states have used](https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026), and [where Democratic governors have landed](https://eftccredit.com/news/democratic-governors-split-on-25f-2026). Vermont's current status, and every other state's, is tracked on our [Vermont state page](https://eftccredit.com/states/vermont) and the [state participation map](https://eftccredit.com/states). Update, June 18, 2026: Governor Phil Scott signed H.933 into law as Act 164. Enactment makes Vermont's conditional, public-schools-first §25F framework binding statute, but it does not change the analysis above: because Act 164 directs the Governor to decline participation if federal regulations invalidate the state's conditions, and Treasury's preview signals those conditions are likely preempted, whether Vermont ends up in or out of §25F still turns on the final regulations expected by the end of September 2026. Update, August 11, 2026: Act 164's nondiscrimination conditions on SGO designation, codified at 3 V.S.A. § 24(b)(5), are now cited by name in a Supreme Court brief. Forty-three members of Congress pointed to Vermont as the state that has already done what they say [the Court's ruling in St. Mary Catholic Parish v. Roy will decide the legality of](https://eftccredit.com/news/supreme-court-november-3-argument-state-conditions-religious-schools-25f-august-2026). Argument is set for November 3, 2026. Update, October 1, 2026: the regulations are out and adopt the position the preview signaled. The temporary regulations bar a participating state from requiring SGOs to operate under rules more restrictive than §25F's, including limits on the type of school recipients may attend or the expenses scholarships may cover. Under Act 164, that is the circumstance in which the Governor is directed to decline participation until the General Assembly acts again. We will report Vermont's next step. [Our read of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026). Sources: - Vermont Legislature: H.933 (2026) signed by the Governor June 18, 2026 as Act 164 (bill status): https://legislature.vermont.gov/bill/status/2026/H.933 - VTDigger: Vermont lawmakers hope to steer new federal school choice tax credit funds toward public schools (Apr. 24, 2026): https://vtdigger.org/2026/04/24/vermont-lawmakers-hope-to-steer-new-federal-school-choice-tax-credit-funds-toward-public-schools/ - Vermont Legislature: H.933 bill status (delivered to Governor June 12, 2026): https://legislature.vermont.gov/bill/status/2026/H.933 - Chalkbeat: McMahon said states would shape tax credit scholarship. Treasury said no. (June 11, 2026): https://www.chalkbeat.org/2026/06/11/treasury-previews-tax-credit-scholarship-rules-that-shape-school-choice/ - U.S. Treasury press release: Treasury Previews Education Freedom Tax Credit Guidance (June 10, 2026): https://home.treasury.gov/news/press-releases/sb0527 Canonical: https://eftccredit.com/news/vermont-h933-restrict-25f-opt-in-june-2026 ### Arizona's §25F opt-in died in budget negotiations: the language was in the vetoed GOP tax omnibus but absent from the signed bipartisan budget Date: 2026-06-13. Category: state-action. State: AZ. After Gov. Katie Hobbs vetoed two standalone bills to join the federal Scholarship Tax Credit (FSTC / ECCA / §25F), Arizona Republicans tried a third route this session: they folded the opt-in into their proposed 2026-27 budget tax omnibus, HB 4152. That bill went well beyond a one-line election. It added an entirely new chapter to Arizona's tax code, A.R.S. Title 43, Chapter 18, titled "Scholarship Granting Organizations," whose lead section, §43-1801(A), reads in full capitals: "THIS STATE ELECTS TO PARTICIPATE IN THE FEDERAL TAX CREDIT ESTABLISHED BY SECTION 25F OF THE INTERNAL REVENUE CODE FOR INDIVIDUALS WHO MAKE QUALIFIED CONTRIBUTIONS TO SCHOLARSHIP GRANTING ORGANIZATIONS." The bill directed the Arizona Department of Revenue to certify SGOs that meet the §25F requirements and to submit that list to the U.S. Secretary of the Treasury, effective for taxable years beginning after December 31, 2026 (that is, the program's January 1, 2027 start). The opt-in never survived contact with the budget fight. On May 5, 2026, Hobbs vetoed the entire Republican budget package, House Bills 4138 through 4153, en masse, rejecting the roughly $17.9 billion plan as "unbalanced and reckless" and calling for negotiations to resume. HB 4152, the tax omnibus carrying the §25F election, was one of the bills caught in that mass veto. There was no override. Instead, the two sides negotiated a replacement, and the §25F opt-in did not make the cut. This is the same fundamental objection Hobbs has voiced before: in vetoing the earlier standalone bills she pointed to a lack of accountability guardrails and the absence of final federal guidance, the reasoning detailed in our coverage of her [January veto of SB 1106](https://eftccredit.com/news/arizona-governor-hobbs-vetoes-fstc-opt-in-january-2026) and her [April veto of SB 1142](https://eftccredit.com/news/arizona-governor-hobbs-vetoes-second-opt-in-bill-april-2026). The budget Hobbs ultimately signed on June 13, 2026, the bipartisan tax omnibus HB 4168 (a roughly $18.3 billion package), is silent on the question. A full-text review of the engrossed bill turns up no §25F election, no "Scholarship Granting Organizations" chapter, no certification mandate, and no instruction to submit any list to the Secretary of the Treasury. The opt-in language present in the vetoed HB 4152 was simply not carried over into the compromise that became law. In other words, the provision was not defeated on its merits in a floor vote; it was dropped as part of reaching a bipartisan deal, the most quietly fatal way for a policy to disappear. The net result is that, across three vehicles in a single session (SB 1106 in January, SB 1142 in April, and now HB 4152 inside the vetoed budget), Arizona has declined to opt in, and the signed budget locks that posture in for now. Unless a future session revives the language or a future governor acts, Arizona will not have certified SGOs and will not appear on the Treasury participating list when §25F goes live on January 1, 2027. That outcome is striking given that Arizona runs one of the country's largest existing state scholarship and Empowerment Scholarship Account programs and already has mature SGO infrastructure. Arizona donors can still claim the federal credit (up to $1,700 per taxpayer) by giving to SGOs in states that have opted in, though those scholarships would fund students elsewhere. We track Arizona's status and every other state's on our [Arizona state page](https://eftccredit.com/states/arizona) and the [state participation map](https://eftccredit.com/states); founders and operators can start with our [explainer on how the credit works](https://eftccredit.com/learn) and our [directory of Scholarship Granting Organizations](https://eftccredit.com/sgos). Sources: - HB 4152 engrossed bill text (azleg.gov): new A.R.S. Title 43, Chapter 18 'Scholarship Granting Organizations,' §43-1801 §25F election: https://www.azleg.gov/legtext/57leg/2R/bills/HB4152H.pdf - HB 4152 House Bill Summary (azleg.gov): 'Declares that Arizona elects to participate in the federal tax credit for individuals who make qualified contributions to SGOs': https://www.azleg.gov/legtext/57leg/2R/summary/H.HB4152_042826_CAUCUSCOW.DOCX.htm - HB 4168 engrossed bill text (azleg.gov): the signed bipartisan tax omnibus, containing no §25F / SGO language: https://www.azleg.gov/legtext/57leg/2R/bills/HB4168H.pdf - Arizona Capitol Times: Hobbs signs $18.3B bipartisan budget (June 13, 2026): https://azcapitoltimes.com/news/2026/06/13/hobbs-signs-18-3-billion-bipartisan-budget/ - Arizona Mirror: Hobbs vetoes 'unbalanced and reckless' Republican budget (May 5, 2026): https://azmirror.com/2026/05/05/hobbs-vetoes-unbalanced-and-reckless-republican-budget-calls-for-negotiations-to-resume/ - Phoenix New Times veto tracker: HB 4138-4153 vetoed en masse May 5, 2026 as the GOP budget: https://www.phoenixnewtimes.com/news/arizona-governor-katie-hobbs-veto-tracker-2026-40648356/ Canonical: https://eftccredit.com/news/arizona-25f-opt-in-stripped-from-signed-budget-hb4168-june-2026 ### Floor or ceiling? Treasury's §25F preview signals states can't add their own restrictions Date: 2026-06-12. Category: analysis. Most of the §25F coverage has been a headcount, which states are in, which are out. The more consequential fight is quieter and structural: when a state opts into the federal Scholarship Tax Credit (FSTC / ECCA / §25F), does federal law set a floor that the state can build higher rules on top of, or a ceiling the state has to accept as written? That single question decides whether a participating state can steer the money toward public schools, limit eligible organizations to those serving low-income families, or attach its own academic and accountability tests. Treasury's June 2026 preview pointed clearly toward ceiling. In remarks on June 9, 2026 and an accompanying release on June 10, Deputy Assistant Secretary for Tax Policy Kevin Salinger previewed the forthcoming proposed regulations. On the question that matters here, Treasury indicated that an organization is "located in" a state if it is authorized to do business there and complies with the state's generally applicable charitable-organization rules for transparency, accountability, and fraud prevention, and that states may not impose organization-specific requirements more restrictive than §25F's own. As Chalkbeat summarized it, states cannot impose "substantive" rules on scholarship groups beyond what federal law sets, a reading that contradicted assurances Education Secretary Linda McMahon had given that states would shape their own programs. Treasury also said "school" will be defined consistent with section 530 to include public, private, and religious K-12 schools as determined under state law. The floor-versus-ceiling framing is not abstract, it is exactly what the program's opponents asked for. In a formal comment dated December 26, 2025, the National Education Association urged Treasury to acknowledge that federal law sets "a floor, not a ceiling" on state requirements for certifying scholarship organizations, and to require robust state oversight. Vermont went further and legislated the strings directly, with [H.933 narrowing eligible organizations to nonprofits serving economically underprivileged students and steering grants toward public and approved independent schools](https://eftccredit.com/news/vermont-h933-restrict-25f-opt-in-june-2026). And several undecided Democratic governors, Gretchen Whitmer in Michigan, Ned Lamont in Connecticut, and Wes Moore in Maryland, had largely been waiting for the federal rules before committing, with public-school priorities clearly on their minds. Treasury's preview points away from all of it. If the proposed regulations hold this line when they publish, expected by the end of September 2026, the practical effect is to collapse a three-way choice into a binary. A state can opt in on federal terms or stay out; the "opt in but wall it off" option largely disappears. Vermont's own bill anticipates this, directing the Governor to decline participation if federal rules invalidate the state's guidance until the legislature acts again. For donors and Scholarship Granting Organizations, a ceiling is the friendlier outcome: a more uniform national program with fewer state-by-state eligibility traps. We've covered [the full preview of the proposed rules](https://eftccredit.com/news/treasury-previews-25f-proposed-regulations-june-2026) and [where Democratic governors have landed](https://eftccredit.com/news/democratic-governors-split-on-25f-2026); current status for every state is on the [participation map](https://eftccredit.com/states). Update, August 11, 2026: the constitutional half of this question now has a hearing date. The Supreme Court set argument for November 3, 2026 in St. Mary Catholic Parish v. Roy, and forty-three members of Congress have told the Court that [the rule it adopts will decide whether states can use nondiscrimination conditions to exclude religious schools from §25F](https://eftccredit.com/news/supreme-court-november-3-argument-state-conditions-religious-schools-25f-august-2026). Treasury's preview addresses what a state may require of an organization; the case addresses what the Free Exercise Clause permits either way. Update, October 1, 2026: the published rules came down on the ceiling side. The temporary regulations, which apply from September 1, 2026, bar a participating state from requiring SGOs to operate under rules more restrictive than §25F, "such as by limiting the type of school that scholarship recipients may attend or the types of qualified elementary or secondary education expenses for which scholarship funds may be used," and require each state to list every qualifying organization that asks to be included. [Our read of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026). Sources: - Chalkbeat: McMahon said states would shape tax credit scholarship. Treasury said no. (June 11, 2026): https://www.chalkbeat.org/2026/06/11/treasury-previews-tax-credit-scholarship-rules-that-shape-school-choice/ - U.S. Treasury press release: Treasury Previews Education Freedom Tax Credit Guidance (June 10, 2026): https://home.treasury.gov/news/press-releases/sb0527 - National Education Association: comment on Notice 2025-70 (Dec. 26, 2025): https://www.nea.org/advocating-for-change/action-center/letters-testimony/notice-2025-70-request-comments-individual-tax-credit-qualified-contributions-scholarship-granting Canonical: https://eftccredit.com/news/federal-floor-or-ceiling-25f-state-restrictions-june-2026 ### Oregon Gov. Kotek declines §25F after reconsidering, citing Treasury limits on state SGO rules Date: 2026-06-12. Category: state-action. State: OR. Update, October 1, 2026: the temporary regulations, which apply from September 1, 2026, confirm the limit Gov. Kotek objected to: a participating state may not require SGOs to operate under rules more restrictive than §25F's. Oregon taxpayers can still claim the credit, because the proposed regulations let a taxpayer give to an SGO on any participating state's list regardless of residence and treat spouses filing jointly as separate taxpayers (up to $3,400 for a couple when each spouse gives $1,700). Oregon students generally cannot receive §25F scholarships while the state stays out. [How giving across state lines works](https://eftccredit.com/news/give-to-any-of-30-states-25f-scholarships-follow-student-residence-october-2026). Oregon Gov. Tina Kotek, a Democrat, announced on Friday, June 12, 2026 that Oregon will not opt into the federal Education Freedom Tax Credit (§25F), the dollar-for-dollar tax credit of up to $1,700 per taxpayer for donations to qualifying Scholarship Granting Organizations (SGOs). As reported by Education Week, Kotek pointed to Treasury's recent information release confirming it would not let states "impose substantive SGO-specific requirements that are more restrictive" than federal law, and said that limitation "indicates states like Oregon will not have the flexibility they need to participate in alignment with our values." The decision is a non-election, not a formal filing: declining §25F simply means Oregon's governor does not submit the IRS advance election (Form 15714) or designate state SGOs, so the program never turns on for Oregon residents. Oregon does not appear among the participating states on the IRS newsroom roster dated June 8, 2026, which listed 27 states; Education Week reports 31 states on track nationally. What makes the announcement notable is the arc behind it. Kotek was among the first Democratic governors last summer to say no, then reconsidered: in early March 2026 a spokesperson said she "has not determined" whether Oregon would participate and was awaiting Treasury's regulations before deciding. The June statement closes that reopened question with a no, and the reason she gave is the same federalism fight now shaping decisions in capitals across the country. The credit's mechanics are not in dispute: donors anywhere can give up to $1,700 to a qualifying SGO and claim a dollar-for-dollar federal income tax credit, with the SGO awarding K-12 scholarships and the program set to launch January 1, 2027. The fight is over how much a participating state can shape its own SGO list, and Treasury's guidance suggested the answer is "less than blue states had hoped." We track that dispute in our coverage of whether §25F is a [federal floor or a ceiling on state restrictions](https://eftccredit.com/news/federal-floor-or-ceiling-25f-state-restrictions-june-2026) and what [Treasury previewed about state authority](https://eftccredit.com/news/treasury-previews-25f-proposed-regulations-june-2026). Kotek's rationale is the inverse of the calculus that has driven Republican-led states in. Oklahoma, for example, deliberately barred its agencies from adding rules beyond federal law precisely so its program would track Treasury's national framework rather than layer on state guardrails. Kotek wanted the opposite: room to attach Oregon-specific conditions to participating SGOs, and on reading Treasury's release she concluded that room does not exist. The result places Oregon in the declining column alongside other Democratic-led states that have balked, a pattern we examine in our coverage of [how Democratic governors have split on §25F](https://eftccredit.com/news/democratic-governors-split-on-25f-2026). It stands in contrast to early movers across the aisle and beyond it, from [Virginia, the first state to opt in](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), to [New York under Gov. Hochul](https://eftccredit.com/news/new-york-governor-hochul-opts-in-may-2026). For donors, families, and prospective SGO founders, the practical takeaway is that Oregon is a non-participating state with no clear path to reverse course before the January 1, 2027 launch. There is no Oregon program to plan around: Oregon residents will see no in-state SGOs to give to, and Oregon families cannot receive §25F scholarships, even though the federal credit exists for taxpayers in states that elect in. Because the credit is statutorily capped at $1,700 per taxpayer regardless of how the state-conditions fight resolves, a point we lay out in our explainer on why the credit is [$1,700, not $3,400](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026), Oregon's exit changes nothing about the dollar figures and everything about access. Oregon's current status, and every other state's, is tracked on our [Oregon state page](https://eftccredit.com/states/oregon) and the [national participation map](https://eftccredit.com/states). Operators who still want the infrastructure ready in case Oregon ever reverses can review how the organizations work in our [explainers](https://eftccredit.com/learn) and the current landscape in the [SGO directory](https://eftccredit.com/sgos); the back-office work of intake, eligibility checks, and scholarship disbursement can be run on software built specifically for §25F. The forward question is whether the same Treasury guidance that pushed Kotek out becomes the wedge that other governors use to stay out. Her objection is not to school choice in the abstract but to losing control over the rules, and if Treasury's final regulations confirm a strong federal ceiling on state conditions, more Democratic governors may reach the same conclusion she did. The counter-pressure is the program's zero-cost design: a participating state spends nothing from its own treasury to open the door, which keeps the question alive even after a sitting governor says no. For now, whether Oregon ever files an advance election will be measured by one thing, and Kotek has answered it for this cycle with a no. Sources: - Education Week: Another Democratic-Leaning State Will Pass on the Federal School Choice Program (June 12, 2026): https://www.edweek.org/policy-politics/another-democratic-leaning-state-will-pass-on-the-federal-school-choice-program/2026/06 - IRS Newsroom: More than half the US states signed up to participate in the federal scholarship tax credit program (June 8, 2026): https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill - Teach Coalition National Tracker (Oregon listed as declining): https://teachcoalition.org/federalscholarships/ Canonical: https://eftccredit.com/news/oregon-kotek-declines-25f-treasury-state-rule-limits-june-2026 ### Massachusetts stays on the sidelines: Healey awaits Treasury rules as a business coalition and the teachers union clash over the §25F credit Date: 2026-06-12. Category: state-action. State: MA. Update, October 1, 2026: the Treasury rules Gov. Healey said she was waiting for came out October 1, as proposed regulations open for comment plus temporary regulations that set the state calendar. To take part in 2027, a state must file Form 15714 by January 1, 2027 and submit its SGO list by February 15, 2027, and it may not require SGOs to follow rules more restrictive than §25F's. The proposed rules also treat spouses filing jointly as separate taxpayers, so a couple can claim up to $3,400 when each spouse gives $1,700. [Our read of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026). Massachusetts is sitting out the federal Education Freedom Tax Credit (§25F) for now. The state is absent from the IRS roster of 27 states that have filed advance elections to participate, published as [IR-2026-76](https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill) on June 8, 2026. Gov. Maura Healey, a Democrat, has not committed either way: after Treasury previewed its regulatory framework the week of June 8, her administration said it is waiting on formal guidance from the U.S. Treasury and the Department of Education, expected by the end of September 2026, before deciding whether to opt in (Boston Globe; State House News, June 11, 2026). The posture leaves Massachusetts off the participation list even as a high-profile business coalition and the state's largest teachers union square off over the question, a fight the Boston Globe broke open in its June 12, 2026 newsletter. On one side is a coalition spearheaded by Boston investor Peter Lynch and his family foundation, joined by the Greater Boston Chamber of Commerce, the Worcester Regional Chamber of Commerce, the Massachusetts Business Roundtable, and The Boston Foundation, all pressing Healey to participate (Boston Globe, June 12, 2026). The push has Republican backing as well: State House News reported the same week that GOP lawmakers, the Pioneer Institute, former Lt. Gov. Tim Murray of the Worcester Regional Chamber, and Republican gubernatorial candidate Mike Minogue have all urged Massachusetts not to miss out. On the other side, Massachusetts Teachers Association president Max Page, co-signed by Vice President Deb McCarthy, sent Healey a letter (delivered around June 10 to 11) arguing the credit would drain resources from public schools and framing it as part of a Republican voucher movement. The mechanics behind the standoff are straightforward. Under §25F, a state opts in when its governor files an advance election with the IRS (Form 15714) and designates qualifying Scholarship Granting Organizations (SGOs). Donors anywhere in the country can then claim a dollar-for-dollar federal income tax credit of up to $1,700 per taxpayer for contributions to a qualifying SGO, which awards K-12 scholarships to families earning up to 300% of their area median gross income. The credit goes live January 1, 2027, and the program was created by the One Big Beautiful Bill Act. Critically, Treasury has only previewed its framework: the actual proposed regulations are not expected until the end of September 2026, which is precisely the guidance Healey says she is waiting on. We cover that timeline in our report on the [Treasury §25F preview](https://eftccredit.com/news/treasury-previews-25f-proposed-regulations-june-2026), and the statutory cap detail in our explainer on why the credit is [$1,700, not $3,400](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026). For donors, families, and prospective SGO founders, the practical takeaway is that Massachusetts remains a non-participating state. There is no Massachusetts program to plan around yet: its residents see no in-state SGOs to give to, and its families cannot receive the scholarships, even though the federal credit exists nationally. Massachusetts's current status, and every other state's, is tracked on our [Massachusetts state page](https://eftccredit.com/states/massachusetts) and the [national participation map](https://eftccredit.com/states). Operators weighing whether to stand up one of Massachusetts's first SGOs, so the infrastructure exists if and when the state elects in, can review how the organizations work in our [explainers](https://eftccredit.com/learn) and see the current landscape in the [SGO directory](https://eftccredit.com/sgos); the back-office work of donor intake, eligibility checks, and scholarship disbursement can be run on software built specifically for §25F. The forward question is whether the late-September guidance arrives in time to force Healey's hand before the January 1, 2027 launch. The longer Massachusetts goes without filing an advance election, the longer its donors hold credit-eligible dollars with no in-state place to send them and the more pressure builds from the business coalition lining up against the teachers union. Massachusetts is not alone in this hesitation: it joins a broader group of blue states where the decision turns on the same waiting game, a pattern we track in our coverage of how [Democratic governors have split on §25F](https://eftccredit.com/news/democratic-governors-split-on-25f-2026). Whether Healey's "wait for the rules" stance becomes a yes will be measured by one thing: whether Massachusetts ever files an advance election with the IRS. Sources: - IRS IR-2026-76: more than half the US states signed up to participate in the federal scholarship tax credit program (27-state roster, Massachusetts absent): https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill - Boston Globe: Business groups and Mass. teachers battle over a federal tax credit (June 12, 2026): https://www.bostonglobe.com/2026/06/12/newsletters/schools-tax-credit-power-play/ - State House News: Critics say Massachusetts missing out on chance to lift education (June 11, 2026): https://www.statehousenews.com/news/education/critics-say-massachusetts-missing-out-on-chance-to-lift-education/article_89e88e39-fda5-4b30-ab65-328d04c2f8ae.html - New Boston Post: Maura Healey faces pressure to opt Massachusetts into federal scholarship tax credit (June 11, 2026): https://www.newbostonpost.com/maura-healey-faces-pressure-to-opt-massachusetts-into-federal-school-scholarship-tax-credit/ Canonical: https://eftccredit.com/news/massachusetts-healey-awaits-treasury-rules-25f-pressure-june-2026 ### Treasury previews the §25F proposed regulations: September timeline, a 90% safe harbor, and a multistate path Date: 2026-06-10. Category: regulatory. The single most consequential open item in the federal Scholarship Tax Credit (FSTC / ECCA / §25F) program now has a date and a shape. On June 9, 2026, Deputy Assistant Secretary for Tax Policy Kevin Salinger told a roundtable of Scholarship Granting Organizations, state representatives, and education stakeholders that Treasury and the IRS expect to issue the §25F proposed regulations "no later than the end of September", and that states, SGOs, and taxpayers will be able to rely on those proposed regulations for tax year 2027. Treasury published the remarks and an accompanying press release on June 10, branding the program the "Education Freedom Tax Credit." Treasury Secretary Scott Bessent said the department is "committed to providing certainty to states, scholarship-granting organizations, taxpayers, and families alike." The preview resolves several questions SGO founders have been building around blind. On the statute's 90%-of-income spending requirement, Treasury expects the rules to measure the test against the organization's total receipts, unreduced by expenses, but with a safe harbor: an organization whose activities are largely scholarship-granting can instead measure "income of the organization" by the amount held in a §25F segregated account, including qualified contributions and earnings. For multistate SGOs, the safe harbor must be satisfied separately for each state-specific segregated account. Treasury also defined the long-ambiguous "located in" standard: an SGO is located in a state if it is authorized to do business there and complies with the state's generally applicable charitable-organization rules, and states may not impose SGO-specific requirements more restrictive than §25F's own. The multistate question, whether one SGO can serve families in several participating states, gets an explicit yes. An SGO may appear on more than one state's list as long as it is located in each state and maintains a separate §25F account per state, with most operational requirements applied per-account. On student eligibility, Treasury previewed a layered verification regime: direct income documentation (paystubs, tax returns, IRS transcripts, W-2s, or commercial data sources), categorical eligibility based on a household member's participation in a needs-based federal, state, or tribal program, and a safe harbor treating foster children as income-qualified with no separate verification. "School" will be defined consistent with section 530 to include public, private, and religious K-12 schools as determined under state law, including home schools where state law treats them as schools, and schools operated by federally recognized Tribes. Compliance architecture got equal billing. Every SGO would need an annual financial and programmatic audit by a qualified independent third party, furnished to each state on whose list it appears, though smaller SGOs could substitute an internal-committee audit signed under penalties of perjury. On the donor side, Treasury previewed a unique-donor-number system: the SGO issues each donor a written acknowledgment with a number generated under an IRS-provided method, reports contributions to the IRS under that number, and the donor reports it on their federal return, letting the IRS match claimed credits to real donors and real SGOs without donors ever giving an SGO their Social Security number. Treasury also said the proposed rules will contemplate an IRS portal for SGO administration and reporting, built out in phases. Two caveats temper the good news. First, the preview is "subject to ongoing legal review", Treasury intends the proposed regulations to be consistent with it, but nothing is law until the rule publishes. Second, some open items weren't addressed: the joint-filer treatment of the $1,700 cap, coordination with the Alternative Minimum Tax, and the state-list deadline mechanics for the 2027 startup year all remain to be settled. Guidance on the scope of eligible expenses under section 530, including tutoring and special-needs services, which Treasury says it "fully intend[s]" scholarships to support, will come as a separate workstream after the §25F regulations. For anyone forming an SGO now, the practical translation: set up a segregated §25F account from day one, plan for an annual audit, and expect the full rulebook before the back-to-school season ends. We've archived the full text of [the guidance preview](https://eftccredit.com/documents/treasury-25f-guidance-preview) and [the press release](https://eftccredit.com/documents/treasury-eftc-press-release-june-2026), and published [a practical walkthrough of every item in the preview](https://eftccredit.com/learn/25f-proposed-regulations-preview). Update, July 29, 2026: Treasury's entries in the 2026 Unified Agenda, published July 3, describe the vehicle this preview did not name. Both §25F entries under REG-117199-25 carry a timetable of [Interim Final Rule](https://eftccredit.com/news/treasury-unified-agenda-25f-interim-final-rule-sgo-lists-fall-2026), an instrument that binds on publication with comments taken afterward, paired with temporary regulations whose stated purpose is to let states submit their SGO lists in the fall of 2026 before final rules publish. Neither entry had reached OIRA for review as of July 29, so the end-of-September expectation above still stands as the public timeline. Update, September 11, 2026: both RINs reached OIRA on September 10, 2026, the last review step before publication, and they were filed at two different stages. [The temporary regulations went in as an interim final rule and the substantive regulations as a proposed rule.](https://eftccredit.com/news/25f-rules-reach-oira-interim-final-temporary-regs-september-2026) The proposed regulations this preview describes are therefore still coming as proposed regulations. The startup rules accompanying them are not. Update, October 1, 2026: the proposed regulations and companion temporary regulations were released October 1, 2026. They follow this preview's framework on the 90% test, the "located in" standard, and state restrictions, and they settle the joint-filer question this preview left open: a married couple filing jointly can claim up to $3,400 when each spouse gives $1,700. Two points below changed: program-based income verification is limited to SNAP, TANF, WIC, Section 8, and SSI (commercial data sources became "other relevant data sources" under direct verification), and the proposal does not repeat the home-school sentence, leaving the meaning of "school" to separate section 530 guidance that is still pending. [Our read of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026). Sources: - U.S. Treasury press release: Treasury Previews Education Freedom Tax Credit Guidance (June 10, 2026): https://home.treasury.gov/news/press-releases/sb0527 - Treasury: Preview of Forthcoming Section 25F Guidance, remarks by DAS Kevin Salinger (PDF): https://home.treasury.gov/system/files/136/Preview-of-Forthcoming-Guidance.pdf - Treasury / Dept. of Education: Education Freedom Tax Credit Fact Sheet (PDF): https://home.treasury.gov/wftc/fact-sheets/education-freedom-tax-credit-fact-sheet-113147.pdf Canonical: https://eftccredit.com/news/treasury-previews-25f-proposed-regulations-june-2026 ### Maine, the state the Supreme Court ordered to fund religious schools, is sitting out §25F Date: 2026-06-09. Category: analysis. State: ME. Update, October 1, 2026: Treasury's temporary regulations require a state's 2027 advance election on Form 15714 by January 1, 2027, which falls before Maine's next governor takes office. Maine donors can still claim the credit: the proposed regulations let a taxpayer give to an SGO on any participating state's list regardless of where the taxpayer lives, and they treat spouses filing jointly as separate taxpayers, so a couple can claim up to $3,400 when each spouse gives $1,700. [How giving across state lines works](https://eftccredit.com/news/give-to-any-of-30-states-25f-scholarships-follow-student-residence-october-2026). There is no state where sitting out the federal Education Freedom Tax Credit (§25F) is more striking than Maine. In 2022, the U.S. Supreme Court ruled in Carson v. Makin that Maine could not bar religious schools from its town-tuitioning program, the arrangement under which towns too small to run their own high school pay tuition to a public or approved private school the family chooses. Maine had limited that money to "nonsectarian" schools; the Court held, 6 to 3, that excluding schools because they are religious violates the Free Exercise Clause. The practical result is that Maine already sends public dollars directly to religious schools, a more direct flow than §25F's donor-credit mechanism ever contemplates. And yet, as the federal credit moves toward its January 1, 2027 launch, Maine is not in it. When the IRS published its [official roster of 27 participating states](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026) on June 8, 2026, Maine was absent. The list ran from Alabama to Wyoming and included every neighbor that had moved, but not Maine, which has filed no advance election and submitted no list of qualifying Scholarship Granting Organizations (SGOs). Nor is the gap a matter of paperwork lagging a decision: Gov. Janet Mills (D) has issued no statement on §25F in either direction, neither the opt-in that a governor makes by filing IRS Form 15714 nor a formal decline of the kind [Oregon's Gov. Kotek](https://eftccredit.com/news/oregon-kotek-declines-25f-treasury-state-rule-limits-june-2026) issued. Maine simply has not engaged. The legislative door for 2026 is now shut. The 132nd Maine Legislature adjourned its Second Regular Session sine die at the end of April 2026 without taking up a §25F enabling or SGO-certification bill, so absent a special session the state cannot act through statute until 2027. That timing matters because of who will be making the call. Mills is term-limited and cannot run in November 2026, which means the governor who would actually administer a Maine opt-in for the program's first live year, 2027, will be someone elected this fall. A sitting governor with nothing to gain politically and a successor not yet chosen is a recipe for exactly the silence Maine is producing. It would be a mistake to read Maine's absence as hostility to publicly funded private schooling, because Carson makes Maine an awkward fit for the usual blue-state objections. The argument other Democratic-led states have pressed, that they want room to write their own conditions onto participating SGOs, runs into a wall in a state the Supreme Court has already told it cannot single out religious schools for worse treatment. The unresolved federalism question of whether §25F is a [federal floor or a ceiling on state add-ons](https://eftccredit.com/news/federal-floor-or-ceiling-25f-state-restrictions-june-2026) is, in Maine, layered on top of a constitutional command that narrows what the state may do in the first place. Maine's posture looks less like the principled refusals of [Minnesota](https://eftccredit.com/news/minnesota-governor-walz-declines-fstc-march-2026) or the holdouts we track among [Democratic governors](https://eftccredit.com/news/democratic-governors-split-on-25f-2026) and more like a state that has chosen not to decide. For Maine donors, families, and anyone weighing whether to stand up an SGO in the state, the takeaway is plain: there is no §25F path in Maine before the 2027 launch unless Mills files an advance election on her way out or her successor moves quickly after taking office. The federal credit's mechanics are unaffected by Maine's choice: donors in participating states can give up to $1,700 to a qualified SGO and claim a dollar-for-dollar federal credit, the fixed figure we explain in [why the credit is $1,700, not $3,400](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026). Maine's status, and every other state's, is tracked on our [Maine state page](https://eftccredit.com/states/maine) and the [national participation map](https://eftccredit.com/states); operators who want the infrastructure ready in case Maine ever moves can start with our [explainers](https://eftccredit.com/learn) and the [SGO directory](https://eftccredit.com/sgos). Sources: - IRS IR-2026-76: More than half the U.S. states signed up to participate in the federal Scholarship Tax Credit program (June 8, 2026), Maine not listed: https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill - Carson v. Makin, 596 U.S. 767 (2022), Supreme Court opinion: https://www.supremecourt.gov/opinions/21pdf/20-1088_dbfi.pdf - Maine Legislature: 132nd Legislature, Second Regular Session (adjournment / session status): https://legislature.maine.gov/ - Maine Department of Education: Tuition / town tuitioning program: https://www.maine.gov/doe/schools/tuition - Cornell LII: 26 U.S.C. §25F: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/maine-sidelined-25f-carson-v-makin-legislature-adjourns-june-2026 ### 27 states are on the IRS's official §25F roster, and four states that said yes aren't on it yet Date: 2026-06-08. Category: regulatory. The IRS announced on June 8, 2026 (IR-2026-76) that more than half the states, 27 in total, have signed up to participate in the federal Scholarship Tax Credit (FSTC / ECCA / §25F) ahead of its January 1, 2027 launch. The official roster: 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. "It's encouraging to see that 27 states have already signed up to participate in this program," said IRS chief Frank Bisignano. The more interesting story is who isn't on the list. Kentucky and Kansas opted in by legislative veto override in March and April; North Carolina completed its override on June 3; and New York's Governor Kathy Hochul announced in May that the state plans to participate. None of the four appears on the IRS's June 8 roster. That's not a contradiction, it's the gap between a state deciding to participate and a state completing the formal advance election under Revenue Procedure 2026-6. The election is a specific filing (Form 15714, submitted by the governor or whoever state law designates to make federal tax elections for the state), and in override states the executive branch that just lost the veto fight is the one expected to process the paperwork the legislature mandated. The IRS says it will keep updating the list as states complete the election and submission process. This is why public trackers disagree with the IRS count: outlets counting enacted opt-ins put participation at roughly 30 states or more, while the IRS counts only completed elections. Both numbers are right; they measure different things. For donors and SGO founders, the IRS list is the one that ultimately matters, a donor's 2027 credit depends on contributing to an SGO that appears on a covered state's submitted SGO list, and a state becomes a covered state through the election, not the press conference. The practical read for anyone forming an SGO in one of the four gap states: the legal commitment is in place and the remaining step is administrative, but watch for your state to appear on the IRS's official participation page before relying on it, and note that in override states, follow-through has so far required sustained attention from legislators and advocates, not just the initial vote. For the 27 listed states, the next milestone is each state's submission of its qualified-SGO list, the final link that makes donations creditable when the program goes live January 1, 2027. Update, June 23, 2026: the IRS roster grew to 28 when North Carolina completed its advance election, weeks after its legislature overrode Gov. Josh Stein's veto. That leaves New York, Kansas, and Kentucky as the states that have committed by announcement or override but have not yet finished the formal IRS election. Update, July 7, 2026: [Kansas completed its advance election](https://eftccredit.com/news/kansas-completes-federal-25f-filing-irs-roster-29-july-2026), bringing the official roster to 29. Kentucky (veto override, filing pending) and New York (committed, not yet filed) are the two states still outstanding. Sources: - IRS newsroom: More than half the U.S. states signed up to participate in the federal scholarship tax credit program (IR-2026-76): https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill - Ballotpedia: State participation in the federal K-12 education tax credit program: https://ballotpedia.org/State_participation_in_the_federal_K-12_education_tax_credit_program - Defense of Freedom Institute: EFTC State Participation Status tracker: https://dfipolicy.org/education-freedom-tax-credit/ Canonical: https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026 ### D.C. sits out the §25F roster: a mayor's call, not a legislature's, and Bowser is on her way out Date: 2026-06-08. Category: state-action. State: DC. Update, October 1, 2026: D.C. taxpayers are not shut out: Treasury's proposed regulations let a taxpayer give to an SGO on any participating state's list regardless of where the taxpayer lives, though D.C. students generally can receive §25F scholarships only from SGOs on a D.C. list. The temporary regulations confirm that the Mayor makes the District's election and require the 2027 advance election on Form 15714 by January 1, 2027, before the next mayor takes office. [How giving across state lines works](https://eftccredit.com/news/give-to-any-of-30-states-25f-scholarships-follow-student-residence-october-2026). When the IRS published its first official roster of jurisdictions participating in the federal Scholarship Tax Credit (FSTC / §25F) on June 8, 2026, in news release IR-2026-76, the District of Columbia was not on it. The list named 27 participating jurisdictions, all of them states: 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. The §25F credit lets a taxpayer claim a one-for-one federal credit of up to $1,700 for donations to qualified Scholarship Granting Organizations, and it becomes available January 1, 2027. D.C.'s absence from the [27-jurisdiction roster](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026) means residents of the nation's capital will not have access to the credit when the program launches unless that changes. The mechanism here is what makes the District distinctive. Revenue Procedure 2026-6 explicitly names D.C. as eligible to participate, referring to the jurisdictions "including the District of Columbia, to make an Advance Election." The election is made on Form 15714, "Advance Election to Participate Under Section 25F for 2027." For the 50 states, that election is the governor's to make. The District has no governor, so under the IRS election procedures (now temp. reg. § 1.25F-5T(c)(2)) the authority falls to the Mayor in lieu of a governor, exercised as an executive Advance Election rather than through a separate statute. The District does have a legislature in the D.C. Council, but the participation decision does not run through it: per the IRS guidance and analysis of Rev. Proc. 2026-6 by Current Federal Tax Developments, this is the mayor's call. To date, Mayor Muriel Bowser has filed no advance election. Timing complicates the picture. Bowser announced on November 25, 2025, that she will not seek re-election, and the next D.C. mayoral election is set for November 3, 2026. That leaves the §25F decision in limbo: a lame-duck mayor who has shown no inclination to opt in, and a successor who will not take office until after the program has already launched. The dynamic resembles the lame-duck inheritance seen elsewhere, such as Virginia, where [Glenn Youngkin opted in before handing the program to his successor](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), except that in the District no election has been made at all. The contrast with the states that moved early, like [Florida](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026) and [Colorado](https://eftccredit.com/news/colorado-governor-polis-opts-in-december-2025), is stark: each had a sitting executive willing to sign on, and the District has neither acted nor signaled it intends to. For donors and prospective SGO founders, the practical consequence is straightforward. Without an advance election on file, no §25F credit flows to D.C. taxpayers and no qualified Scholarship Granting Organization can receive credit-eligible donations in the District for the 2027 launch. That does not mean the door is closed permanently, because a future mayor could file the election in a later cycle, but it does mean the capital starts behind the 27 states already on the roster. Operators eyeing the District should track whether any 2026 mayoral candidate adopts a §25F position, since the decision is now effectively a campaign question. How the credit works for families and the organizations that administer it is laid out in our [explainers](https://eftccredit.com/learn), and the current national landscape is detailed alongside every jurisdiction's status on the [District of Columbia page](https://eftccredit.com/states/district-of-columbia) and the [national participation map](https://eftccredit.com/states). The forward question is whether §25F becomes a live issue in the 2026 D.C. mayoral race. With Bowser stepping aside and the program launching just weeks after the new mayor is sworn in, the next executive will face an early, concrete choice: file the Form 15714 advance election and stand up an SGO framework, or leave the District out while neighboring states route credit-eligible donations to scholarships. SGO operators who do want to be ready can run a program on software built for §25F from day one, and founders can review how the organizations function in our [explainers](https://eftccredit.com/learn) and scan the existing [SGO directory](https://eftccredit.com/sgos). For now, the District remains the conspicuous blank on a map where more than half the states have already said yes. Sources: - IRS IR-2026-76: more than half the U.S. states signed up for the federal scholarship tax credit (27-jurisdiction roster, DC absent): https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill - IRS: Treasury, IRS allow states to make an advance election under §25F (names DC eligible, $1,700, Form 15714, Jan. 1 2027): https://www.irs.gov/newsroom/treasury-irs-allow-states-to-make-an-advance-election-to-participate-in-the-new-federal-tax-credit-for-individual-contributions-to-scholarship-granting-organizations-under-the-one-big-beautiful-bill - Current Federal Tax Developments: IRS guidelines for §25F advance elections (Rev. Proc. 2026-6; Mayor makes the DC election under 25F(g)(2)): https://www.currentfederaltaxdevelopments.com/blog/2025/12/12/irs-guidelines-for-section-25f-advance-elections-revenue-procedure-2026-6 - Bloomberg: Washington D.C. Mayor Muriel Bowser won't seek re-election in 2026 (Nov. 25, 2025): https://www.bloomberg.com/news/articles/2025-11-25/washington-dc-mayor-muriel-bowser-won-t-seek-re-election-in-2026 - The Hill: DC Mayor Bowser won't seek re-election in 2026: https://thehill.com/homenews/campaign/5622245-dc-mayor-bowser-not-running/ Canonical: https://eftccredit.com/news/district-of-columbia-absent-from-25f-roster-bowser-mayors-call-june-2026 ### Wyoming Joins the Federal §25F Scholarship Tax Credit, Moving Gov. Gordon From 2025 'Review' to Participation Date: 2026-06-08. Category: state-action. State: WY. Update, October 1, 2026: Treasury's proposed regulations answer the married-couple question the other way: spouses filing jointly are treated as separate taxpayers, so a married couple can claim up to $3,400 when each spouse gives $1,700, and taxpayers may rely on that rule for 2027 contributions. The $1,700 cap still applies to each person. [How the joint-return rule works](https://eftccredit.com/news/married-couples-3400-25f-credit-joint-return-proposed-rule-october-2026). Wyoming has joined the federal Education Freedom Tax Credit (§25F). On June 8, 2026, the IRS released IR-2026-76, which lists Wyoming among 27 states participating in the federal Scholarship Tax Credit program enacted under the One Big Beautiful Bill. Per that release, taxpayers may claim a federal tax credit of up to $1,700 for contributions to Scholarship Granting Organizations (SGOs). Wyoming had already been counted among the advance-notice states by April 15, 2026, when K-12 Dive reported that 27 states had signaled participation and named Wyoming explicitly. The state's appearance on the official roster confirms that Wyoming submitted its advance election to the IRS, putting it inside the group of states whose residents will have an in-state §25F program when the credit goes live January 1, 2027. The outcome closes a notable gap. In August 2025, Gov. Mark Gordon, a Republican, was publicly noncommittal: in Wyoming Public Media reporting dated August 12, 2025, his spokesperson Michael Pearlman said the office was "currently reviewing the school choice provision" and that the governor wanted a "plan that best fits Wyoming." That posture was a review, not a refusal, and the move from review to participation tracks the broader trajectory of red and purple states this year. Wyoming was not among the earliest filers profiled when the first wave of states elected in around January 2026 (it first surfaces on the public count in mid-April), so its arrival on the June roster represents the deliberate, later end of that process rather than a day-one commitment like the ones we covered in [Florida](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026) or [Virginia](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026). The mechanics are the same in every participating state. A state opts in when its governor files an advance election with the IRS and designates qualifying SGOs. Donors anywhere in the country can then claim a dollar-for-dollar federal income tax credit of up to $1,700 per taxpayer for contributions to a qualifying SGO, which awards K-12 scholarships to families earning up to 300% of their area median gross income. The cap is $1,700 per taxpayer, a point worth underlining because of recurring confusion over whether married couples get double; for the statutory detail, see our explainer on why the credit is [$1,700, not $3,400](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026). The credit takes effect January 1, 2027, and a state that files an election gives its residents both an in-state place to give and an in-state pathway for families to receive scholarships. For donors, families, and prospective SGO founders in Wyoming, the practical takeaway is that the state is now in. Wyoming taxpayers will be able to route §25F-eligible donations to in-state SGOs once the program is operational, and Wyoming families will be eligible to receive the scholarships those organizations fund. Because Wyoming is a comparatively small market with a still-thin school-choice infrastructure, the first organizations to stand up scholarship programs will define how the credit reaches families across the state. Operators weighing whether to launch one of Wyoming's first SGOs can review how the organizations work in our [explainers](https://eftccredit.com/learn) and see the current national landscape in the [SGO directory](https://eftccredit.com/sgos); the back-office work of donor intake, eligibility checks, and scholarship disbursement can be run on software built specifically for §25F. Wyoming's status, and every other state's, is tracked on our [Wyoming state page](https://eftccredit.com/states/wyoming) and the [national participation map](https://eftccredit.com/states). The forward question is how quickly Wyoming designates and stands up qualifying SGOs before the January 1, 2027 launch, since an election on the federal roster is only the first step. The IRS's 27-state count, detailed in our coverage of the [official June 2026 participation list](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026), marks the program crossing the halfway point of states, and Wyoming's late but firm entry suggests the "wait and see" camp is thinning. With the credit now confirmed for Wyoming, the measure of success shifts from whether the state opts in to how many in-state organizations are ready to receive donations on day one. Sources: - IRS IR-2026-76: More than half the US states signed up to participate in the federal Scholarship Tax Credit program (Wyoming listed among 27 states), June 8, 2026: https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill - Wyoming Public Media: Gordon weighs joining federal school choice program (Aug 12, 2025): https://www.wyomingpublicmedia.org/education/2025-08-12/gordon-weighs-joining-federal-school-voucher-program - K-12 Dive: 27 states opting into federal school choice program, Wyoming among advance-notice states (Apr 22, 2026): https://www.k12dive.com/news/27-states-opting-into-federal-school-choice-program-IRS-Congress/818087/ - Ballotpedia: Mark Gordon (Wyoming) profile: https://ballotpedia.org/Mark_Gordon_(Wyoming) Canonical: https://eftccredit.com/news/wyoming-gordon-opts-in-25f-from-review-to-participation-june-2026 ### After the override, NC's Stein pivots: a Democratic governor's plan to steer §25F donations to public-school students Date: 2026-06-05. Category: state-action. State: NC. When the North Carolina Senate completed its override of Governor Josh Stein's veto on June 3, 2026, the state joined the federal Scholarship Tax Credit (FSTC / ECCA / §25F) over its governor's objection, the third state to arrive by the [veto-override route](https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026) after Kentucky and Kansas. What happened next is the more instructive story. Rather than treating the loss as the end of the fight, Stein pivoted the same day from opponent to reluctant participant, and pointed to a path most coverage of §25F has overlooked: using the credit to benefit public-school students. "I see potential opportunities for public school students to benefit from this program," Stein said, adding that his administration is "working on a solution to make it easy for North Carolinians like me who want to direct their federally reimbursed donations to scholarship-granting organizations that directly benefit public school students." It is a notable reframing from a governor who had argued the credit would drain public education. The substance behind it is real: §25F scholarships are tied to the Section 530 list of qualified education expenses, which reaches well beyond private tuition to tutoring, special-needs services, technology, and other support that public-school families use, so an SGO can be built to serve students who never leave their district school. Stein's move did not go unnoticed nationally. By late June, coverage was grouping him with New York's Kathy Hochul as Democratic governors choosing to work within the program rather than refuse it outright, even as the teachers' unions escalated their campaign urging Democratic governors to [reject it entirely](https://eftccredit.com/news/who-opposes-25f-unions-democrats-repeal-bill-2026). That tension, a forced opt-in that a Democratic governor then tries to shape constructively, is precisely the split we have tracked among [Democratic governors on §25F](https://eftccredit.com/news/democratic-governors-split-on-25f-2026), and North Carolina now sits at its leading edge. For donors, families, and prospective Scholarship Granting Organization founders, Stein's stance is a signal worth reading carefully. It validates a model that opponents and supporters alike often miss: a public-school-serving SGO, organized to channel §25F-credited donations into the Section 530 expenses of public-school students, is permitted by the statute and now has a sitting governor actively encouraging it. For operators, that is an opening, not a threat, and one that could blunt the "vouchers only help private schools" objection in exactly the divided states where it is loudest. The mechanics do not change: donors in a participating state can give up to $1,700 to a qualified SGO and claim a dollar-for-dollar federal credit when the program launches January 1, 2027. North Carolina's status, and every other state's, is tracked on our [North Carolina state page](https://eftccredit.com/states/north-carolina) and the [national participation map](https://eftccredit.com/states); founders weighing where and how to organize can start with our [explainers](https://eftccredit.com/learn) and the [national SGO directory](https://eftccredit.com/sgos). Sources: - EdNC: NC enrolled in federal school choice tax credit following veto override (June 5, 2026): https://www.ednc.org/6-5-2026-nc-enrolled-in-federal-school-choice-tax-credit-following-veto-override-and-other-legislative-news/ - Ballotpedia News: North Carolina General Assembly overrides governor's veto of §25F opt-in bill (June 12, 2026): https://news.ballotpedia.org/2026/06/12/north-carolina-general-assembly-overrides-governors-veto-of-bill-opting-state-into-federal-education-tax-credit-scholarship-program/ - The Washington Times: Teachers unions attack Democratic governors who embrace Trump's school tax credit (June 24, 2026): https://www.washingtontimes.com/news/2026/jun/24/teachers-unions-attack-democratic-governors-embrace-trumps-school/ Canonical: https://eftccredit.com/news/north-carolina-stein-public-school-sgo-pivot-25f-june-2026 ### Still pending: what Treasury's §25F proposed regulations need to resolve before 2027 Date: 2026-06-04. Category: regulatory. Update, October 1, 2026: the regulations released October 1 answer most of the questions above. Under the proposed rules, which taxpayers may rely on for 2027, spouses filing jointly are separate taxpayers (up to $3,400 when each gives $1,700), the credit is allowed against the alternative minimum tax, SGOs verify household income by one of four set methods, and the 90% test runs on an SGO's total gross receipts or, if at least 85% of its activities are scholarship granting, on its §25F account (one per state for a multistate SGO). The temporary regulations define "located in" a state as being authorized to do business there and complying with its charity laws, and set the 2027 deadlines: January 1, 2027 for a state's Form 15714 election and February 15, 2027 for its SGO list. [Our read of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026). Update, June 10, 2026: Treasury has now previewed the proposed regulations and committed to issuing them by the end of September. Several of the open questions below, the 90% "income" definition, the multistate question, and the "located in" standard, have preliminary answers. See our coverage: [Treasury previews the §25F proposed regulations](https://eftccredit.com/news/treasury-previews-25f-proposed-regulations-june-2026). The federal Scholarship Tax Credit (FSTC / ECCA / §25F) is moving on two tracks that haven't fully met. On one track, states are signing up: Treasury and the IRS released Revenue Procedure 2026-6 and Form 15714 on December 12, 2025, giving states the exclusive process to make an "advance election" to become a covered state for 2027. On the other track, the substantive rules that will govern how donors and Scholarship Granting Organizations actually operate are still in progress. The IRS issued Notice 2025-70 on November 25, 2025 requesting public comment, the comment window closed December 26, 2025, and Treasury has said it intends to issue proposed regulations, but as of June 2026 those proposed regulations have not been published. Several of the open questions directly affect how SGOs must run. The statute requires an SGO to spend at least 90% of its "income" on scholarships, but "income" is not defined, whether it includes investment returns, prior-year carryover, or only current-year contributions is left to guidance. For SGOs operating in more than one state, it is not yet settled whether the 90% test is applied per-state or in the aggregate, nor exactly what it means for scholarship recipients or an SGO to be "located in" a state. These are not academic points: they shape an SGO's chart of accounts and compliance reporting from day one. Other open items affect donors and families. Treasury has not issued final guidance confirming the joint-filer treatment of the $1,700 cap (the prevailing reading is a single $1,700 per return, not $3,400 for a couple, but it isn't formally settled). Donor substantiation and recordkeeping mechanics, coordination with the Alternative Minimum Tax, and the precise method SGOs must use to verify a household's income against the 300%-of-Area-Median-Gross-Income ceiling, measured on the prior calendar year, all await the proposed regulations. For the 2027 startup year, §25F also tells states to submit their qualifying-SGO list "as early as practicable" rather than by a fixed January 1 date, and the deadline mechanics will be set in future guidance. The practical posture for anyone acting now, a state weighing its election, an organization standing up as an SGO, or a donor planning 2027 contributions, is to build to the statute and the existing notices while treating the open questions conservatively, and to watch for the proposed regulations as the single most consequential development still ahead before the January 1, 2027 launch. When the proposed rule publishes in the Federal Register, it will open another comment period and is likely to resolve most of the items above at once. Sources: - IRS Notice 2025-70 (PDF): https://www.irs.gov/pub/irs-drop/n-25-70.pdf - IRS Revenue Procedure 2026-6 (PDF): https://www.irs.gov/pub/irs-drop/rp-26-06.pdf - IRS newsroom: Treasury, IRS allow States to make an Advance Election under §25F: https://www.irs.gov/newsroom/treasury-irs-allow-states-to-make-an-advance-election-to-participate-in-the-new-federal-tax-credit-for-individual-contributions-to-scholarship-granting-organizations-under-the-one-big-beautiful-bill - Current Federal Tax Developments: A Technical Analysis of §25F Guidance: https://www.currentfederaltaxdevelopments.com/blog/2025/11/25/a-technical-analysis-of-25f-guidance-the-obbba-scholarship-tax-credit Canonical: https://eftccredit.com/news/what-25f-proposed-regulations-must-resolve-2026 ### Not a party-line story: where Democratic governors landed on §25F Date: 2026-06-04. Category: analysis. State: NY. Coverage of the federal Scholarship Tax Credit (FSTC / ECCA / §25F) often reads as a red-state story, and the participation map skews that way. But the more revealing detail in 2026 is how differently Democratic governors have treated the program, because the credit is voluntarily donor-funded rather than a state appropriation, which scrambles the usual school-choice battle lines. Two Democratic governors have leaned in. Colorado's Jared Polis was among the earliest to commit, opting in on December 5, 2025 and calling the federal credit a "no-brainer" he would "be crazy not to" take for Colorado families. New York's Kathy Hochul went further than most blue-state governors when she signaled in her FY2027 budget materials in May 2026 that she intends to opt New York in, though she conditioned final participation on reviewing the forthcoming IRS guidance, so New York is best described as committed rather than certified. Other Democratic governors have drawn the opposite conclusion. Minnesota's Tim Walz said opting in was "never going to happen," pairing his opposition with a budget proposal that would have ended longstanding state nonpublic-pupil aid if the state participated. Oregon's Tina Kotek declined in 2025, and New Mexico's Michelle Lujan Grisham declined in January 2026. Hawaii's Josh Green declined to make the state's 2027 advance election, prompting [four legislative resolutions urging him to reconsider](https://eftccredit.com/news/hawaii-legislature-urges-green-reconsider-25f-march-2026), and [Maine's Janet Mills has stayed silent](https://eftccredit.com/news/maine-sidelined-25f-carson-v-makin-legislature-adjourns-june-2026) even though the Supreme Court has already required Maine to fund religious schools through its tuition program. The dividing line among these governors is less about party than about how each weighs the trade-off the program presents: federal scholarship dollars for resident families on one side, and concerns about the effect on public-school funding and federal revenue on the other. For donors and SGOs, the lesson is to read each state on its own facts rather than by the governor's party. A donor's ability to support an SGO in a given state, and a family's eligibility for scholarships, depends on whether that specific state has opted in, by whichever route, ahead of the January 1, 2027 launch. As of June 2026, roughly 30 states are participating or have signaled intent, and the blue-state column is not empty. A newer wrinkle is the governor who opposed the credit, lost, and then chose to work within it: North Carolina's Josh Stein, after his veto was overridden, [moved to steer §25F donations toward public-school students](https://eftccredit.com/news/north-carolina-stein-public-school-sgo-pivot-25f-june-2026). Sources: - Ballotpedia News: New York governor says state plans to participate in federal education tax credit scholarship program: https://news.ballotpedia.org/2026/05/19/new-york-governor-says-state-plans-to-participate-in-federal-education-tax-credit-scholarship-program/ - Ballotpedia: State participation in the federal K-12 education tax credit program: https://ballotpedia.org/State_participation_in_the_federal_K-12_education_tax_credit_program - Defense of Freedom Institute: EFTC State Participation Status tracker: https://dfipolicy.org/education-freedom-tax-credit/ Canonical: https://eftccredit.com/news/democratic-governors-split-on-25f-2026 ### Three governors vetoed, three legislatures overrode: the veto path into §25F Date: 2026-06-04. Category: analysis. Update, October 1, 2026: under Treasury's temporary regulations, an opt-in statute still has to be carried out through the federal election, made by the governor or by whoever state law designates, for each calendar year. For 2027 that means an advance election on Form 15714 by January 1, 2027, completed with the state's SGO list by February 15, 2027. Kentucky, Kansas, and North Carolina have all since filed their 2027 advance elections. [The 2027 calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). When North Carolina's Senate completed its override of Governor Josh Stein's veto on June 3, 2026, it did more than add one state to the federal Scholarship Tax Credit (FSTC / ECCA / §25F) roster. It confirmed a pattern: in three states now, a Republican-controlled legislature has forced participation in the program over a Democratic governor's objection. [Kentucky was first, overriding Governor Andy Beshear's veto of House Bill 1](https://eftccredit.com/news/kentucky-sgo-registry-secretary-of-state-adams-hb1-march-2026) on March 17, 2026. Kansas followed, overriding Governor Laura Kelly's veto of Senate Bill 361 in the April 2026 veto session, the House voting 85-38 and the Senate 29-10. North Carolina's override of HB 87 makes three. The override path matters because of how §25F is structured. Most participating states have joined through a gubernatorial "advance election", the governor files Form 15714 with the IRS to make the state a covered state for 2027. But §25F does not require the decision to come from the governor's office; a state can also opt in through legislation. When a governor vetoes that legislation and the legislature overrides the veto, the state participates with no further action required from the governor. In all three override states, the bill is now law and the SGO designation process proceeds regardless of the governor's stated preference. The three vetoes shared a common rationale. Beshear, Kelly, and Stein each argued the credit would divert resources from public education and each preferred to wait for the U.S. Treasury Department to finalize the program's rules before committing. Supporters in each state countered that §25F is voluntarily donor-funded rather than a direct appropriation, and that scholarships reach students across public, charter, private, and home-school settings. In each case the legislature had the supermajority needed to override. For families and prospective Scholarship Granting Organizations, the practical takeaway is that a sitting governor's opposition is not the last word in a state with a determined legislative majority. Kentucky, Kansas, and North Carolina families will all be eligible for scholarships when the program launches January 1, 2027, on the same terms as families in states whose governors opted in voluntarily: K-12 students in households at or below 300% of the relevant Area Median Gross Income, funded by donors who can claim a non-refundable federal credit of up to $1,700 per taxpayer. It also signals to advocates in other divided-government states that the override route is viable where the votes exist. And losing the veto is not the end of a governor's influence: in North Carolina, Stein [pivoted after the override](https://eftccredit.com/news/north-carolina-stein-public-school-sgo-pivot-25f-june-2026) to steer the credit toward public-school students rather than fight it further. Sources: - Ballotpedia: State participation in the federal K-12 education tax credit program: https://ballotpedia.org/State_participation_in_the_federal_K-12_education_tax_credit_program - Defense of Freedom Institute: EFTC State Participation Status tracker: https://dfipolicy.org/education-freedom-tax-credit/ - Carolina Journal: Senate completes veto override, opts NC into federal school-choice tax credit: https://www.carolinajournal.com/senate-completes-veto-override-opts-nc-into-federal-school-choice-tax-credit/ Canonical: https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026 ### North Carolina Senate completes veto override, NC opts into the federal Scholarship Tax Credit Date: 2026-06-03. Category: state-action. State: NC. On June 3, 2026, the [North Carolina](https://eftccredit.com/states/north-carolina) Senate voted 30-19 to override Governor Josh Stein's veto of House Bill 87, completing a two-chamber override that began when the House voted 73-46 on May 20. The Senate vote fell strictly along party lines, with all Republicans in favor and all Democrats opposed. With the override complete, HB 87 becomes law over the governor's objection and North Carolina is now opted into the federal Scholarship Tax Credit (FSTC), the program known to Congress as the Educational Choice for Children Act (ECCA) and codified at IRC §25F. Because the program was enacted by legislative override rather than gubernatorial election, North Carolina's participation does not depend on any further action by Governor Stein. The state will designate qualifying [Scholarship Granting Organizations (SGOs)](https://eftccredit.com/learn/sgo-guide), and North Carolina families become eligible for scholarships when the federal program goes live on January 1, 2027. Under §25F, scholarships go to K-12 students in households at or below 300% of the relevant Area Median Gross Income, and donors anywhere in the country can claim a non-refundable federal income tax credit of up to $1,700 per taxpayer for cash contributions to a qualifying SGO. North Carolina becomes the third state to join the program through a veto override, following Kentucky (House Bill 1, override completed March 17, 2026) and Kansas (Senate Bill 361, overridden in the April 2026 veto session). In each case a Republican-controlled legislature forced participation against a Democratic governor's veto. Senate Republicans noted the vote was the latest in a long run of successful overrides of Governor Stein this session. Stein had vetoed HB 87 citing concerns that the federal credit would reduce tax revenue available for public education and a preference to wait for final U.S. Treasury rules before committing. Supporters countered that the program is voluntarily donor-funded and reaches students across public, charter, private, and home-school settings. The override adds North Carolina to a roster of roughly 30 participating states ahead of the 2027 launch, even as Treasury's proposed regulations implementing §25F remain pending. Sources: - WRAL: NC lawmakers enact education tax-break bill, override Stein veto (June 3): https://www.wral.com/news/nccapitol/north-carolina-trump-education-tax-break-policy-veto-override-june-3/ - NC Newsline: Senate overrides Stein veto to enact scholarship tax credit bill: https://ncnewsline.com/briefs/north-carolina-senate-overrides-ninth-stein-veto-to-enact-scholarship-tax-credit-bill/ - Carolina Journal: Senate completes veto override, opts NC into federal school-choice tax credit: https://www.carolinajournal.com/senate-completes-veto-override-opts-nc-into-federal-school-choice-tax-credit/ Canonical: https://eftccredit.com/news/north-carolina-senate-completes-stein-veto-override-june-2026 ### Illinois ends its spring session without acting on §25F, leaving every opt-in bill dead in committee and the decision to Pritzker Date: 2026-06-01. Category: state-action. State: IL. Update, October 1, 2026: Treasury's temporary regulations make Form 15714 the only route into 2027 for a state that has not yet elected. The governor, or whoever state law designates, must file the advance election by January 1, 2027 and complete it by submitting the state's SGO list by February 15, 2027; a state in its first year cannot elect just by sending a list. [The 2027 calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). The Illinois General Assembly adjourned its 2026 spring session in the early hours of June 1, 2026, running past its scheduled May 31 deadline, without taking any action on the federal Scholarship Tax Credit (FSTC / ECCA / §25F), the donor-funded K-12 scholarship credit that launches January 1, 2027 with a per-donor credit cap of $1,700. Three separate bills had been introduced to opt the state in, and not one of them received a committee vote or a floor vote before lawmakers went home. The legislature did not affirmatively vote the program down. It simply let all three measures die in committee without a hearing on their merits, which leaves Illinois in a distinct posture among the states still weighing participation. The two Senate measures never left the chamber's gatekeeping committee. SB3776, filed by Sen. Adriane Johnson (D-Buffalo Grove) on February 5, 2026 under the "Educational Choice for Children Act" banner and written to require compliance with the federal credit for tax years after December 31, 2026, was referred to the Senate Assignments Committee and stayed there through adjournment; co-sponsors were still being added as late as the May 19 to 20 window, but the bill never moved. SB3850, filed by Sen. John F. Curran (R-Downers Grove) on February 6 and drafted to direct the Governor to submit a list of Scholarship Granting Organizations to the U.S. Treasury, met the same fate in Senate Assignments. On the House side, HB4099 from Rep. Tony McCombie (R), which referenced the federal One Big Beautiful Bill Act and Section 25F, was first read and referred to the House Rules Committee on October 15, 2025 and never advanced from there. With no enabling legislation enacted, the practical question of whether Illinois participates in 2027 now rests with Gov. JB Pritzker rather than the legislature. §25F is structured so that a state's participation flows from the governor submitting a list of approved Scholarship Granting Organizations to Treasury; in the absence of a statute compelling or barring that step, a governor can elect into the program administratively. Treasury's published mechanism for a state to signal participation ahead of the launch year is an executive Advance Election (IRS Form 15714), so a Pritzker-led opt-in for 2027 would most plausibly run through that route. That framing is our reading of how the federal structure interacts with Illinois's now-stalled legislative track, not a step the Governor has announced; as of adjournment he had not committed either way, and Illinois remains listed as undecided on our [Illinois state page](https://eftccredit.com/states/illinois) and the [participation map](https://eftccredit.com/states). The June 1 outcome moves Illinois past the op-ed and advocacy phase we covered when [the public debate intensified in May](https://eftccredit.com/news/illinois-public-debate-intensifies-pritzker-may-2026) and into a concrete legislative result: a Democratic-trifecta state where lawmakers declined to take up the question at all, deferring entirely to the executive. That distinguishes Illinois both from the divided states that have used a [veto-override path into §25F](https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026) and from the states where a governor has moved first. It also leaves the door open in either direction, since nothing the legislature did forecloses a future administrative election or a fresh bill in a later session. Prospective donors, families, and Scholarship Granting Organization founders watching Illinois can track the mechanics of the program on our [learn pages](https://eftccredit.com/learn) and find participating-state organizations in the [SGO directory](https://eftccredit.com/sgos); for now, the Illinois decision belongs to the Governor's office, which has said it is still reviewing the program as it awaits the federal regulations expected later in 2026. Sources: - Illinois General Assembly: Bill Status of SB3776 (Sen. Adriane Johnson; action history showing referral to Senate Assignments Committee): https://my.ilga.gov/Legislation/BillStatus?DocNum=3776&GAID=18&DocTypeID=SB&LegId=167091&SessionID=114 - Illinois General Assembly: Bill Status of SB3850 (Sen. John F. Curran; remained in Senate Assignments Committee): https://my.ilga.gov/Legislation/BillStatus?DocNum=3850&GAID=18&DocTypeID=SB&SessionID=114 - Illinois General Assembly: Bill Status of HB4099 (Rep. Tony McCombie; referred to House Rules Committee Oct. 15, 2025): https://ilga.gov/Legislation/BillStatus?DocNum=4099&GAID=18&DocTypeID=HB&LegId=164052&SessionID=114 - STLPR: Breaking down the $56B Illinois budget and other bills from the 2026 spring legislative session (June 2, 2026): https://www.stlpr.org/government-politics-issues/2026-06-02/breaking-down-illinois-budget-other-bills-2026-spring-legislative-session Canonical: https://eftccredit.com/news/illinois-spring-session-adjourns-25f-bills-die-committee-june-2026 ### $1,700, not $3,400: what the §25F statute already settles about the credit Date: 2026-05-29. Category: regulatory. Update, October 1, 2026: Treasury has since answered the joint-filer question the other way. Its proposed regulations treat spouses filing jointly as separate taxpayers for the $1,700 cap, so a married couple can claim up to $3,400 when each spouse gives $1,700, and taxpayers may rely on that rule for 2027 contributions. The rules also apply a state credit before the $1,700 cap, so a single gift can earn both a state and a federal credit as long as the combined benefit does not exceed the gift. The point below about the charitable deduction still holds. [Our read of the full rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026). With more than 30 states moving to participate in the federal Scholarship Tax Credit (FSTC / ECCA / §25F) and the program's January 1, 2027 launch approaching, a few donor-level details are drawing scrutiny, and one common assumption appears to be wrong. The §25F statute (and the early reading from tax practitioners) already settles more than the "await guidance" framing suggests. The cap is $1,700 per return, not $3,400 for a couple. §25F(b)(1) limits the credit "to any taxpayer for any taxable year" to $1,700, and the statute contains no provision doubling that amount for a joint return (there is no "200 percent" or "twice" language of the sort Congress uses elsewhere when it wants to double a married-filing-jointly figure). The prevailing expert reading, reflected, for example, in Brownstein's April 2026 §25F Q&A, is that a married couple filing jointly receives a single $1,700 credit, not $3,400. Two single filers each have their own $1,700 cap on their own returns. Treasury has not issued final guidance on joint-filer treatment, so donors should plan conservatively at $1,700 per return until it does. You can't double-dip, and you can't stack the federal credit on a state credit for the same dollars. Two statutory rules govern this. Under §25F(e), a contribution for which the §25F credit is claimed cannot also be taken as a charitable deduction under §170, no credit-plus-deduction on the same gift. And under §25F(b)(2), the federal credit is reduced by the amount of any state tax credit the donor claims for the same qualified contributions. That means donors in states with their own scholarship tax-credit programs cannot claim both the federal and the state credit on a single donation; making separate donations to separate organizations is the way to access both benefits. What's still genuinely open is narrower than it's sometimes portrayed. The biggest unresolved questions for the forthcoming Treasury proposed regulations involve the [Scholarship Granting Organization (SGO)](https://eftccredit.com/learn/sgo-guide) [90% spending test](https://eftccredit.com/learn/sgo-90-10-rule-compliance), the statute requires an SGO to spend at least 90% of its income on scholarships, but "income" is not defined and is expected to be addressed in guidance, along with donor substantiation and recordkeeping mechanics and coordination with the Alternative Minimum Tax. Treasury and the IRS received more than 2,200 comments in response to Notice 2025-70 (the comment window closed December 26, 2025) and are expected to issue proposed regulations during 2026 ahead of the launch. The practical takeaway for donors: budget around a $1,700-per-return federal credit, don't assume $3,400 for joint filers, and treat the federal credit and any state scholarship credit as applying to separate donations rather than the same dollars. Sources: - Cornell LII: 26 U.S.C. §25F (see subsections (b) and (e)): https://www.law.cornell.edu/uscode/text/26/25F - Brownstein: Federal Scholarship Tax Credit, Q&A Guide: https://www.bhfs.com/insight/federal-scholarship-tax-credit-qa-guide/ - Current Federal Tax Developments: A Technical Analysis of §25F Guidance: https://www.currentfederaltaxdevelopments.com/blog/2025/11/25/a-technical-analysis-of-25f-guidance-the-obbba-scholarship-tax-credit - IRS Notice 2025-70 (PDF): https://www.irs.gov/pub/irs-drop/n-25-70.pdf - Afterschool Alliance: Treasury and IRS reviewing public comments on the Federal Tax Credit Scholarship: https://www.afterschoolalliance.org/afterschoolsnack/Treasury-and-IRS-reviewing-public-comments-on-the-Federal-Tax_01-16-2026.cfm Canonical: https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026 ### Illinois Senate Republicans press for a §25F opt-in in the session's final week: 'We will be left out and left behind' Date: 2026-05-22. Category: state-action. State: IL. Update, October 1, 2026: Treasury's proposed regulations, which taxpayers may rely on for 2027, let a donor give to an SGO on any participating state's list regardless of where the donor lives, so Illinois residents can claim the credit of up to $1,700 per taxpayer even if Illinois stays out. What the state's decision controls is whether Illinois students can receive §25F scholarships, since a scholarship follows the state where the student lives. [How giving across state lines works](https://eftccredit.com/news/give-to-any-of-30-states-25f-scholarships-follow-student-residence-october-2026). With the 2026 spring session winding down, Illinois Senate Republicans made a public push to advance two bipartisan bills that would opt the state into the federal Scholarship Tax Credit (FSTC / ECCA / §25F), the new program that lets donors claim a credit of up to $1,700 for gifts to scholarship granting organizations and that launches January 1, 2027. The vehicles are SB3776, whose chief sponsor is Democratic Sen. Adriane Johnson, and SB3850, sponsored by Senate Republican Leader John Curran of Downers Grove. Both were referred to the Senate Assignments Committee in February and, as of the GOP push in the week of May 18, both remained parked there without having been called for a hearing. The federal credit requires a state to affirmatively opt in before its residents can participate, which is why the calendar, and the committee, matter so much. The Republican strategy in the final week was to build visible momentum through co-sponsors. Senate records show Curran signed on as a co-sponsor of Johnson's SB3776 on May 18, 2026, and Sen. Li Arellano Jr. was added the following day, part of a flurry of GOP names attached to both measures between May 18 and May 20. The cross-party signal cut both ways: on the Democratic side, only Johnson and Sen. David Koehler (added as a co-sponsor of SB3776 on March 3) had publicly backed the opt-in, leaving the bipartisan bill short of the broad majority-caucus support it would need to move. Curran framed the stakes as competitive and time-sensitive, telling colleagues that "time is of the essence" ahead of the January 1, 2027 deadline. Donors, he warned, "are going to go to other states if Illinois does not opt in. We will be left out and left behind." Republicans also made an economic case. Sen. Jil Tracy of Quincy called the credit a "no-brainer," arguing it could unlock roughly $1 billion in donor-funded scholarships for Illinois students at no direct cost to the state treasury, since the dollars come from private contributions rather than appropriations. Sen. Dave Syverson of Cherry Valley joined the chorus pressing leadership to call the bills. The pitch leaned on the structure of the program: because §25F scholarships are funded by donors who receive the federal credit, supporters argue a state can extend a new education benefit to families simply by adding its scholarship organizations to the federal list, without cutting a check from its own budget. That framing is exactly what makes the opt-in decision politically charged in a state where the teachers' unions and many Democratic legislators view the credit as a federal voucher in disguise. Despite the late push, neither SB3776 nor SB3850 was advanced out of Assignments before the chamber's attention moved on, and both remained stuck in committee as the GOP effort played out. For Illinois families, donors, and prospective scholarship organization founders, the practical takeaway is that the state had not opted in as of this reporting, which means the federal credit will not be available to Illinois residents at launch unless the legislature acts in a future session or special session. We track Illinois' status, and every other state's, on our [Illinois state page](https://eftccredit.com/states/illinois) and the broader [state participation map](https://eftccredit.com/states). Operators weighing whether to stand up a scholarship granting organization can review how the program works in our [explainers](https://eftccredit.com/learn) and find existing organizations in our [SGO directory](https://eftccredit.com/sgos). Sources: - Capitol News Illinois via NPR Illinois: 'We will be left out and left behind': Senate GOP urges action on school choice bills (May 22, 2026): https://www.nprillinois.org/news/2026-05-22/we-will-be-left-out-and-left-behind-senate-gop-urges-action-on-school-choice-bills - Capitol News Illinois: 'We will be left out and left behind': Senate GOP urges action on school choice bills: https://capitolnewsillinois.com/news/we-will-be-left-out-and-left-behind-senate-gop-urges-action-on-school-choice-bills/ - Illinois General Assembly: SB3776 action history (co-sponsor additions May 18-19, 2026; referred to Assignments Feb. 5, 2026): https://my.ilga.gov/Legislation/BillStatus?DocNum=3776&GAID=18&DocTypeID=SB&LegId=167091&SessionID=114 Canonical: https://eftccredit.com/news/illinois-senate-gop-25f-opt-in-push-may-2026 ### Iowa tuition organizations form the Iowa Scholarship Granting Organization for §25F, pitching in-state administration Date: 2026-05-21. Category: state-action. State: IA. Update, October 1, 2026: Treasury's proposed regulations answer the joint-filer question: spouses filing jointly are treated as separate taxpayers, so a married couple can claim up to $3,400 when each spouse gives $1,700, and taxpayers may rely on that rule for 2027 contributions. [How the joint-return rule works](https://eftccredit.com/news/married-couples-3400-25f-credit-joint-return-proposed-rule-october-2026). On May 21, 2026, the Iowa Alliance for Choice in Education (Iowa ACE) published an announcement, authored by Shane Vander Hart, that a group of existing Iowa School Tuition Organizations (STOs) are working together to create the Iowa Scholarship Granting Organization (ISGO). The new entity is already incorporated and is designed to partner with existing Iowa STOs to administer the federal scholarship tax credit program, the 100% federal credit of up to $1,700 for contributions to a qualified Scholarship Granting Organization that launches January 1, 2027. Iowa ACE lists ISGO contacts as Trish Wilger (twilger@iowaace.org) and Josh Bowar (josh@iowachristianschools.org). The move follows [Iowa's opt-in](https://eftccredit.com/states/iowa): Republican Gov. Kim Reynolds announced her plan to opt into the federal program on January 5, 2026, an advance election that clears the way for Iowa donors to begin claiming the credit once the program opens. The pitch is explicitly local. Iowa ACE frames ISGO against the "national organizations that are already seeking SGO business in Iowa," arguing that a homegrown coalition keeps money where the donations originate. "Rather than directing administrative fees out of state, the goal is to keep resources focused on Iowa schools, Iowa families, and Iowa students," the announcement reads. That positioning matters because §25F lets any qualifying nonprofit operate as a Scholarship Granting Organization, which means out-of-state incumbents and in-state coalitions alike can compete for the same donor relationships and the same families. ISGO's answer is to bundle Iowa's existing STO infrastructure (organizations that have administered the state's tuition tax credit for years) into a single federal-facing vehicle rather than ceding the federal channel to a national operator. For donors, the mechanism tracks the federal statute. A contribution to a qualified SGO yields a dollar-for-dollar federal tax credit of up to $1,700, a figure the statute already settles even as the joint-filer treatment remains contested, which we cover in [our breakdown of the $1,700 cap](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026). For the STOs behind ISGO, the calculus is operational: pooling into one incorporated SGO lets them share compliance, donor reporting, and scholarship-disbursement plumbing instead of each rebuilding it alone. Operators weighing that same build-versus-partner question, in Iowa or anywhere, can run a §25F program on software purpose-built for the credit, and our [directory of scholarship-granting organizations](https://eftccredit.com/sgos) and [explainers](https://eftccredit.com/learn) track who is standing up programs in each state. ISGO is a private nonprofit coalition initiative downstream of the state opt-in, not a government action, and the announcement does not claim it is Iowa's first or only federal SGO. The framing is the opposite: it concedes that national organizations are already courting Iowa, and positions ISGO as the in-state alternative. (Secondary reporting from Ballotpedia has described Iowa as roughly the sixth state to indicate participation, a ranking that comes from that coverage rather than the primary sources here.) The contrast with the incumbent-driven approach elsewhere is instructive, much as [Step Up For Students built a dedicated federal vehicle in Florida](https://eftccredit.com/news/step-up-for-students-launches-dedicated-25f-sgo-florida-january-2026): in Iowa, the play is consolidation among established STOs rather than a single dominant operator. What to watch next is whether ISGO's in-state coalition model holds against the national SGOs already pursuing Iowa donors, and how many of Iowa's STOs ultimately route their federal activity through it before the January 1, 2027 launch. With Iowa's advance election on the books, the competition now shifts from whether the state participates to who administers the dollars. We track Iowa's status and participating organizations on the [Iowa state page](https://eftccredit.com/states/iowa), follow the national rollout on the [participation map](https://eftccredit.com/states), and maintain the [running list of states that have made the advance election](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026) as more SGOs incorporate ahead of the launch. Sources: - Iowa Alliance for Choice in Education: Announcing Iowa's Scholarship Granting Organization (May 21, 2026, Shane Vander Hart): https://www.iowaace.org/iowa-scholarship-granting-organization/ - Gov. Kim Reynolds press release: opts into federal education tax credit program (Jan. 5, 2026): https://governor.iowa.gov/press-release/2026-01-05/gov-reynolds-opts-federal-education-tax-credit-program-expands-school-choice-iowa-families - Ballotpedia News: Iowa indicates participation in federal school choice tax credit program (Jan. 8, 2026): https://news.ballotpedia.org/2026/01/08/iowa-indicates-participation-in-federal-school-choice-tax-credit-program/ Canonical: https://eftccredit.com/news/iowa-stos-form-iowa-scholarship-granting-organization-isgo-may-2026 ### North Carolina House overrides Gov. Stein's veto of FSTC opt-in bill (HB 87) Date: 2026-05-20. Category: state-action. State: NC. On May 20, 2026, the [North Carolina](https://eftccredit.com/states/north-carolina) House of Representatives voted 73-46 to override Governor Josh Stein's veto of House Bill 87, the bill that would opt North Carolina into the federal Scholarship Tax Credit (FSTC), the program known to Congress as the Educational Choice for Children Act (ECCA) and codified at IRC §25F. The override is not yet complete: the North Carolina Senate must also vote to override before HB 87 becomes law over the governor's objection. Republicans hold enough seats in the Senate to do so without Democratic support. Governor Stein had vetoed the bill, citing concerns about federal education funding cuts and a preference to wait until the U.S. Treasury Department finalized the program's rules. Stein has said he is open to participating in the program, but in a way that would "benefit public schools, as well." Supporters framed the override as a win for families across all educational settings. Rep. Neal Jackson (R-Moore) said the program "supports public school students, charter school students, private school students, and home school students. It allows taxpayers to voluntarily fund student scholarships, and it gives more students access to quality educational environments." House Speaker Destin Hall called the vote "another major win for North Carolina students and parents." Opponents disputed that framing: Rep. Julie von Haefen (D-Wake) argued the "federal voucher program will significantly decrease federal tax revenue and will have a huge impact on our federal budget." If the Senate completes the override, North Carolina would become the third state where the legislature forced participation against the governor's wishes through a veto override, following Kentucky and Kansas. North Carolina families would then be eligible for scholarships through state-designated [Scholarship Granting Organizations (SGOs)](https://eftccredit.com/learn/sgo-guide) when the federal program goes live on January 1, 2027. Under §25F, scholarships go to K-12 students in households at or below 300% of the relevant Area Median Gross Income, and donors anywhere in the country can claim a non-refundable federal income tax credit of up to $1,700 per taxpayer for contributions to a qualifying SGO. As of late May 2026, the Senate had not yet voted. Sources: - WRAL: NC House overrides Stein veto on federal tax-credit education scholarship bill: https://www.wral.com/news/nccapitol/nc-house-veto-override-trump-tax-credit-education-scholarship-stein-may-2026/ - NC Newsline: NC House overrides Stein veto on federal scholarship tax credit: https://ncnewsline.com/2026/05/20/nc-house-overrides-stein-veto-on-federal-scholarship-tax-credit/ - Ballotpedia: State participation in the federal K-12 education tax credit scholarship program: https://ballotpedia.org/State_participation_in_the_federal_K-12_education_tax_credit_program - Cornell LII: 26 U.S.C. §25F: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/north-carolina-house-overrides-stein-veto-may-2026 ### Connecticut's Lamont calls a §25F opt-in “premature,” and wants to see Treasury's rules first Date: 2026-05-20. Category: state-action. State: CT. Connecticut has joined the ranks of blue-state holdouts on the federal Scholarship Tax Credit (FSTC / ECCA / §25F), and Governor Ned Lamont is in no hurry to decide. In remarks to the Connecticut Mirror published May 20, 2026, Lamont, a Democrat, called the prospect of opting Connecticut into the program "premature," saying flatly, "I just think it's premature," and indicating he would rather wait for federal guidance before committing the state one way or the other. It is a noncommittal posture rather than a refusal: Connecticut is neither in nor out, and the governor has left the door open while pointing to the rules that have not yet been written. This is the first Connecticut-specific gubernatorial position we have logged, and it places Lamont alongside the undecided rather than the opposed. The timing of Lamont's comment is what gives it weight. They came as neighboring New York moved in the opposite direction: Governor Kathy Hochul signaled in early May 2026 that New York plans to join the program, a stated intention rather than a completed election, but enough to raise the regional contrast. The federal credit lets a donor give up to $1,700 to a qualifying Scholarship Granting Organization and claim a dollar-for-dollar federal tax credit, with the program set to launch January 1, 2027. Because the scholarships are funded by donors rather than the state treasury, a participating state spends nothing to open the door, which is precisely why a neighbor's decision to opt in tends to sharpen the question for the states still on the fence. We track [how Democratic governors have split on §25F](https://eftccredit.com/news/democratic-governors-split-on-25f-2026), and Lamont now sits squarely in the wait-and-see column. Lamont is not deliberating in isolation. Patrice McCarthy, executive director of the Connecticut Association of Boards of Education (CABE), publicly backed the governor's instinct to wait for federal guidance, and she framed the hesitation in oversight terms: scholarships routed through private organizations, she argued, lack the public reporting and accountability that govern public-school finances, which in her view creates a serious lack of transparency. That argument echoes the central objection raised by public-education groups nationally, the concern that a program nominally open to all students functions as a channel toward private tuition with thinner public oversight. It is the same fault line visible in [Maryland, where Governor Wes Moore has also declined to tip his hand](https://eftccredit.com/news/maryland-wes-moore-25f-decision-pending-june-2026), and in the broader fight over [who opposes the credit and why](https://eftccredit.com/news/who-opposes-25f-unions-democrats-repeal-bill-2026). For donors, families, and prospective SGO founders in Connecticut, the practical takeaway is that the state remains pending and the clock is the variable to watch. The Connecticut legislature has adjourned, and as of mid-June 2026 there has been no concrete follow-on development, no governor's press release, no Department of Revenue Services or State Department of Education guidance, no SGO listing activity, and no new bill movement, which leaves Lamont's May remarks as the most current statement of where Connecticut stands. The decision itself may turn less on Hartford than on Washington: Treasury's forthcoming regulations, which the department [previewed in June 2026](https://eftccredit.com/news/treasury-previews-25f-proposed-regulations-june-2026), are the "federal guidance" Lamont says he is waiting for, and they will define the room a state has to act. Connecticut's current status, and every other state's, is tracked on our [Connecticut state page](https://eftccredit.com/states/connecticut); you can compare it with [New York's](https://eftccredit.com/states/new-york), see who is already operating on the [SGO directory](https://eftccredit.com/sgos), and read how the credit works on our [learn pages](https://eftccredit.com/learn). Sources: - CT Mirror: Lamont hesitant to opt CT into federal scholarship tax credit (May 20, 2026): https://ctmirror.org/2026/05/20/lamont-ct-federal-scholarship-tax-credit-ny-hochul/ Canonical: https://eftccredit.com/news/connecticut-lamont-premature-25f-opt-in-may-2026 ### Three states that said no to the FSTC are reconsidering: Hawaii, New Mexico, and Oregon Date: 2026-05-19. Category: analysis. Update, October 1, 2026: under Treasury's temporary regulations, a state cannot make its first election just by submitting an SGO list. A state joining for 2027 must file Form 15714 by January 1, 2027 and send its list by February 15, 2027, and a state joining for the first time in a later year must file an advance election under procedures the IRS has yet to issue. [The §25F calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). By mid-May 2026, roughly 30 states had moved toward participating in the federal Scholarship Tax Credit (FSTC / ECCA / §25F), while a handful had affirmatively said they would not. Three of those refusals are now being revisited: according to reporting summarized by Ballotpedia and Education Week, the governors of Hawaii, New Mexico, and Oregon are all reconsidering their positions ahead of the program's January 1, 2027 launch. Minnesota is the exception in that group, where Gov. Tim Walz [said in March that an opt-in was "never going to happen"](https://eftccredit.com/news/minnesota-governor-walz-declines-fstc-march-2026) and has not revisited it. The reconsideration reflects a recurring dynamic in the FSTC debate: because the credit is funded by the federal government rather than state budgets, declining does not save a state money, it simply means donors in that state can still claim the §25F credit by giving to [Scholarship Granting Organizations (SGOs)](https://eftccredit.com/learn/sgo-guide) in opted-in states, with those scholarships funding K-12 students elsewhere. The credit follows the SGO's state of operation, not the donor's residence. For a state that stays out, the practical effect is that its own families are not eligible for scholarships while its residents' donations subsidize students in participating states. Several governors who initially declined or vetoed opt-in legislation cited the same reason: the absence of final IRS implementing regulations. Treasury issued Notice 2025-70 in November 2025 to begin that rulemaking and has said it intends to publish proposed regulations. As guidance firms up, the calculus for holdout states may shift, particularly given that the opt-in is an annual decision, so a state that sits out 2027 can still join in 2028 or any later year by submitting a qualifying SGO list to the U.S. Treasury. Whether Hawaii, New Mexico, or Oregon ultimately reverse course remains to be seen; as of late May 2026 none had formally opted in. But the fact that all three declining states are publicly revisiting the question, rather than treating their earlier "no" as final, underscores how fluid the national map remains with more than half a year before the program begins. Sources: - Ballotpedia News: New York governor says state plans to participate in federal education tax credit scholarship program: https://news.ballotpedia.org/2026/05/19/new-york-governor-says-state-plans-to-participate-in-federal-education-tax-credit-scholarship-program/ - Education Week: Federal Program Will Bring Private School Choice to At Least 4 New States: https://www.edweek.org/policy-politics/federal-program-will-bring-private-school-choice-to-at-least-4-new-states/2026/01 - Ballotpedia: State participation in the federal K-12 education tax credit scholarship program: https://ballotpedia.org/State_participation_in_the_federal_K-12_education_tax_credit_program - Cornell LII: 26 U.S.C. §25F: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/declined-states-reconsidering-hawaii-new-mexico-oregon-may-2026 ### Diocese of Wilmington launches campaign pressing Gov. Meyer to opt Delaware into the federal Scholarship Tax Credit Date: 2026-05-19. Category: state-action. State: DE. The Catholic Diocese of Wilmington, which covers all of Delaware plus Maryland's Eastern Shore, has become the first organized faith community to mount a dated, state-specific campaign pressing its governors to join the federal Scholarship Tax Credit (FSTC / ECCA / §25F). In a pastoral letter published May 19, 2026 in The Dialog, the diocese's official news outlet, Bishop William E. Koenig implored "all leaders and people of good will" to support the program and to contact their elected officials directly. The diocese also stood up a dedicated advocacy page at cdow.org/fstc carrying an explicit call to action: "Tell Governor Meyer to OPT IN For Delaware's Kids!" The campaign names both Delaware Gov. Matt Meyer and Maryland Gov. Wes Moore, and the diocese confirms that, as of its writing, neither governor had made a decision on participation. This is the most concrete Delaware-specific 25F development to date, and it is distinct in character from the political and budget questions surrounding [Maryland's own pending decision under Gov. Moore](https://eftccredit.com/news/maryland-wes-moore-25f-decision-pending-june-2026): here the engine is a grassroots, faith-based opt-in push organized inside Delaware itself. The stakes the diocese describes track the program's federal mechanics. The credit, which takes effect January 1, 2027, lets a taxpayer claim up to $1,700 per taxpayer for donations to qualifying Scholarship Granting Organizations that fund K-12 scholarships for families under 300% of area median income. Crucially, a state must affirmatively opt in for its students to be eligible, and Bishop Koenig framed a December 31, 2026 deadline for the governors to elect in for tax year 2027 scholarships (the campaign page phrases the same window as opting in "by January 1, 2027"). The diocese's warning is pointed: absent a Delaware opt-in, the federal scholarship dollars that Delaware donors generate do not stay home but instead flow to students in states that have elected to participate. That framing, which treats non-participation as a net export of charitable capacity rather than a neutral pass, is exactly the calculus a growing number of states are weighing. Readers can review the opt-in mechanism in our explainer on the [governor opt-in process](https://eftccredit.com/learn/governor-opt-in-process). The campaign also throws Delaware's current status into relief. The state is absent from the IRS's June 8, 2026 notice (IR-2026-76) listing the 27 states that had elected to participate, and the Defense of Freedom Institute's tracker still classifies Delaware as undecided. There is no Delaware General Assembly bill addressing a 25F opt-in or an SGO list introduced as of mid-June 2026, and the governor's official news page carries no 25F press release. In other words, the diocese is operating in a vacuum of formal state action, which is precisely why an organized outside campaign matters: in Delaware, the opt-in decision currently rests with the executive and the legislature, neither of which has moved. Our [Delaware state page](https://eftccredit.com/states/delaware) reflects that pending status, and the broader [state-by-state tracker](https://eftccredit.com/states) shows how Delaware compares to the 27 states already on the IRS list and to neighbors still deciding. For Scholarship Granting Organizations and prospective donors, the Wilmington campaign is a useful signal even though it changes nothing legally on its own. A pastoral letter and an advocacy website do not enroll Delaware in the program, and the diocese itself is careful to note that the governors retain the decision. But the effort demonstrates that faith-based school networks, which stand to be among the largest beneficiaries of 25F scholarships, are beginning to organize state-level pressure rather than wait on rulemaking in Washington. If Delaware does elect in before the year-end deadline, the organizations positioned to receive donations will need to be on the state's approved SGO list and compliant with the program's structure from day one. Diocesan school systems and independent operators evaluating that path can review the [SGO directory](https://eftccredit.com/sgos) and our guide on [how to start an SGO](https://eftccredit.com/learn/how-to-start-an-sgo). For now, Delaware's participation remains an open question, and the Diocese of Wilmington has made itself the loudest voice asking Gov. Meyer to answer it. Sources: - The Dialog (Diocese of Wilmington): Bishop Koenig implores all leaders, people of good will to support Federal Scholarship Tax Credit (May 19, 2026): http://thedialog.org/education-and-careers/bishop-koenig-of-diocese-of-wilmington-implores-all-leaders-people-of-good-will-to-support-federal-scholarship-tax-credit/ - Diocese of Wilmington: Federal Scholarship Tax Credit campaign page (cdow.org/fstc): https://cdow.org/ministries/catholic-schools/federal-scholarship-tax-credit/ - MyChesco: Wilmington Diocese Urges States to Join School Tax Credit Program (May 22, 2026): https://www.mychesco.com/a/news/regional/wilmington-diocese-urges-states-to-join-school-tax-credit-program/ - IRS: More than half the U.S. states signed up to participate in the federal Scholarship Tax Credit program (IR-2026-76; Delaware absent from the 27-state list): https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill Canonical: https://eftccredit.com/news/diocese-of-wilmington-25f-opt-in-campaign-meyer-may-2026 ### Illinois public debate over the Federal Scholarship Tax Credit intensifies as Pritzker decision pends Date: 2026-05-18. Category: state-action. State: IL. Update, October 1, 2026: the temporary regulations change the last point above. A state cannot make its first election just by submitting an SGO list: for 2027 the advance election on Form 15714 is due by January 1, 2027 with the list by February 15, 2027, and a state first joining in 2028 or later must file an advance election under IRS guidance still to come. [The §25F calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). With [Illinois](https://eftccredit.com/states/illinois) still undecided on the federal Scholarship Tax Credit (FSTC / ECCA / §25F), mid-May 2026 has brought a noticeable uptick in public pressure on Governor JB Pritzker from both sides. The credit was enacted as part of the One Big Beautiful Bill Act (P.L. 119-21, §70411) on July 4, 2025, and takes effect for donations made on or after January 1, 2027. A state must opt in, with the governor submitting a list of qualifying [Scholarship Granting Organizations (SGOs)](https://eftccredit.com/learn/sgo-guide) to the U.S. Treasury, for taxpayers to claim the credit against donations to SGOs in that state. On May 18, 2026, NPR Illinois reported State Rep. Mike Coffey urging Pritzker to opt in, framing participation as "no cost to Illinois taxpayers" because the credit is federal. State Rep. Amy Grant has separately called for Illinois to join, arguing the program would "give Illinois families new tools to help their children succeed without additional costs to the state." On May 15, 2026, the Chicago Sun-Times ran an op-ed by Ralph Martire, Executive Director of the Center for Tax and Budget Accountability, urging Pritzker to decline. Martire argued that the program would cost the federal government an estimated $134 billion in foregone revenue over a decade, that §25F's 300%-of-Area-Median-Gross-Income eligibility ceiling reaches well into the upper-middle class (in his Chicago example, families earning up to roughly $359,700), and that prior studies of state tax-credit and voucher programs have raised concerns about academic outcomes and SGO admissions practices. The basic facts of the program are not in dispute. Under §25F, individual federal taxpayers can claim a non-refundable credit of up to $1,700 per taxpayer for cash contributions to qualifying SGOs in opted-in states; the credit follows the SGO's state of operation, not the donor's residence. Scholarships under §25F can fund tuition, tutoring, special-needs services, books, supplies, and other qualified K-12 expenses for students in households at or below 300% of the relevant Area Median Gross Income. What is contested in Illinois, as in other pending states, is whether participation is on balance good policy for the state's students and schools. The opt-in decision is annual: a governor who declines in 2027 can still submit a qualifying SGO list in 2028 or any later year. Illinois is one of roughly 14 states that, as of mid-May 2026, have not publicly committed either way. Sources: - NPR Illinois: A lawmaker urges state leaders to opt in to the Federal Scholarship Tax Credit Program: https://www.nprillinois.org/news/2026-05-18/a-lawmaker-urges-state-leaders-to-opt-in-to-the-federal-scholarship-tax-credit-program-first-listen - Chicago Sun-Times (Ralph Martire op-ed): Gov. Pritzker should say no to the federal tax credit scholarship program: https://chicago.suntimes.com/columnists/2026/05/15/federal-tax-credit-scholarship-educational-choice-children-act-illinois-pritzker-trump-ralph-martire - DuPage Policy Journal: Representative Amy Grant urges Illinois to join federal Education Freedom Tax Credit program: https://dupagepolicyjournal.com/representative-amy-grant-urges-illinois-to-join-federal-education-freedom-tax-credit-program - Cornell LII: 26 U.S.C. §25F: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/illinois-public-debate-intensifies-pritzker-may-2026 ### §25F becomes a 2026 Connecticut governor's-race issue as Fazio, calling the credit “literally free money,” wins the GOP nomination Date: 2026-05-16. Category: state-action. State: CT. Connecticut's decision on the federal Scholarship Tax Credit (FSTC / ECCA / §25F) has moved from a quiet executive-branch question into the middle of a statewide campaign. On May 16, 2026, at the Republican state convention at Mohegan Sun in Uncasville, State Senator Ryan Fazio (R-Greenwich) won the GOP gubernatorial nomination on the first ballot, taking roughly 92 percent of delegates (reported in some accounts as more than 91 percent) over challenger Betsy McCaughey. Fazio is the most vocal legislative proponent of opting Connecticut into §25F, and his nomination means the program's fate is now tied to a defined contrast between the two men most likely to control it: the challenger who wants in, and the incumbent who has said wait. The contrast is unusually clean because both candidates have said the quiet part out loud. In remarks to the Connecticut Mirror reported May 20, 2026, Fazio described the federal credit as "literally free money" for the state and "a win-win for everybody," reasoning that because the scholarships are funded by donors rather than the state treasury, Connecticut can open the door at no cost to its own budget. Governor Ned Lamont, a Democrat seeking another term, has taken the opposite posture, telling the same outlet, "I just think it's premature," and saying he would rather wait for Treasury's forthcoming guidance, the proposed regulations Treasury has said it will issue no later than the end of September 2026, before committing the state. We covered [Lamont's "premature" comment and his wait-and-see posture](https://eftccredit.com/news/connecticut-lamont-premature-25f-opt-in-may-2026) in full; Fazio's nomination is what converts that posture into a campaign dividing line. The immediate trigger for the renewed Connecticut debate was regional. In early May 2026, New York signaled it intends to join the program, and a neighbor moving in tends to sharpen the question for states still on the fence. The mechanics are straightforward: §25F lets a donor give up to $1,700 to a qualifying Scholarship Granting Organization and claim a dollar-for-dollar federal tax credit, with the program set to launch January 1, 2027, and a participating state spends nothing from its own treasury to open the door. That is the basis for Fazio's "free money" framing. The countervailing view, voiced by Patrice McCarthy of the Connecticut Association of Boards of Education (CABE), sides with Lamont's caution on oversight grounds, arguing that scholarships routed through private organizations lack the public reporting and accountability that govern public-school finances. For donors, families, and prospective SGO founders in Connecticut, the practical takeaway is that the state's posture is now a moving target tied to an election rather than a settled administrative call. Lamont controls the decision today and has parked it pending federal rules; a Fazio victory in November would point the other direction, though the legislature and Treasury's final regulations would still shape the room any governor has to act. The race makes §25F a live issue voters can weigh in on directly, which is rare for a program this technical. Connecticut's current status, and every other state's, is tracked on our [Connecticut state page](https://eftccredit.com/states/connecticut); you can compare it with [New York's](https://eftccredit.com/states/new-york), see who is already operating on the [SGO directory](https://eftccredit.com/sgos), and read how the credit works on our [learn pages](https://eftccredit.com/learn). Sources: - CT Mirror: Lamont hesitant to opt CT into federal scholarship tax credit, after NY moves to join (May 20, 2026): https://ctmirror.org/2026/05/20/lamont-ct-federal-scholarship-tax-credit-ny-hochul/ - CT Mirror: Ryan Fazio wins the CT GOP nomination for governor (May 16, 2026): https://ctmirror.org/2026/05/16/ryan-fazio-wins-the-ct-gop-nomination-for-governor/ - Connecticut Public: Ryan Fazio wins the CT GOP nomination for governor (May 16, 2026): https://www.ctpublic.org/2026-05-16/ryan-fazio-wins-the-ct-gop-nomination-for-governor Canonical: https://eftccredit.com/news/connecticut-fazio-25f-governors-race-may-2026 ### Massachusetts coalition of 124 organizations launches to push Gov. Healey into the §25F scholarship tax credit Date: 2026-05-13. Category: state-action. State: MA. Update, October 1, 2026: Treasury's proposed regulations keep the cap at $1,700 per person but treat spouses filing jointly as separate taxpayers, so a married couple can claim up to $3,400 when each spouse gives $1,700. To join for 2027, a state must file its advance election on Form 15714 by January 1, 2027 and submit its SGO list by February 15, 2027. [Our read of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026). A new advocacy coalition launched in Massachusetts on May 13, 2026 to pressure Gov. Maura Healey to opt the state into the federal Education Freedom Tax Credit (§25F), the dollar-for-dollar credit for donations to nonprofit scholarship-granting organizations. The Massachusetts Educational Opportunities Coalition (macoalition.com), spearheaded by the National Parents Union and backed by the Pioneer Institute, the Lynch Foundation, and the Boston Foundation, counted 124 member organizations on launch day, according to reporting by the Bay State Banner. That launch-day roster included 45 individual Catholic schools, 18 Montessori schools, and 13 Jewish day schools, alongside umbrella school organizations and dozens of YMCAs and Boys and Girls Clubs. Former Lt. Gov. Tim Murray, now president of the Worcester Regional Chamber of Commerce, estimated the credit could generate roughly $660 million annually in Massachusetts. The mechanics behind the campaign are specific. Under §25F, a state participates only when its governor files an advance election with the IRS and designates qualifying Scholarship Granting Organizations (SGOs). As one coalition framing put it, "The governor has to opt in to get this benefit." Once a state elects in, donors anywhere in the country can claim a dollar-for-dollar federal income tax credit of up to $1,700 per taxpayer for contributions to a qualifying SGO, which then awards K-12 scholarships to families. The credit goes live January 1, 2027. The coalition's central pitch is that the program "costs the state nothing" because the scholarship money comes entirely from private donations rather than the state budget, an advocacy argument rather than an independently verified fiscal finding. We track the statutory detail behind the cap in our explainer on why the credit is [$1,700, not $3,400](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026). Healey, a Democrat, has not committed. Her administration has said it is waiting on guidance from the U.S. Treasury and the Department of Education before deciding, a posture that places Massachusetts among the blue states still on the sidelines as the 2027 launch approaches. That fence-sitting stands in contrast to the 27 states the IRS counted on its [advance-election roster](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026) by mid-2026, and to neighboring [New York, where Gov. Kathy Hochul signaled she would opt in](https://eftccredit.com/news/new-york-governor-hochul-opts-in-may-2026). The Massachusetts standoff is one more data point in how [Democratic governors have split on §25F](https://eftccredit.com/news/democratic-governors-split-on-25f-2026): some leaning in, others waiting for federal cover. The coalition's strategy is to build a broad, cross-sector membership base, faith schools, secular schools, and community organizations, large enough that opting in becomes politically easier than continuing to decline. For donors, families, and prospective SGO founders, the practical takeaway is that Massachusetts remains a non-participating state for now. There is no Massachusetts program to plan around, only an executive decision that has not been made, which means Massachusetts taxpayers cannot yet route §25F-eligible donations to in-state organizations and Massachusetts families cannot receive the scholarships. If Healey does elect in, the state would need a slate of designated SGOs ready to intake donations, verify family eligibility, and disburse scholarships before the January 2027 launch. Operators thinking about standing up one of Massachusetts's first SGOs can review how the organizations work in our [explainers](https://eftccredit.com/learn) and see the current national landscape in the [SGO directory](https://eftccredit.com/sgos); the back-office work of intake, eligibility checks, and scholarship disbursement can be run on software built specifically for §25F. Massachusetts's current status, and every other state's, is tracked on our [Massachusetts state page](https://eftccredit.com/states/massachusetts) and the [national participation map](https://eftccredit.com/states). It is worth noting that the coalition has grown well beyond its launch-day footprint. As of mid-June 2026, macoalition.com describes a membership of more than 6,000 organizations and frames its potential impact around a different figure, roughly $333 million annually at a 15% participation rate, rather than the 124-organization launch framing. The forward question is whether that organizing momentum, and whatever guidance Treasury ultimately issues, is enough to move Healey from "evaluating" to filing an advance election before the 2027 launch. With an organized cross-sector campaign at home and a neighboring blue state already leaning in, whether Massachusetts participates will be measured by one thing: whether the governor ever files an advance election with the IRS. Sources: - Massachusetts Educational Opportunities Coalition (official site): https://www.macoalition.com/ - Franklin Observer (StateHouse News wire): Critics say Massachusetts missing out on chance to lift education: https://franklinobserver.town.news/g/franklin-town-ma/n/378661/critics-say-massachusetts-missing-out-chance-lift-education - StateHouse News: Critics say Massachusetts missing out on chance to lift education: https://www.statehousenews.com/news/education/critics-say-massachusetts-missing-out-on-chance-to-lift-education/article_89e88e39-fda5-4b30-ab65-328d04c2f8ae.html Canonical: https://eftccredit.com/news/massachusetts-educational-opportunities-coalition-launch-healey-25f-may-2026 ### New Jersey Gov. Sherrill won't commit to §25F opt-in, says she will 'evaluate' after Treasury finalizes rules Date: 2026-05-12. Category: state-action. State: NJ. Update, October 1, 2026: Treasury released the rules on October 1, as proposed regulations open for comment and temporary regulations that set the state calendar: to take part in 2027, New Jersey would have to file Form 15714 by January 1, 2027 and submit its SGO list by February 15, 2027. The proposed rules treat spouses filing jointly as separate taxpayers, so a couple can claim up to $3,400 when each spouse gives $1,700. [Our read of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026). New Jersey Gov. Mikie Sherrill has declined to commit to opting New Jersey into the federal Education Freedom Tax Credit (§25F), telling Jewish Insider on May 12, 2026 that she will wait for federal rules before deciding. In a statement reported by the outlet, deputy press secretary Maggie Garbarino said the governor "will evaluate the program once the Trump Administration has finalized and published its rules," and stressed that Sherrill's top priority is building New Jersey into the best public school system in the nation for all of the state's children. Sherrill, a Democrat, was sworn in on January 20, 2026 as New Jersey's 57th governor. The non-committal posture leaves New Jersey off the IRS advance-election roster, which counted 27 states as of mid-April 2026, none of them New Jersey. The timing is notable. The statement came days after neighboring New York signaled it would participate: Gov. Kathy Hochul committed to opt in during a meeting with Jewish leaders, a verbal commitment reported by Jewish Insider on May 8, 2026 and folded into her FY2027 executive budget proposal. New York has not yet filed a formal advance election with the IRS, and Hochul, like Sherrill, said her office wants to review the federal details first. But the contrast placed Sherrill's "evaluate later" language against a neighboring Democratic governor who had already [said yes in principle](https://eftccredit.com/news/new-york-governor-hochul-opts-in-may-2026). We track that broader divide in our coverage of how [Democratic governors have split on §25F](https://eftccredit.com/news/democratic-governors-split-on-25f-2026). The mechanics behind the decision are straightforward. Under §25F, a state opts in when its governor files an advance election with the IRS (Form 15714) and designates qualifying Scholarship Granting Organizations (SGOs). Donors anywhere in the country can then claim a dollar-for-dollar federal income tax credit of up to $1,700 per taxpayer for contributions to a qualifying SGO, which awards K-12 scholarships to families earning up to 300% of their area median gross income. The credit goes live January 1, 2027. A state that does not file an election simply does not have a program: its residents see no in-state SGOs to give to, and its families cannot receive the scholarships, even though the federal credit exists. For the statutory detail on the cap, see our explainer on why the credit is [$1,700, not $3,400](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026). For donors, families, and prospective SGO founders, the practical takeaway is that New Jersey remains a non-participating state for now. There is no New Jersey program to plan around, only an executive decision that has not been made, which means New Jersey taxpayers cannot yet route §25F-eligible donations to in-state organizations. A grassroots push is trying to change that: OptInNJ.org, run by the NJ Academic Access Coalition of parents, educators, and community members, is urging Sherrill to issue New Jersey's intent to opt in before the January 1, 2027 launch. New Jersey's current status, and every other state's, is tracked on our [New Jersey state page](https://eftccredit.com/states/new-jersey) and the [national participation map](https://eftccredit.com/states). Operators thinking about standing up one of New Jersey's first SGOs, so the infrastructure exists if and when the state elects in, can review how the organizations work in our [explainers](https://eftccredit.com/learn) and see the current landscape in the [SGO directory](https://eftccredit.com/sgos); the back-office work of intake, eligibility checks, and scholarship disbursement can be run on software built specifically for §25F. The forward question is whether the federal rules Sherrill is waiting on arrive in time to force a decision before the 2027 launch. Treasury has begun previewing its §25F regulations, and the closer the program gets to January 1 without a New Jersey election, the longer New Jersey donors will hold credit-eligible dollars with no in-state place to send them. With a neighboring blue state already leaning in and an organized opt-in campaign at home, whether Sherrill's "evaluate" stance becomes a yes will be measured by one thing: whether New Jersey ever files an advance election with the IRS. Sources: - Jewish Insider: Mikie Sherrill to evaluate N.J. adoption of federal Education Freedom Tax Credit (May 12, 2026): https://jewishinsider.com/2026/05/mikie-sherrill-education-tax-initiative-not-committed-kathy-hochul/ - Jewish Insider: Kathy Hochul embraces tax initiative for Jewish education (May 8, 2026): https://jewishinsider.com/2026/05/kathy-hochul-new-york-tax-credit-jewish-education/ - OptInNJ.org: NJ Academic Access Coalition petition: https://optinnj.org/ - Patch NJ: A School Choice Tax Credit Is Waiting. How Long Until New Jersey Opts In?: https://patch.com/new-jersey/hoboken/school-choice-tax-credit-waiting-long-new-jersey-opts - New Jersey Policy Institute: Education Freedom Tax Credit: https://newjerseypolicyinstitute.org/about/education-freedom-tax-credit/ - IRS: Treasury, IRS allow states to make an advance election to participate in the new federal tax credit for contributions to SGOs (OBBB): https://www.irs.gov/newsroom/treasury-irs-allow-states-to-make-an-advance-election-to-participate-in-the-new-federal-tax-credit-for-individual-contributions-to-scholarship-granting-organizations-under-the-one-big-beautiful-bill Canonical: https://eftccredit.com/news/new-jersey-sherrill-noncommittal-25f-evaluate-may-2026 ### What pending states stand to forgo: a closer look at Pennsylvania Date: 2026-05-09. Category: analysis. State: PA. Update, October 1, 2026: Treasury's temporary regulations put dates on this decision. A state that has not yet elected must file its 2027 advance election on Form 15714 by January 1, 2027 and its SGO list by February 15, 2027, and a state that waits until 2028 or later cannot join just by submitting a list; it must first file an advance election under IRS guidance still to come. [The §25F calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). With New York's May 8, 2026 announcement, the count of states moving toward participation in the federal Scholarship Tax Credit (FSTC / ECCA / §25F) continues to grow. But 14 states, including several of the country's most populous, remain undecided, and the program's January 1, 2027 launch is approaching. [Pennsylvania](https://eftccredit.com/states/pennsylvania), where Governor Josh Shapiro has not announced a decision, has emerged as one of the most-watched holdouts. What does "not opting in" cost residents of a pending state? In practical terms: donors anywhere in the country can still claim the §25F federal credit (up to $1,700 per taxpayer) by giving to [Scholarship Granting Organizations (SGOs)](https://eftccredit.com/learn/sgo-guide) in opted-in states, but the scholarships those donations fund will go to K-12 students in the opted-in states, not back home. The credit follows the SGO's state of operation, not the donor's residence. States must designate their qualifying SGOs through the governor's annual submission to the U.S. Treasury. The America First Policy Institute (AFPI), an advocacy organization, publishes an "EFTC Donation Impact Projector" that estimates state-level foregone donations under different participation assumptions. For Pennsylvania, the projector estimates approximately $1.97 billion in foregone scholarship funding over the 2027-2029 window if the state does not opt in, translating to roughly 354,000 scholarships at a $5,000 average. The projector uses 2022 IRS Statistics of Income filer counts and assumes a 10% individual / 6% joint baseline participation rate rising 2 points annually, rates the tool notes are "set well below" the 41.4% participation observed for the CARES Act charitable deduction. Numbers from advocacy projectors should be read as illustrative scenarios with stated assumptions, not as official forecasts; actual takeup will depend on donor behavior, final IRS rulemaking under Notice 2025-70, and the SGO ecosystem that develops in each state. The opt-in decision is annual: a governor who declines in 2027 can still submit a qualifying SGO list in 2028 or any subsequent year. For Pennsylvania and other pending states, including New Jersey, Illinois, Michigan, Massachusetts, Maryland, California, Washington, and others, that means the cost of waiting is bounded by the program year, but compounds annually as long as the state stays out. Eligible students under §25F are those in households at or below 300% of the relevant Area Median Gross Income, and scholarship funds can support tuition as well as a range of other educational expenses including tutoring, educational therapies, testing fees, and educational software. Sources: - AFPI: The Cost of Opting Out, EFTC Donation Impact Projector: https://afpieftc.netlify.app/ - RealClearEducation: A Free Win for Governors, If They'll Take It: https://www.realcleareducation.com/articles/2026/04/23/a_free_win_for_governors_if_theyll_take_it_1178694.html - Cornell LII: 26 U.S.C. §25F: https://www.law.cornell.edu/uscode/text/26/25F - Teach Coalition: National Federal Tax Credit Scholarship Tracker: https://teachcoalition.org/federalscholarships/ Canonical: https://eftccredit.com/news/pending-states-whats-at-stake-pennsylvania-may-2026 ### Colorado Gov. Polis publicly defends his FSTC opt-in at Denver event Date: 2026-05-09. Category: state-action. State: CO. On May 9, 2026, [Colorado](https://eftccredit.com/states/colorado) Governor Jared Polis appeared at an Invest in Education Foundation event at the Denver Museum of Nature and Science to publicly defend his December 2025 decision to opt Colorado into the federal Scholarship Tax Credit (FSTC / ECCA / §25F). About 150 educators, parents, and students attended, according to Chalkbeat Colorado. The event came against the backdrop of recent state-legislative pushback. Colorado lawmakers had shelved a bill that would have required [Scholarship Granting Organizations (SGOs)](https://eftccredit.com/learn/sgo-guide) receiving §25F-credited funds to comply with Colorado's anti-discrimination laws, a measure Polis's office had opposed on the grounds that it would discourage SGO participation in the state. Polis drew a distinction between the federal credit and state-funded programs. "When you give $100 to any charity, it can be a church, it can be something that discriminates," he said, framing §25F as a federal tax incentive for private giving rather than a public expenditure subject to state non-discrimination rules (as in, for example, Colorado's universal preschool program). He said opting in "puts more control of a child's education in the hands of their parents," and reiterated his earlier rationale that Colorado shouldn't "leave money on the table" while other states stay out. Under §25F, individual federal taxpayers can claim a non-refundable credit of up to $1,700 per taxpayer for cash contributions to qualifying SGOs in opted-in states. The credit takes effect for donations made on or after January 1, 2027. Scholarships must go to K-12 students whose household income is at or below 300% of the relevant Area Median Gross Income, and can fund tuition, tutoring, educational therapies, testing fees, and other qualified expenses. Sources: - Chalkbeat Colorado: Polis defends his decision to opt Colorado into Trump-backed education tax credit: https://www.chalkbeat.org/colorado/2026/05/09/colorado-governor-jared-polis-talks-federal-education-tax-credit-program/ - Cornell LII: 26 U.S.C. §25F: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/colorado-governor-polis-defends-opt-in-may-2026 ### New York Gov. Hochul announces opt-in to Federal Scholarship Tax Credit (FSTC / ECCA) Date: 2026-05-08. Category: state-action. State: NY. Update, October 1, 2026: Treasury's temporary regulations replace the open-ended timeline with fixed dates. A state joining for 2027 must file its advance election on Form 15714 by January 1, 2027 and complete it with its SGO list by February 15, 2027, and in its first year a state cannot elect just by submitting a list. [The 2027 calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). On May 8, 2026, [New York](https://eftccredit.com/states/new-york) Governor Kathy Hochul announced that New York intends to opt into the federal Scholarship Tax Credit (FSTC), the program known to Congress as the Educational Choice for Children Act (ECCA) and codified at IRC §25F. Hochul disclosed the plan at a private gathering with Agudath Israel of America and incorporated it into her FY2027 executive budget proposal. A spokesperson for the governor confirmed the plan to Jewish Insider, saying Hochul told Jewish leaders she will opt in. The announcement is not the same as formal certification. Hochul's office told Chalkbeat New York that it "awaits information from the federal government on the program and will thoroughly review the details of the policy for poison pills that could harm New York's education system." Under §25F, each participating state's governor submits a list of qualifying [Scholarship Granting Organizations (SGOs)](https://eftccredit.com/learn/sgo-guide) to the U.S. Treasury; states have several months to complete that step ahead of the program's January 1, 2027 launch. If New York completes the opt-in, families across the state will be eligible for scholarships through state-designated SGOs once the program goes live. Federal taxpayers anywhere in the country can claim a non-refundable federal income tax credit of up to $1,700 per taxpayer for donations to a qualifying SGO; under §25F, scholarships must go to K-12 students in opted-in states whose household income is at or below 300% of the relevant Area Median Gross Income. Implementing guidance from the IRS is still in development. Treasury issued Notice 2025-70 in November 2025 seeking public comment on issues including state certification, SGO requirements, donor substantiation, and household-income verification, the kinds of details Hochul's office indicated it wants to review before finalizing. The annual structure of the opt-in means New York's participation, once certified, must be re-certified each January 1 in future years. Sources: - Chalkbeat New York: New York Gov. Hochul plans to opt into federal tax-credit scholarship: https://www.chalkbeat.org/newyork/2026/05/08/kathy-hochul-opts-into-federal-tax-scholarship-school-choice/ - THE CITY: Hochul Intends to Opt Into Federal Tax Credit in Win for Private School Choice: https://www.thecity.nyc/2026/05/08/hochul-school-choice-tax-credit-voucher/ - The 74: New York Gov. Hochul Plans to Opt Into Federal Tax-Credit Scholarship: https://www.the74million.org/article/new-york-gov-hochul-plans-to-opt-into-federal-tax-credit-scholarship/ - Teach Coalition: National Federal Tax Credit Scholarship Tracker: https://teachcoalition.org/federalscholarships/ - Cornell LII: 26 U.S.C. §25F: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/new-york-governor-hochul-opts-in-may-2026 ### Connecticut's only §25F vote of 2026 was a doomed floor amendment. The legislative door is now closed until the governor acts. Date: 2026-05-06. Category: state-action. State: CT. Update, October 1, 2026: Treasury's temporary regulations spell out what a state must do to join for 2027. The governor, or whoever state law designates to make the election, files an advance election on Form 15714 by January 1, 2027 and then submits the state's SGO list by February 15, 2027; in its first year, a state cannot elect just by sending a list. [The 2027 calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). Connecticut's 2026 legislative session produced exactly one recorded attempt to join the federal Scholarship Tax Credit (FSTC / ECCA / §25F), and it never had a path to passage. During a late-night Senate debate on May 4, 2026 over HB 5468, a homeschool oversight bill, Sen. Ryan Fazio (R-Greenwich) offered a floor amendment that would have opted Connecticut into the program, describing the federal credit as "literally free money" for the state. The amendment was one of 39 that Republicans filed against the bill; the majority Democrats defeated nine of them and the remaining amendments were withdrawn. By the reporting on the debate, the §25F amendment did not pass. HB 5468 itself cleared the Senate 22-14 near midnight. The mechanics of §25F are what made the amendment attractive to its sponsor and unobjectionable on cost. The program, which launches January 1, 2027, lets individual taxpayers claim a federal credit of up to $1,700 for donations to qualifying Scholarship Granting Organizations, with the scholarships funded by donors rather than the state treasury. A state's only required act is for the governor to opt in by submitting a list of eligible SGOs to the U.S. Treasury. That structure is why Fazio framed participation as costless to Connecticut taxpayers. It is also why opting in is, by statute, an executive decision rather than a legislative one, which left the floor amendment as a political signal more than a viable vehicle. Whatever the amendment's merits, the calendar closed the question for the year. The Connecticut General Assembly adjourned its 2026 regular session sine die on May 6, 2026, two days after the HB 5468 debate. Adjournment means no further bill can opt the state in until a future session convenes, so for the rest of 2026 the legislative route is shut. That leaves a single remaining path: a unilateral opt-in by Gov. Ned Lamont. In coverage dated May 20, 2026, Lamont was noncommittal, calling the move premature and signaling he would rather wait for federal guidance, the proposed §25F regulations Treasury has said it will issue no later than the end of September 2026. His hesitancy stood out against neighboring New York, where Gov. Kathy Hochul had just moved to join the program. Connecticut now sits in the same holding pattern as several other Democratic-led states: the door to participation is open through the governor's pen but unused, with the legislature unable to force the issue. For donors, families, and anyone considering founding an SGO in the state, that means there is no Connecticut program to plan around yet, only an executive decision that has not been made. We track the state's status and every other state's on our [Connecticut state page](https://eftccredit.com/states/connecticut) and the [state participation map](https://eftccredit.com/states). For context on the broader divide, see our coverage of [New York's opt-in under Gov. Hochul](https://eftccredit.com/news/new-york-governor-hochul-opts-in-may-2026) and [how Democratic governors have split on §25F](https://eftccredit.com/news/democratic-governors-split-on-25f-2026). Operators weighing whether to stand up an SGO can start with our [explainer on how the credit works](https://eftccredit.com/learn) and our [directory of Scholarship Granting Organizations](https://eftccredit.com/sgos). Sources: - CT Mirror: Lamont noncommittal on federal scholarship tax credit after NY moves to join (May 20, 2026): https://ctmirror.org/2026/05/20/lamont-ct-federal-scholarship-tax-credit-ny-hochul/ - CT News Junkie: Senate Passes Homeschool Oversight Bill In Late-Night Session (May 4, 2026): https://ctnewsjunkie.com/2026/05/04/senate-passes-homeschool-oversight-bill-in-late-night-session/ Canonical: https://eftccredit.com/news/connecticut-fazio-25f-amendment-fails-sine-die-may-2026 ### Tennessee enacts §25F enabling law (Public Chapter 720): DOE to certify SGOs, and homeschoolers are in Date: 2026-05-05. Category: state-action. State: TN. Update, October 1, 2026: Treasury's proposed regulations define a school by reference to section 530(b)(3)(B), a school providing K-12 education as determined under state law, and leave the meaning of school and the full expense list to separate section 530 guidance that has not been issued, so whether Tennessee home-school costs qualify federally is still open. The proposed rules do settle the joint-filer question: spouses filing jointly are treated as separate taxpayers, so a married couple can claim up to $3,400 when each spouse gives $1,700. [Our read of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026). On May 5, 2026, Tennessee enacted SB 2206, the "Federal Tax Credit Scholarship Act," which was signed by the governor and assigned Public Chapter Number 720. The measure, carried by primary sponsor Sen. Jack Johnson (R, District 27), cleared the Senate 27 to 5 on March 19 and the House 75 to 19 on March 30 before reaching the governor's desk. It is Tennessee's enabling statute for the federal Education Freedom Tax Credit under Internal Revenue Code §25F, the program that provides a 100% federal income tax credit of up to $1,700 for an individual's qualified cash contribution to an eligible scholarship granting organization (SGO). The act takes effect for taxable years beginning after December 31, 2026, lining up with the §25F program's January 1, 2027 launch. The law spells out the mechanics on the state side. It directs the Commissioner of the Department of Education to elect to participate in the federal program, to certify eligible scholarship granting organizations, to submit that list of certified SGOs to the U.S. Secretary of the Treasury, and to publish the list on the department's website. The state-level election by the Commissioner is what pairs with the federal advance-election step (IRS Form 15714), which we explain in our coverage of [the advance-election mechanism](https://eftccredit.com/news/irs-form-15714-advance-election-december-2025). Tennessee's Fiscal Review Committee classified the bill's fiscal impact as not significant, on the basis that the work can be absorbed by existing department staff and resources rather than new state spending. Tennessee now appears on the IRS roster of participating states published June 8, 2026, which we track alongside the [running national list of advance-election states](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026). The detail that sets Tennessee apart is who can use the scholarships. The act's scholarships cover qualified elementary and secondary expenses, and the fiscal note explicitly states that this includes homeschool expenses, as federal law permits. That is a deliberate contrast with Tennessee's own 2025 Education Freedom Scholarship Act, the state-funded program that excludes homeschool expenses. In other words, families educating children at home, who are shut out of the state's flagship 2025 program, are squarely inside the §25F channel that Public Chapter 720 builds. That divergence is part of a broader 50-state pattern we have documented, in which the federal credit reaches homeschoolers in places where state-level dollars do not. For SGOs and donors, the practical takeaway is that Tennessee has chosen the certification-and-submission route rather than waiting on the sidelines. Once the Department of Education certifies organizations and publishes the list, qualifying nonprofits can begin accepting contributions that yield the dollar-for-dollar federal credit, a figure the statute already settles at $1,700 even while joint-filer treatment remains contested, which we cover in [our breakdown of the cap](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026). Because §25F lets any qualifying nonprofit operate as an SGO, in-state organizations and national operators alike can compete for Tennessee donors and families. Operators standing up a program, in Tennessee or elsewhere, can run a §25F operation on software purpose-built for the credit, and our [directory of scholarship granting organizations](https://eftccredit.com/sgos) and [explainers](https://eftccredit.com/learn) track who is forming programs in each state. What to watch next is the certification timeline: how quickly the Department of Education names eligible SGOs, submits the list to Treasury, and publishes it ahead of the January 1, 2027 launch, and how many organizations choose to serve Tennessee's homeschool families specifically. With the enabling statute on the books, the question shifts from whether Tennessee participates to who administers the dollars. We track Tennessee's status and participating organizations on the [Tennessee state page](https://eftccredit.com/states/tennessee) and follow the national rollout on the [participation map](https://eftccredit.com/states) as more states finalize their elections. Sources: - Tennessee General Assembly: SB 2206 bill history (Public Chapter 720, signed 05/05/2026): https://wapp.capitol.tn.gov/apps/BillInfo/Default.aspx?BillNumber=SB2206&GA=114 - Tennessee Fiscal Review Committee: SB 2206 / HB 2187 fiscal note (Feb. 28, 2026): https://capitol.tn.gov/Bills/114/Fiscal/SB2206.pdf - IRS: More than half the U.S. states signed up to participate in the Federal Scholarship Tax Credit (IR-2026-76, lists Tennessee): https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill Canonical: https://eftccredit.com/news/tennessee-enacts-25f-enabling-law-public-chapter-720-homeschoolers-included-may-2026 ### Colorado lawmakers kill their own bill to put state guardrails on the §25F SGO list Date: 2026-04-30. Category: state-action. State: CO. Update, October 1, 2026: Treasury's temporary regulations, which apply from September 1, 2026, answer the state-authority question this bill would have tested. A participating state must list every qualifying organization located in the state that asks to be included, and it may not require SGOs to operate under rules more restrictive than §25F, "such as by limiting the type of school that scholarship recipients may attend." [What states can and cannot require](https://eftccredit.com/news/one-national-standard-states-cannot-add-sgo-rules-25f-october-2026). Colorado has spent more time inside the federal Scholarship Tax Credit (FSTC / ECCA / §25F) than almost any Democratic-led state, and on April 30, 2026 its legislature quietly decided not to wall the program off. The House Education Committee voted 11-0 to postpone HB26-1292 indefinitely, killing the only bill that would have attached state conditions to Colorado's participation. Introduced February 23, 2026 and titled simply "Scholarship Granting Organizations," the measure carried prime sponsors Rep. Lori Goldstein (D-Westminster) and Sens. Cathy Kipp and Janice Marchman, all Democrats. The committee's roster of action lists the bill's status, plainly, as Lost. With the 2026 session closing without a replacement, Colorado will enter §25F on January 1, 2027 with no state-added SGO or school-eligibility restrictions. What the bill would have done is the substance of the story. HB26-1292 would have required Colorado to include every OBBBA-eligible Scholarship Granting Organization (SGO) on the list it submits to the U.S. Treasury, removing state discretion to omit organizations, while simultaneously imposing nondiscrimination requirements on the private schools that enroll scholarship recipients. Those requirements reached across race, religion, disability, sexual orientation, and gender identity, and the bill folded in disability-law obligations as well. It was, in effect, an attempt to take the federal credit on Colorado's civil-rights terms: list all qualifying SGOs as the statute demands, but condition the schools downstream. Backers included the Colorado Education Association and a set of school districts; opposition came from the Colorado Association of Private Schools and Christian Home Educators of Colorado, the constituencies the conditions would have bound. The decisive opposition, though, came from inside the party. Gov. Jared Polis's office said the bill "would hamstring the state's ability to bring new funding for much-needed services like afterschool programming and tutoring," a notable position given that Polis had been among the earliest Democratic governors to [opt Colorado in back in December 2025](https://eftccredit.com/news/colorado-governor-polis-opts-in-december-2025) and had [publicly defended that decision](https://eftccredit.com/news/colorado-governor-polis-defends-opt-in-may-2026) against anti-discrimination objections days after the committee vote. It is worth not overstating the intent behind the 11-0 motion: sponsor Rep. Goldstein framed the postponement as a decision to wait for finalized federal rules and to gather more stakeholder input, not as a hostile burial. The procedural reality is nonetheless striking. A Democratic-controlled committee unanimously shelved its own party's SGO-restriction bill, leaving Colorado's §25F list unconditioned for the program's launch. The defeat doubles as a data point in the larger [floor-versus-ceiling debate](https://eftccredit.com/news/federal-floor-or-ceiling-25f-state-restrictions-june-2026) over how much authority states actually have. Treasury's November 2025 notice had already indicated that states may lack the power to add SGO requirements beyond what OBBBA sets, the exact question HB26-1292 would have tested in court had it passed. By stepping back to await federal guidance instead, Colorado avoided the collision that [Vermont's H.933 invites](https://eftccredit.com/news/vermont-h933-restrict-25f-opt-in-june-2026), where lawmakers legislated the strings directly. The contrast is the takeaway for donors and prospective SGO operators: the Democratic state furthest into §25F declined to test state guardrails, signaling a cleaner, less encumbered participation path in Colorado. The §25F donor credit remains capped at $1,700 per taxpayer and the program still launches January 1, 2027 regardless of how the state-conditions fight resolves, but where a state lands on guardrails shapes which SGOs can list and which schools can enroll recipients, and Colorado just removed that variable, at least for now. Current status for Colorado and every other state is tracked on our [Colorado state page](https://eftccredit.com/states/colorado) and the [participation map](https://eftccredit.com/states), and operators weighing a launch can review the [SGO directory](https://eftccredit.com/sgos) and [the explainers](https://eftccredit.com/learn). Update, August 11, 2026: HB26-1292 has a second life as an exhibit. Forty-three members of Congress cited the dead bill, and its legislative fiscal note, in a Supreme Court brief arguing that Colorado's approach to its preschool program is becoming a template for excluding religious schools from §25F. The Court has now set that case, St. Mary Catholic Parish v. Roy, for [argument on November 3, 2026](https://eftccredit.com/news/supreme-court-november-3-argument-state-conditions-religious-schools-25f-august-2026). Sources: - Colorado General Assembly: HB26-1292 bill page and action history (postponed indefinitely 04/30/2026, status Lost): https://leg.colorado.gov/bills/HB26-1292 - CPR News: Colorado lawmakers won't pursue bill to place state limits on Trump-backed education tax credit (May 1, 2026): https://www.cpr.org/2026/05/01/colorado-lawmakers-postpone-bill-aimed-at-trump-education-tax-credit/ - Chalkbeat: The education bills that passed and failed during the 2026 Colorado legislative session (May 14, 2026): https://www.chalkbeat.org/colorado/2026/05/14/2026-colorado-legislative-session-education-bills-that-passed-and-failed/ - Ballotpedia News: Colorado Democrats introduce bill with requirements for schools receiving federal scholarship funds (Mar 18, 2026): https://news.ballotpedia.org/2026/03/18/colorado-democrats-introduce-bill-with-requirements-for-schools-receiving-federal-school-choice-tax-credit-scholarship-funds/ Canonical: https://eftccredit.com/news/colorado-house-kills-hb26-1292-sgo-guardrails-april-2026 ### Senate Democrats introduce bill to repeal the federal scholarship tax credit Date: 2026-04-24. Category: federal-action. On April 24, 2026, a group of Senate Democrats introduced legislation to repeal §25F, the federal income tax credit for donations to scholarship granting organizations (SGOs) created by the Educational Choice for Children Act (ECCA) and known to the IRS as the Federal Scholarship Tax Credit (FSTC). The credit was enacted as part of the One Big Beautiful Bill Act (P.L. 119-21, §70411) on July 4, 2025. The repeal effort comes as more than half of U.S. states are weighing whether to opt in to the program, and as the IRS works toward implementing regulations ahead of the program's January 1, 2027 launch. Sponsors of the repeal bill have argued the credit primarily benefits higher-income donors and could divert federal tax revenue toward private and religious schools without sufficient public oversight. Repeal in the current Congress is widely viewed as unlikely without a change in chamber control, given that the program was enacted through budget reconciliation. But the introduction signals that the political fight over the federal scholarship credit is far from settled, and could resurface in future budget cycles or tax legislation. For donors and families, the practical effect for now is unchanged: §25F remains the law, the program is on track to begin January 1, 2027, and state opt-in decisions continue. (In June 2026 House Democrats added a companion repeal bill, making the effort bicameral but not changing those odds; we cover it within [who opposes §25F](https://eftccredit.com/news/who-opposes-25f-unions-democrats-repeal-bill-2026).) For operators, the takeaway is that §25F's legal foundation is solid heading into launch, and the practical work of choosing a state, standing up a Scholarship Granting Organization, and preparing donor receipting can proceed now. We walk through how the credit works in our [explainers](https://eftccredit.com/learn) and track each state's posture on the [participation map](https://eftccredit.com/states). Sources: - Ballotpedia News: Senate Democrats introduce bill to repeal federal education tax credit scholarship: https://news.ballotpedia.org/2026/04/24/senate-democrats-introduce-bill-to-repeal-federal-education-tax-credit-scholarship/ - Cornell LII: 26 U.S.C. §25F: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/senate-democrats-introduce-ecca-repeal-bill-april-2026 ### Oklahoma locks §25F participation into statute: Stitt signs HB 3704, names Tax Commission as SGO administrator Date: 2026-04-17. Category: state-action. State: OK. Oklahoma has written its participation in the federal Education Freedom Tax Credit (§25F) into permanent statute. House Bill 3704, authored by Representative Denise Crosswhite Hader (R-Piedmont) and carried in the Senate by Senator Daniels, declares that the state "hereby elects to participate, to the fullest extent permitted by federal law," in the §25F program. Governor Kevin Stitt (R) approved the bill on April 17, 2026, according to the official Oklahoma Legislature bill tracker, after the measure was sent to his desk on April 16. The Governor's office folded the signing into an April 20 newsroom announcement listing it among twelve bills enacted that week. The federal credit it locks in is a dollar-for-dollar credit of up to $1,700 per individual taxpayer for contributions to scholarship granting organizations, with scholarships limited to households earning no more than 300 percent of county or area median income, and the program takes effect January 1, 2027. The vote margins underscore how settled the question was in Oklahoma. The House passed HB 3704 on March 23, 2026 by 73 to 20, and the Senate followed on April 15, 2026 by 38 to 8. The bill's central mechanical contribution is designating the Oklahoma Tax Commission as the administering agency: the OTC is responsible for identifying and registering eligible scholarship granting organizations and for maintaining the approved list that Oklahoma provides to the U.S. Treasury. The statute pairs that grant of authority with a deliberate limit, barring state agencies, including the Tax Commission and the Governor, from adopting rules beyond what federal law requires. That is a clear signal that Oklahoma wants its §25F framework to track Treasury's national rules rather than layer on state-specific guardrails, an approach we examine in our coverage of whether §25F is a [federal floor or a ceiling on state restrictions](https://eftccredit.com/news/federal-floor-or-ceiling-25f-state-restrictions-june-2026). HB 3704 is best understood as a statutory backstop rather than the first act of participation. Stitt had already initiated Oklahoma's entry into §25F by executive action earlier in 2026; the legislature then converted that choice into law so it no longer depends on a sitting governor's continued cooperation. This is the same durability logic that drove [Idaho to codify its own executive opt-in](https://eftccredit.com/news/idaho-hb-731-codifies-25f-opt-in-march-2026) and that distinguishes statutory participants from the states that came in by governor's pen alone, such as [Virginia](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026) and [Florida](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026). For a program whose viability rests on a state's standing election to the Treasury, putting the election in statute reassures donors and scholarship organizations that Oklahoma is a stable place to build. For scholarship granting organizations, the operative news is that Oklahoma now has a named registrar. Organizations that want to receive §25F contributions in the state will register with the Oklahoma Tax Commission, which compiles and maintains the list submitted to Treasury; final §25F approval authority still runs through the state's election and the federal process, but the OTC is the practical front door for Oklahoma SGOs. Operators evaluating whether to organize in the state can review our [directory of scholarship granting organizations](https://eftccredit.com/sgos) and our [primer on how §25F works](https://eftccredit.com/learn), and those standing up a program from scratch can run intake, scholarship awards, and Treasury-facing reporting on software built specifically for §25F rather than retrofitting general nonprofit tools. Oklahoma joins a fast-growing roster of states locking in their §25F status ahead of the January 1, 2027 launch, a group the IRS began formalizing when it published its [official list of 27 states that filed advance elections](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026). With the $1,700 per-taxpayer cap and the 300 percent income ceiling fixed in federal law, and with Treasury's previewed proposed regulations expected to set the national implementation calendar, the remaining questions in Oklahoma are operational: how quickly the Tax Commission stands up SGO registration and how the approved list reaches Treasury in time for the first credit year. We track Oklahoma's standing and every other state's on the [Oklahoma state page](https://eftccredit.com/states/oklahoma) and the national [participation map](https://eftccredit.com/states). Sources: - Oklahoma Legislature: HB 3704 bill tracker (official history): http://www.oklegislature.gov/BillInfo.aspx?Bill=HB3704&Session=2600 - Oklahoma Governor newsroom: Gov. Stitt signs 12 bills into law (Apr 20, 2026 announcement listing HB 3704): https://oklahoma.gov/governor/newsroom/newsroom/2026/governor-stitt-signs-12-bills-into-law-vetoes-1.html - Oklahoma House: Crosswhite Hader Celebrates Federal Scholarship Tax Credit Becoming Law: https://www.okhouse.gov/posts/news-20260430_2 - OCPA: House votes to lock in Oklahoma's participation in federal school-choice tax credit: https://ocpathink.org/post/independent-journalism/house-votes-to-lock-in-oklahomas-participation-in-federal-school-choice-tax-credit - MuskogeePolitico: With new law, Oklahomans can donate to scholarships under the federal Education Freedom Tax Credit: https://www.muskogeepolitico.com/2026/05/with-new-law-oklahomans-can-donate-to.html Canonical: https://eftccredit.com/news/oklahoma-hb-3704-codifies-25f-tax-commission-administrator-april-2026 ### Arizona Gov. Hobbs vetoes a second FSTC opt-in bill (SB 1142) Date: 2026-04-14. Category: state-action. State: AZ. [Arizona](https://eftccredit.com/states/arizona) Governor Katie Hobbs vetoed SB 1142 on April 14, 2026, blocking a second legislative attempt to opt Arizona into the federal Scholarship Tax Credit (FSTC), the program known to Congress as the Educational Choice for Children Act (ECCA) and codified at IRC §25F. The veto followed her January 16, 2026 veto of SB 1106, the legislature's first opt-in bill of the session. In her veto message, Hobbs tied her objection to Arizona's experience with its own programs. "We have seen what happens when these types of programs lack accountability, transparency, and oversight," she wrote, adding: "I hope the administration ensures any federal school choice program will have the much-needed guardrails Arizona's ESA program lacks." As with her earlier veto, she emphasized that the federal government had not yet released final regulatory guidance. Arizona's repeated vetoes are notable because the state operates one of the country's largest existing state-level scholarship and Empowerment Scholarship Account (ESA) programs and has well-developed [Scholarship Granting Organization (SGO)](https://eftccredit.com/learn/sgo-guide) infrastructure. For now, the vetoes mean Arizona families will not be eligible for FSTC scholarships when the federal program goes live on January 1, 2027, unless the legislature musters a veto override or a future governor reverses course. The FSTC opt-in is an annual decision, a state submits its list of qualifying SGOs to the U.S. Treasury for each participating year. Arizona could revisit participation in a later year, particularly once the IRS finalizes the proposed regulations it signaled in Notice 2025-70. Arizona donors can still claim the federal §25F credit (up to $1,700 per taxpayer) by donating to SGOs in opted-in states, though those scholarships would fund students elsewhere. Sources: - KJZZ: Hobbs vetoes proposal to opt Arizona into tax credit program to fund private school scholarships: https://www.kjzz.org/politics/2026-04-14/hobbs-vetoes-proposal-to-opt-arizona-into-tax-credit-program-to-fund-private-school-scholarships - Office of the Arizona Governor: Legislative Action Update (April 2026): https://azgovernor.gov/office-arizona-governor/news/2026/04/governor-katie-hobbs-legislative-action-update-4 - Ballotpedia: State participation in the federal K-12 education tax credit scholarship program: https://ballotpedia.org/State_participation_in_the_federal_K-12_education_tax_credit_program - Cornell LII: 26 U.S.C. §25F: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/arizona-governor-hobbs-vetoes-second-opt-in-bill-april-2026 ### Kansas legislature overrides Gov. Kelly's veto, opting Kansas into the Federal Scholarship Tax Credit Date: 2026-04-13. Category: state-action. State: KS. The [Kansas](https://eftccredit.com/states/kansas) legislature voted to override Governor Laura Kelly's veto of SB 361 during the April 2026 veto session, opting Kansas into the federal Scholarship Tax Credit (FSTC), the program known to Congress as the Educational Choice for Children Act (ECCA) and codified at IRC §25F. Kelly had vetoed SB 361 on April 8, 2026; the override carried with the Kansas House voting 85-38 and the Kansas Senate voting 29-10. (A separate scholarship bill, HB 2468, was also vetoed by Kelly on April 6 but its override fell short by 8 votes in the House.) In her veto message, Kelly said the federal program "needs to be thoroughly vetted to understand the potential impact on funding for our public schools" and that "if it is, in essence, just another voucher program designed to re-direct taxpayer dollars to private schools to the detriment of our public schools, Kansans have made clear they don't want it." The legislature's supermajority override means Kansas will participate despite the governor's objection. For Kansas families, the practical effect is the same as in any other opted-in state: families at or below 300% of the relevant Area Median Gross Income will be eligible to apply for scholarships through state-designated [Scholarship Granting Organizations (SGOs)](https://eftccredit.com/learn/sgo-guide) once the federal program begins on January 1, 2027. Kansas donors will be able to claim the federal non-refundable income tax credit of up to $1,700 per taxpayer for contributions to a qualifying SGO. Kansas joins Kentucky as the second state where the legislature affirmatively forced participation against the governor's wishes through a supermajority override. The FSTC opt-in is an annual decision: each participating state's governor must submit a list of qualifying SGOs to the U.S. Treasury by January 1 of each participating year, so the path to continued participation in future years will depend on the same legislative or gubernatorial dynamics. Sources: - The Sentinel: Legislature overrides veto of federal tax credit scholarship program: https://sentinelksmo.org/federal-tax-credit-scholarship/ - Ballotpedia News: Kansas and Wisconsin governors veto bills opting their states into federal school choice tax credit program: https://news.ballotpedia.org/2026/04/10/kansas-and-wisconsin-governors-veto-bills-opting-their-states-into-federal-school-choice-tax-credit-program/ - KCUR: Kansas Republicans overrode dozens of Gov. Laura Kelly's vetoes. These bills became law: https://www.kcur.org/politics-elections-and-government/2026-04-15/kansas-republicans-veto-override-laura-kelly-law - Teach Coalition: National Federal Tax Credit Scholarship Tracker: https://teachcoalition.org/federalscholarships/ Canonical: https://eftccredit.com/news/kansas-legislature-overrides-kelly-veto-april-2026 ### New Mexico Rep. Rebecca Dow presses Gov. Lujan Grisham on §25F, and the governor is now ‘actively considering’ Date: 2026-04-02. Category: state-action. State: NM. In late March 2026, New Mexico state Representative Rebecca Dow (R-Elephant Butte / Truth or Consequences) sent a public letter to Democratic Governor Michelle Lujan Grisham urging the state to opt into the federal Education Freedom Tax Credit (§25F), and the appeal appears to have moved the needle. On April 2, 2026, gubernatorial spokesman Michael Coleman told the Albuquerque Journal that the governor "is actively considering whether to opt in but is awaiting more information from the Department of Treasury about the flexibility of the funding." That is a measurable softening: in January 2026 Lujan Grisham was reported among three Democratic governors, alongside Oregon's Tina Kotek and Wisconsin's Tony Evers, who said they would not participate. The shift from a flat refusal to active consideration is the news here. Dow's letter, first reported by Source New Mexico on March 31, argued that scholarship-granting organizations serve students "regardless of what type of school they attend," framing the program as "not about shifting students from one system to another" but "about ensuring that every child has access to the same kinds of opportunities and resources." It is worth being precise about what has and has not happened. This is a public letter from a legislator plus a spokesman's statement of deliberation, not an executive order, a statute, a veto, or an IRS advance election. New Mexico has not opted in, and no status-changing action has occurred. What §25F actually offers, once a state participates, is a dollar-for-dollar federal tax credit of up to $1,700 per taxpayer for donations to qualified scholarship-granting organizations (SGOs). Those SGOs then award scholarships to families earning up to 300% of area median income. The credit was created in the One Big Beautiful Bill Act signed in July 2025, and its defining feature is that it only functions in states that affirmatively opt in. New Mexico is currently among the states that have not, which is why Dow's pressure campaign and the governor's posture both matter. For donors and prospective SGO operators in New Mexico, the practical reality for now is that the state is non-participating, so New Mexico taxpayers cannot yet route §25F-eligible donations to in-state organizations. The governor's stated sticking point, Treasury guidance on "the flexibility of the funding," is the kind of administrative detail that has kept several Democratic-led states in a holding pattern, a dynamic we track in our coverage of how [Democratic governors are splitting on §25F](https://eftccredit.com/news/democratic-governors-split-on-25f-2026). It contrasts with early movers like Virginia, where [Glenn Youngkin made his state the first to opt in](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), and with later Democratic adopters such as [New York under Gov. Kathy Hochul](https://eftccredit.com/news/new-york-governor-hochul-opts-in-may-2026), which shows the partisan line is not absolute. New Mexico's current status, and every other state's, is tracked on our [New Mexico state page](https://eftccredit.com/states/new-mexico) and the [national participation map](https://eftccredit.com/states). Operators thinking about standing up one of New Mexico's first SGOs, so the infrastructure exists if and when the state elects in, can review how the organizations work in our [explainers](https://eftccredit.com/learn) and see the current national landscape in the [SGO directory](https://eftccredit.com/sgos). The back-office work of donor intake, eligibility verification against the area-median-income threshold, and scholarship disbursement can be run on software built specifically for §25F, which lets a small team be ready to operate the moment a state's election takes effect rather than scrambling afterward. The forward question is whether the Treasury information Lujan Grisham is waiting on, paired with continued legislative pressure from Dow and others, converts "actively considering" into an actual opt-in before the program goes live. New Mexico also has a 2026 election cycle ahead, which means the decision could ultimately fall to the current governor or her successor. For now the signal is directional rather than decisive: a Republican lawmaker's letter has pulled a Democratic governor from refusal to deliberation, and whether that becomes a federal advance election with the IRS is the measure that will matter. Sources: - Albuquerque Journal: Governor still weighing New Mexico's participation in federal education tax credit program (Apr. 2, 2026): https://www.abqjournal.com/news/governor-still-weighing-new-mexicos-participation-in-federal-education-tax-credit-program/3014488 - Source New Mexico: NM Republican lawmaker urges Gov. Lujan Grisham to opt in to federal education tax credit program (Mar. 31, 2026): https://sourcenm.com/2026/03/31/nm-republican-lawmaker-urges-gov-lujan-grisham-to-opt-in-to-federal-education-tax-credit-program/ - News From The States: NM Republican lawmaker urges Gov. Lujan Grisham to opt in (mirror of Source NM): https://www.newsfromthestates.com/article/nm-republican-lawmaker-urges-gov-lujan-grisham-opt-federal-education-tax-credit-program - Wikipedia: Federal Education Freedom Tax Credit Program (§25F mechanics: $1,700, dollar-for-dollar, 300% AMI, opt-in): https://en.wikipedia.org/wiki/Federal_Education_Freedom_Tax_Credit_Program Canonical: https://eftccredit.com/news/dow-presses-lujan-grisham-new-mexico-25f-april-2026 ### Wisconsin Gov. Evers vetoes FSTC / ECCA opt-in bill (AB 602) Date: 2026-03-30. Category: state-action. State: WI. [Wisconsin](https://eftccredit.com/states/wisconsin) Governor Tony Evers vetoed Assembly Bill 602 on March 30, 2026, blocking Wisconsin's participation in the Federal Scholarship Tax Credit (FSTC), the program known to Congress as the Educational Choice for Children Act (ECCA) and codified at IRC §25F. AB 602 would have required the state to opt in annually by submitting a qualifying [Scholarship Granting Organization (SGO)](https://eftccredit.com/learn/sgo-guide) list to the U.S. Treasury. In his veto message, Evers said the federal program "has no student achievement metrics, no school accountability measures, no minimum or maximum scholarship size, no certain end date, and no cap on how much the federal government can spend." He also pointed to the unfinished federal rulemaking process and the funding pressures on Wisconsin's public schools, writing that public school districts "continue to endure capped and prorated state funding, strict revenue limits, and the need to go to referenda in many cases just to keep up with inflationary pressures." Without an opt-in or a legislative veto override, no SGOs in Wisconsin will be designated for the program's January 1, 2027 launch, and Wisconsin families will not be eligible for FSTC scholarships in 2027. Wisconsin donors can still claim the federal §25F credit (up to $1,700 per taxpayer) by donating to SGOs in opted-in states, but those scholarships will fund students in other states rather than in Wisconsin. The FSTC opt-in is an annual decision. A future legislature, a future governor, or a veto override in the current session could change Wisconsin's status in any subsequent year. The program itself was enacted as Section 70411 of the One Big Beautiful Bill Act (P.L. 119-21) and remains in effect until repealed. Sources: - Wisconsin Examiner: Gov. Tony Evers vetoes Wisconsin participation in federal school choice tax credit program: https://wisconsinexaminer.com/2026/03/30/gov-tony-evers-vetoes-wisconsin-participation-in-federal-school-choice-tax-credit-program/ - WPR: Evers vetoes bill to join federal tax credit program, citing concerns over expansion of school vouchers: https://www.wpr.org/news/wisconsin-evers-vetoes-bill-federal-expansion-private-voucher-schools - Ballotpedia News: Kansas and Wisconsin governors veto bills opting their states into federal school choice tax credit program: https://news.ballotpedia.org/2026/04/10/kansas-and-wisconsin-governors-veto-bills-opting-their-states-into-federal-school-choice-tax-credit-program/ - Wisconsin AB 602 (2025-2026 Regular Session) on LegiScan: https://legiscan.com/WI/bill/AB602/2025 Canonical: https://eftccredit.com/news/wisconsin-governor-evers-vetoes-fstc-opt-in-march-2026 ### Education Secretary McMahon visits Hamtramck charter school to press Whitmer to opt Michigan into §25F Date: 2026-03-27. Category: state-action. State: MI. Update, October 1, 2026: whether §25F scholarships can pay for homeschooling is not settled. Treasury's proposed regulations define a school as one providing K-12 education as determined under state law and leave the meaning of school and the full expense list to separate section 530 guidance that has not been issued; Treasury's own fact sheet describes expenses tied to a public, private (including religious), or charter school. [Our read of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026). On March 27, 2026, U.S. Secretary of Education Linda McMahon traveled to Hamtramck Academy, a charter school of roughly 550 students in Hamtramck, Michigan, to publicly press Democratic Governor Gretchen Whitmer to opt the state into the federal Education Freedom Tax Credit (§25F). The program, which becomes available January 1, 2027, lets taxpayers claim a dollar-for-dollar federal credit of up to $1,700 per taxpayer for donations to qualified Scholarship Granting Organizations, with scholarships flowing to households earning up to 300% of area median gross income and usable across public, private, religious, and homeschool options. McMahon was joined by Republican Michigan House Speaker Matt Hall (R-Richland Township) and several Republican state legislators, including Tim Kelly, Matt Maddock, Alicia St. Germaine, Joseph Pavlov, and Mike Harris. Importantly, this was a federal-official advocacy visit, not a state action: Michigan has not opted in, and no signing, executive order, statute, or IRS advance election occurred. The mechanism McMahon emphasized is the one that makes §25F a state-by-state contest. The credit is federal, but it only functions in states whose governors (or legislatures) make an advance election to participate, after which qualified SGOs in that state can receive credit-eligible donations and award scholarships. McMahon's central warning was about that geography of money: if Michigan does not opt in, donations from Michigan taxpayers would not stay home but would instead flow to SGOs in states that have already joined, funding scholarships for families elsewhere. She asserted that 27 states had already opted in as of late March, a figure that is her own characterization rather than a confirmed IRS or Treasury count, and one worth treating as an attributed claim until the federal government publishes an [official list of participating states](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026). The credit cap of $1,700 applies per donor on the federal credit, not as a ceiling on what any single scholarship can be worth. Whitmer's office did not move. It held to an awaiting-federal-guidance posture, having previously described the program as a "high-level talking point" that needed more information before the state could evaluate it. That cautious stance places Michigan among the Democratic-led states still weighing whether to participate, a split we track in our coverage of how [Democratic governors are dividing on §25F](https://eftccredit.com/news/democratic-governors-split-on-25f-2026). It stands in contrast to early movers like Virginia, where [Glenn Youngkin made his state the first to opt in](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), and to [New York under Gov. Kathy Hochul](https://eftccredit.com/news/new-york-governor-hochul-opts-in-may-2026). Three days later, on March 30, Speaker Hall publicly renewed the call, framing participation as a literacy and educational-support benefit for Michigan families and repeating the warning that the state would forfeit tax benefits to other states by sitting out. For donors and prospective SGO founders, the practical takeaway is that Michigan remains a non-participating state for now, which means Michigan taxpayers cannot yet route §25F-eligible donations to in-state organizations. Michigan's current status, and every other state's, is tracked on our [Michigan state page](https://eftccredit.com/states/michigan) and the [national participation map](https://eftccredit.com/states). Operators thinking about standing up one of Michigan's first SGOs (so the infrastructure exists if and when the state elects in) can review how the organizations work in our [explainers](https://eftccredit.com/learn) and see the current landscape in the [SGO directory](https://eftccredit.com/sgos); the back-office work of intake, eligibility checks, and scholarship disbursement can be run on software built specifically for §25F. The forward question is whether sustained federal and legislative pressure changes Whitmer's calculus before the 2027 launch. With the program opening January 1, 2027 and a 2026 election cycle in between, Michigan's decision could fall to either the current administration or its successor, and the longer the state waits, the longer Michigan donors will have credit-eligible dollars with nowhere in-state to send them. Whether McMahon's visit marks the start of a real opt-in push or a one-day photo opportunity will be measured by whether Michigan ever files an advance election with the IRS. Sources: - Chalkbeat Detroit: Michigan education secretary Linda McMahon promotes federal tax scholarship (Mar. 27, 2026): https://www.chalkbeat.org/detroit/2026/03/27/michigan-education-secretary-linda-mcmahon-promotes-federal-tax-scholarship/ - WNEM: Speaker Hall urges Whitmer to join federal education tax credit program (Mar. 30, 2026): https://www.wnem.com/2026/03/30/speaker-hall-urges-whitmer-join-federal-education-tax-credit-program/ - The Detroit News: Whitmer urged by Trump education secretary McMahon to join K-12 tax credit plan (Mar. 27, 2026): https://www.detroitnews.com/story/news/politics/2026/03/27/gov-gretchen-whitmer-urged-trump-education-secretary-linda-mcmahon-join-k-12-tax-credit-plan/89330986007/ - Michigan Advance: U.S. Education Secretary McMahon says Michigan should join Trump's school tax credit plan (Mar. 27, 2026): https://michiganadvance.com/2026/03/27/u-s-education-secretary-mcmahon-says-michigan-should-join-trumps-school-tax-credit-plan/ - CBS News Detroit: Will Michigan join the Education Freedom Tax Credit? McMahon visits Hamtramck (Mar. 27, 2026): https://www.cbsnews.com/detroit/news/education-fredom-tax-credit-mcmahon-hamtramck/ Canonical: https://eftccredit.com/news/mcmahon-presses-whitmer-michigan-opt-in-25f-march-2026 ### Minnesota Gov. Walz declines to opt Minnesota into the Federal Scholarship Tax Credit Date: 2026-03-24. Category: state-action. State: MN. [Minnesota](https://eftccredit.com/states/minnesota) Governor Tim Walz said on March 24, 2026 that opting Minnesota into the federal Scholarship Tax Credit (FSTC) is "never going to happen." FSTC is the program known to Congress as the Educational Choice for Children Act (ECCA) and codified at IRC §25F. Without an opt-in, Minnesota will not designate [Scholarship Granting Organizations (SGOs)](https://eftccredit.com/learn/sgo-guide), and Minnesota families will not be eligible for FSTC scholarships when the program goes live on January 1, 2027. Walz's stance has been controversial in part because of how he framed it in earlier budget work. His supplemental budget proposal earlier in the 2026 session would have ended Minnesota's longstanding state nonpublic pupil aid and pupil transportation aid programs if Minnesota opted into the federal credit, an unusual structure given that the federal opt-in itself imposes no fiscal cost on the state. Critics pointed out that the federal credit redirects federal income tax that would otherwise go to the U.S. Treasury, rather than drawing down state revenue. For Minnesota donors and families, the practical effect is the same as in other declined or vetoed states: Minnesota residents can still claim the federal §25F credit (up to $1,700 per taxpayer) by donating to SGOs in opted-in states, but those scholarships will fund K-12 students in other states rather than in Minnesota. Eligible students under §25F are those in households at or below 300% of the relevant Area Median Gross Income. The FSTC opt-in is annual. Each participating state's governor must submit a list of qualifying SGOs to the U.S. Treasury by January 1 of each participating year, so Minnesota's status could change in a future year under the same governor or a successor. As of May 2026, with New York's announcement, roughly 30 states have moved toward participation, leaving Minnesota as one of a small group of states that have explicitly declined. Sources: - MPR News: 'Never going to happen', Walz says he won't opt Minn. into federal tax change: https://www.mprnews.org/story/2026/03/24/walz-wont-opt-minnesota-into-federal-education-tax-change - MPR News: Proposed federal tax credit risks hanging up education debate at MN Capitol: https://www.mprnews.org/story/2026/03/11/proposed-federal-tax-credit-risks-hanging-up-education-debate-at-mn-capitol - American Experiment: New York joins federal tax-credit scholarship, Minnesota becomes stark outlier: https://www.americanexperiment.org/new-york-joins-federal-tax-credit-scholarship-minnesota-becomes-stark-outlier - Teach Coalition: National Federal Tax Credit Scholarship Tracker: https://teachcoalition.org/federalscholarships/ - Cornell LII: 26 U.S.C. §25F: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/minnesota-governor-walz-declines-fstc-march-2026 ### Idaho writes its §25F opt-in into permanent statute: HB 731 takes effect July 1, 2026 Date: 2026-03-19. Category: state-action. State: ID. Update, October 1, 2026: under Treasury's temporary regulations, a state's election covers a single calendar year, so Idaho has to make it, and submit its SGO list, for each year it takes part. For each year after 2027, the list is due between October 1 and January 1, and a state may file an advance election earlier, between January 2 and September 30 of the year before. [The §25F calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). Idaho has done something no other state had done at the time of writing: it opted into the federal Scholarship Tax Credit (FSTC / ECCA / §25F) by executive order, then turned around and locked that choice into permanent statute. House Bill 731, titled "EDUCATION - Adds to existing law to provide for the State of Idaho to elect to participate in the federal tax credit scholarship program," was signed by Governor Brad Little on March 19, 2026 as Session Law Chapter 72, and its effective date is July 1, 2026. The statute makes Idaho's participation a fixture of state law rather than a policy that survives only as long as a governor's signature on an executive order, and it lands just as the program prepares for its January 1, 2027 launch and its $1,700 donor credit cap. The vote totals are the headline. The Idaho House passed HB 731 on February 24, 2026 by a margin of 68-0-2, and the Senate followed on March 12, 2026 by 30-5-0. Outside of the handful of senators recorded against it, the bill drew essentially no organized opposition, a striking contrast to the bitter, party-line fights and veto showdowns that have defined §25F adoption in other states. The codification was deliberate: HB 731 was written to make participation permanent precisely because an executive order can expire, while a statute remains on the books until the legislature repeals it. For a program that depends on a state's standing election to the U.S. Treasury, that durability matters to the donors and Scholarship Granting Organizations deciding whether Idaho is a stable place to build. HB 731 did not start the clock; it secured it. Idaho's path began earlier in the year when Governor Little issued Executive Order 2026-03 on February 16, 2026, opting the state into the federal scholarship tax credit program created under the One Big Beautiful Bill Act and directing the Idaho State Department of Education to implement it. The legislature then converted that executive action into law over the following month. The statute itself addresses how Idaho carries out its election, including the state's coordination with the U.S. Treasury and the handling of qualified scholarship organizations operating in Idaho, though the precise operational mechanics will be settled as the State Department of Education stands up the program ahead of the 2027 launch. The earlier [IRS Form 15714 advance-election process](https://eftccredit.com/news/irs-form-15714-advance-election-december-2025) gave states a way to signal participation before the rules were final; Idaho has now gone considerably further than a preliminary signal. What Idaho documents is a fourth distinct route into §25F. Virginia and Florida came in by governor's pen alone. [Kentucky, Kansas, and North Carolina arrived through legislative veto overrides](https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026), forcing the program in over a hostile governor's objection. Idaho inverts that sequence entirely: a Republican governor opted in by executive order, and then a near-unanimous, bipartisan legislature codified the choice into permanent statute, removing any future dependence on the executive's continued cooperation. The timing is also notable, because the July 1 effective date arrives just as Treasury's previewed proposed §25F regulations, expected by the end of September 2026, begin to set the national implementation calendar. We track Idaho's standing and every other state's on the [Idaho state page](https://eftccredit.com/states/idaho) and the [participation map](https://eftccredit.com/states); founders weighing where to organize can review our [directory of scholarship-granting organizations](https://eftccredit.com/sgos) and the [primer on how §25F works](https://eftccredit.com/learn). Sources: - Idaho State Legislature: House Bill 731 (2026) full status history: https://legislature.idaho.gov/sessioninfo/2026/legislation/H0731/ - Office of the Governor: Gov. Little executive order opting Idaho into the federal scholarship tax credit program (EO 2026-03): https://gov.idaho.gov/pressrelease/gov-little-expands-education-freedom-issues-executive-order-opting-into-federal-scholarship-tax-credit-program/ - Idaho Freedom: House Bill 731 analysis (federal scholarship opt-in): https://idahofreedom.org/house-bill-731-federal-scholarship-opt-in-0/ Canonical: https://eftccredit.com/news/idaho-hb-731-codifies-25f-opt-in-march-2026 ### A New Jersey bill would order the state into §25F outright: A4777 turns the opt-in from a governor's choice into a statutory mandate Date: 2026-03-19. Category: state-action. State: NJ. New Jersey has not joined the federal Education Freedom Tax Credit (FSTC / ECCA / §25F), and its governor has not said whether it will. A bill introduced in the Assembly on March 19, 2026 would settle the question by statute rather than wait for the governor to decide. A4777, sponsored by Assemblymen Michael Inganamort and Gerry Scharfenberger and Assemblywoman Dawn Fantasia, is titled "An Act requiring the State to participate in the federal tax credit program for individual contributions to scholarship granting organizations." Its operative language is blunt: "The State of New Jersey shall participate" in the §25F program for all taxable years beginning after December 31, 2026, and the Commissioner of Education "shall annually provide" the U.S. Secretary of the Treasury the information federal law requires, including a roster of eligible Scholarship Granting Organizations (SGOs) operating in the state. That is a stronger instrument than the pressure measures other states have used. Where California's [ACR-229](https://eftccredit.com/news/california-acr229-hoover-urges-newsom-opt-in-25f-june-2026) and Washington's [HJM 4013](https://eftccredit.com/news/washington-hjm-4013-urges-ferguson-opt-in-25f-january-2026) are non-binding resolutions that merely urge a governor to act, A4777 is a substantive bill that would place an affirmative duty to participate directly into New Jersey statute and assign the administrative job to the Department of Education. The catch is arithmetic: its three sponsors are Republicans in a Legislature that Democrats control, and the bill was referred to committee, where measures without majority support routinely sit without a hearing. As a practical matter it is unlikely to reach the floor this session. What it does accomplish is to convert New Jersey's opt-in question from an abstraction into concrete statutory text, on the record, with a specific mechanism attached. New Jersey's actual status is unchanged. Gov. Mikie Sherrill, who took office in January 2026, has been [noncommittal, saying the state will evaluate the program](https://eftccredit.com/news/new-jersey-sherrill-noncommittal-25f-evaluate-may-2026), and New Jersey has neither filed the IRS advance election (Form 15714) nor submitted a list of Scholarship Granting Organizations. The opt-in decision is annual, so nothing about this bill's likely stall forecloses a later yes: a governor who does not act for 2027 can still elect in for 2028 or any subsequent year. But for now New Jersey sits among the pending states, and every year it stays out, its residents' credit-eligible dollars flow to SGOs in states that have opted in rather than to children at home. The stakes in New Jersey are unusually large because of who the credit would reach. The state has one of the country's biggest nonpublic-school enrollments, heavily Catholic and independent, precisely the low- and middle-income families §25F is built around (eligibility runs to households at or below 300% of area median income). That is the same argument that has moved governors of both parties elsewhere: §25F does not spend New Jersey's own money. It lets New Jersey taxpayers redirect federal tax they would otherwise owe into scholarships for local students, which reframes the decision as less an ideological stance than a choice about whether to leave a large sum unclaimed. Where the broader field of Democratic governors has landed is tracked in our coverage of how [Democratic governors have split on §25F](https://eftccredit.com/news/democratic-governors-split-on-25f-2026). For anyone weighing whether to build a New Jersey SGO, A4777 is a signal rather than a green light: it shows the opt-in has legislative backers even if the votes are not there yet, while the actual decision still rests with a governor who has not tipped her hand. New Jersey's scale is the reason to be ready rather than to wait, because if the state ever files its election the demand for scholarship capacity would be substantial from day one. Founders can track New Jersey's status and every other state's on our [New Jersey state page](https://eftccredit.com/states/new-jersey) and the [national participation map](https://eftccredit.com/states), see the field already forming in the [SGO directory](https://eftccredit.com/sgos), and use our [guide to starting an SGO](https://eftccredit.com/learn/how-to-start-an-sgo) to build the pieces that do not depend on any one governor's decision. Sources: - New Jersey Legislature: A4777, An Act requiring the State to participate in the federal tax credit program for contributions to scholarship granting organizations (introduced March 19, 2026): https://pub.njleg.gov/Bills/2026/A5000/4777_I1.HTM - 26 U.S.C. §25F (federal Education Freedom Tax Credit): https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/new-jersey-a4777-inganamort-requires-25f-participation-march-2026 ### Hawaii lawmakers press Gov. Green to reverse course: four resolutions urge him to reconsider declining §25F Date: 2026-03-19. Category: state-action. State: HI. Hawaii is one of a small group of states whose governor has said no to the federal Education Freedom Tax Credit (FSTC / ECCA / §25F), and in March 2026 its own legislature pushed back. Between March 12 and March 19, lawmakers introduced four measures carrying the same title, "Urging the Governor to Reconsider His Decision Not to Allow Hawaii to Participate in the Federal Education Freedom Tax Credit Program." Two came from the House (HR68 and HCR74) and two from the Senate (SR148 and SCR158). The House measures were referred to the Education and Finance committees, the Senate measures to Education and Ways and Means. Their shared premise is stated in the title: Gov. Josh Green had already decided against making Hawaii's advance election, and a bloc of legislators wanted that decision revisited before the program's January 1, 2027 launch. It is worth being precise about what these resolutions are and are not. A resolution expresses the will of one or both chambers; it does not change law and cannot compel the governor to file anything. As of their last action all four had been referred to committee, the earliest stage, and none carried the force of a statute directing an opt-in. What they accomplish, regardless of whether they advance, is to put Hawaii's opt-in question on the official legislative record and to signal that the governor's "no" is contested inside his own party's legislature rather than settled. Hawaii's status on the map is unchanged by the resolutions themselves: Green declined to make the 2027 advance election, and the state has not filed Form 15714 or submitted a list of Scholarship Granting Organizations to Treasury. But the decision is not permanent. The §25F election is annual, so a governor who declines for 2027 can still elect in for 2028 or any later year. Hawaii is not alone in this posture; we have tracked how Hawaii, New Mexico, and Oregon have all been [reported to be reconsidering](https://eftccredit.com/news/declined-states-reconsidering-hawaii-new-mexico-oregon-may-2026), and where the broader field of Democratic governors has landed in our look at how [Democratic governors have split on §25F](https://eftccredit.com/news/democratic-governors-split-on-25f-2026). The through-line is the argument that has moved governors across the spectrum: §25F does not spend a state's own money, it lets residents redirect federal tax they would otherwise owe into scholarships for local children. For anyone weighing whether to build a Hawaii SGO, the practical signal is that the opt-in question is live rather than closed, even with the governor's position unmoved for now. Nothing about these resolutions changes what an operator can do today, and almost everything an SGO needs, its 501(c)(3) determination, a segregated account, a donor pipeline, can be assembled independent of any one governor's decision. Founders can track Hawaii's status and every other state's on our [Hawaii state page](https://eftccredit.com/states/hawaii) and the [national participation map](https://eftccredit.com/states), see the field already forming in the [SGO directory](https://eftccredit.com/sgos), and use our [guide to starting an SGO](https://eftccredit.com/learn/how-to-start-an-sgo) to build the pieces that do not depend on the statehouse. If Hawaii ever files its election, the operators who prepared during the wait are the ones ready to serve families on day one. Sources: - Hawaii State Legislature: HR68, Urging the Governor to Reconsider His Decision Not to Allow Hawaii to Participate in the Federal Education Freedom Tax Credit Program (2026): https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=HR&billnumber=68&year=2026 - Hawaii State Legislature: HCR74 (companion House concurrent resolution, 2026): https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=HCR&billnumber=74&year=2026 - Hawaii State Legislature: SR148 (Senate resolution, 2026): https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SR&billnumber=148&year=2026 - Hawaii State Legislature: SCR158 (Senate concurrent resolution, 2026): https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SCR&billnumber=158&year=2026 - 26 U.S.C. §25F (federal Education Freedom Tax Credit): https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/hawaii-legislature-urges-green-reconsider-25f-march-2026 ### Kentucky legislature overrides Gov. Beshear's veto of FSTC opt-in bill Date: 2026-03-17. Category: state-action. State: KY. On March 17, 2026, the [Kentucky](https://eftccredit.com/states/kentucky) legislature completed its override of Governor Andy Beshear's veto of HB 1, the state's bill to opt in to the Federal Scholarship Tax Credit (FSTC) program. Beshear vetoed the bill on March 13; the House overrode him 77-14 on March 16 and the Senate followed 31-5 on March 17, the day the act was delivered to the Secretary of State. The override means Kentucky will participate in the FSTC, the federal program known as the Educational Choice for Children Act (ECCA) and codified at IRC §25F, beginning when the program launches on January 1, 2027. Kentucky's path to participation is unusual: most opt-in states have either had governors actively support the program or had governors and legislatures aligned. Kentucky is one of a handful of states where the legislature affirmatively forced participation against the governor's wishes through a supermajority override. For Kentucky families, the practical effect is the same as in any other opted-in state: families at or below 300% of Area Median Gross Income will be eligible to apply for scholarships through state-designated [Scholarship Granting Organizations (SGOs)](https://eftccredit.com/learn/sgo-guide) once the program goes live in 2027. Whether Kentucky stays opted in long-term depends on future legislative cycles and gubernatorial decisions. The FSTC opt-in is annual; participation must be re-certified each January 1 by submitting an SGO list to the U.S. Treasury. Sources: - Ballotpedia News: Kansas and Wisconsin governors veto bills opting their states into federal school choice tax credit program (also covers Kentucky override): https://news.ballotpedia.org/2026/04/10/kansas-and-wisconsin-governors-veto-bills-opting-their-states-into-federal-school-choice-tax-credit-program/ - Teach Coalition: National Federal Tax Credit Scholarship Tracker: https://teachcoalition.org/federalscholarships/ Canonical: https://eftccredit.com/news/kentucky-legislature-overrides-beshear-veto-march-2026 ### In Kentucky, the official who decides which SGOs qualify is not the governor. It is the Secretary of State. Date: 2026-03-17. Category: state-action. State: KY. When a state joins the federal Education Freedom Tax Credit (FSTC / ECCA / §25F), someone inside state government has to run it: file the advance election with the U.S. Treasury, certify which Scholarship Granting Organizations (SGOs) qualify, submit that list to the IRS, and keep it current every year. In most states that job sits with the governor or the department of revenue. Kentucky put it somewhere unusual. House Bill 1, the 2026 act that opted Kentucky in, assigns the entire function to the Secretary of State, currently Michael Adams, and it codifies the program inside KRS Chapter 14, the chapter that governs the Secretary of State's office. For any organization that wants to operate as a Kentucky SGO, that is the single most important administrative fact about the state: the office you answer to is not the one most people would guess. The choice was structural, not incidental, and the veto fight explains it. Kentucky reached §25F the hard way, over Gov. Andy Beshear's objection: Beshear vetoed HB 1 on March 13, 2026, the House overrode him on March 16, and the Senate completed the [veto override](https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026) on March 17, making the bill law that day. A legislature that has just forced a program past a hostile governor has an obvious problem, the same governor's executive branch would normally administer it. Routing the annual election and the SGO list through the independently elected Secretary of State, rather than a department the governor controls, is the legislature's answer: it insulates Kentucky's participation from a chief executive who fought it, and removes any future governor's ability to quietly stall the paperwork the law now requires. The statute is specific about what the office must do. The Secretary of State is the sole official authorized to report Kentucky's election to the U.S. Secretary of the Treasury and to submit the state's list of qualifying SGOs, and the list must go to Treasury by January 1 of each year. The office is directed to publish administrative regulations and guidance on a website, is empowered to promulgate those regulations, and may collect a fee from SGOs (and accept private contributions) to cover the program's costs. That fee, set by regulation rather than fixed in the statute, is the one distinctly Kentucky requirement an SGO should budget for; beyond it, the enacted law layers nothing onto the federal §25F eligibility rules. For anyone building an SGO, this is the practical scaffolding the whole program runs on, and Kentucky is a useful illustration of a question every participating state has to answer: which officer owns the list. It is the same question [West Virginia left unresolved when HB 4588 stalled](https://eftccredit.com/news/west-virginia-hb-4588-treasurer-25f-stalls-conference-march-2026) and the state adjourned without designating an administrator. Kentucky answered it cleanly and early, and named an office structurally shielded from the governor. Operators eyeing Kentucky should plan around the Secretary of State's forthcoming regulations and administrative fee, and watch that office, not the governor's, for the application process. Update: on July 22, 2026, Secretary of State Adams did exactly that, [completing Kentucky's federal election and filing the regulation that opens the SGO declaration process](https://eftccredit.com/news/kentucky-adams-files-federal-25f-opens-sgo-declaration-july-2026). One caveat keeps Kentucky in the same boat as everyone else on timing: naming the administrator is not the same as opening the door. As of mid-2026 no state, Kentucky included, has actually opened SGO certification, because the mechanics are gated on Treasury's proposed regulations expected at the end of September, a hold we cover in [our piece on why SGO certification has not opened anywhere](https://eftccredit.com/news/no-state-opened-sgo-certification-waiting-september-nprm-july-2026). What Kentucky has settled is the who and the where; the when still runs on the federal clock. Kentucky's status is tracked on our [Kentucky state page](https://eftccredit.com/states/kentucky) and the [national participation map](https://eftccredit.com/states), and founders weighing a Kentucky program can start with our [guide to starting an SGO](https://eftccredit.com/learn/how-to-start-an-sgo) and the [SGO directory](https://eftccredit.com/sgos). Sources: - Kentucky Legislative Research Commission: HB 1 (2026 RS) bill record and summary: https://apps.legislature.ky.gov/record/26RS/hb1.html - Kentucky Acts Chapter 4 (2026 RS): enacted text of HB 1 (Secretary of State submits the SGO list and collects an administrative fee; no in-state office mandate in the enacted law): https://apps.legislature.ky.gov/law/acts/26RS/documents/0004.pdf Canonical: https://eftccredit.com/news/kentucky-sgo-registry-secretary-of-state-adams-hb1-march-2026 ### West Virginia's HB 4588 would put the State Treasurer in charge of §25F: it passed both chambers, then stalled in conference Date: 2026-03-14. Category: state-action. State: WV. West Virginia came within one procedural step of designating the office that would carry out the federal Scholarship Tax Credit (FSTC / ECCA / §25F) inside the state, and then ran out of clock. House Bill 4588, titled "relating to participating in the federal tax credit scholarship program," adds a new Article 31A, "The Federal Tax Credit Scholarship Program," to Chapter 18 of the state code (sections 18-31A-1 through 18-31A-6). Lead sponsor Del. Adam Burkhammer (R-District 64) and his co-sponsors wrote the bill to direct the West Virginia State Treasurer to participate in the federal credit established under section 70411 of Public Law No. 119-21, the §25F provision enacted in the One Big Beautiful Bill Act. The House passed it on March 4, 2026 (Roll No. 288) and the Senate passed it on March 13, 2026 (Roll No. 539), but the two chambers split over the Senate's amendments, and the bill went to a conference committee on March 14, the session's sine die adjournment date, with no recorded final passage or signature. The mechanism HB 4588 sets up is administrative, not fiscal. Rather than creating a state tax credit or making a discretionary opt-in election, the bill designates the State Treasurer as the office responsible for the program: under section 18-31A-1, the Treasurer would participate in the federal credit under section 70411, accept applications from scholarship granting organizations on a year-round basis, and by December 1 of each year submit to the U.S. Secretary of the Treasury and publish on the Treasurer's website a list of qualified SGOs and schools. The bill text itself never uses the label "§25F" or cites the $1,700 donor credit cap; those are the federal framing around the program it points to. What West Virginia was deciding here was which state officer maintains the qualified-SGO list that Treasury relies on, a question of plumbing that determines how smoothly donors and organizations can actually use the credit once it launches on January 1, 2027. For SGOs and donors, that designation question is not academic. The federal program runs on each state's list of qualified scholarship granting organizations, and an organization cannot receive credit-eligible donations in a state until it appears on the list that state submits to Treasury. HB 4588 would have given West Virginia a clear owner for that process, the Treasurer's office, with a year-round application window and a fixed December 1 publication deadline, so operators would know exactly where to apply and when the roster is finalized. Founders weighing whether to organize in West Virginia can track the state's status on our [West Virginia state page](https://eftccredit.com/states/west-virginia) and against the national [participation map](https://eftccredit.com/states), review who is already operating in our [directory of scholarship granting organizations](https://eftccredit.com/sgos), and start with the [primer on how §25F works](https://eftccredit.com/learn). Operators who do clear a state list still need to run the program day to day, and §25F-native software handles the donor receipts, allocation, and reporting the credit requires. A note of caution on the margins: the official action history confirms the roll-call numbers and that both chambers passed the bill, and contemporaneous accounts described unanimous votes (93-0 in the House, 33-0 in the Senate), but those numeric tallies should be read against the roll-call sheets before being treated as settled. What is not in doubt is how the bill died. On March 14 the House refused to concur in the Senate amendments, and the measure went to conference, with Senators Rucker, Roberts, and Woelfel and Delegates Criss, Gearheart, and Williams named as conferees, before the session adjourned without a final vote. A Senate companion, SB 644 from Sen. Patricia Rucker (R-District 16), carried identical State Treasurer, section 70411, and December 1 language and met the same end. It is worth being precise about what HB 4588's failure did and did not do, because West Virginia's participation in the federal credit does not actually hinge on this bill. The state made the advance election separately, by executive action, and West Virginia appears on the IRS's [official list of states that have elected in](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026). What HB 4588 would have settled is narrower but still consequential: which state officer owns and publishes the qualified-SGO list once the program runs. Virginia and Florida opted in by a governor's pen, and [Kentucky, Kansas, and North Carolina forced the program through over their governors' vetoes](https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026); West Virginia is in, but it adjourned without designating the Treasurer, or any office, as the administrator of its SGO roster. That single-officer, annual-cycle structure is the kind of administrative scaffolding nearly every participating state will need, so expect West Virginia lawmakers to bring the Treasurer-designation language back when they reconvene. We will track it on the [West Virginia page](https://eftccredit.com/states/west-virginia) when they do. Sources: - WV HB 4588 (2026 RS) introduced bill text PDF: https://www.wvlegislature.gov/Bill_Text_HTML/2026_SESSIONS/RS/bills/hb4588%20intr.pdf - WV HB 4588 (2026 RS) bill status / action history: https://www.wvlegislature.gov/Bill_Status/bills_history.cfm?year=2026&sessiontype=RS&input=4588 - WV SB 644 (2026 RS) companion bill text: http://www.wvlegislature.gov/Bill_Status/bills_text.cfm?billdoc=sb644+intr.htm&yr=2026&sesstype=RS&i=644 - Adam Burkhammer (R-District 64) - Ballotpedia: https://ballotpedia.org/Adam_Burkhammer - Patricia Rucker (R-District 16) - Ballotpedia: https://ballotpedia.org/Patricia_Rucker Canonical: https://eftccredit.com/news/west-virginia-hb-4588-treasurer-25f-stalls-conference-march-2026 ### California students mount a “Purple Postcard” campaign pressing Newsom to opt into the federal §25F scholarship credit Date: 2026-02-11. Category: state-action. State: CA. Update, October 1, 2026: Treasury's proposed regulations, which taxpayers may rely on for 2027, let a donor give to an SGO on any participating state's list regardless of where the donor lives, so Californians can claim the credit of up to $1,700 per taxpayer whether or not California opts in. What a state that stays out gives up is §25F scholarships for its own students, because under the rules a scholarship follows the state where the student lives. [How giving across state lines works](https://eftccredit.com/news/give-to-any-of-30-states-25f-scholarships-follow-student-residence-october-2026). A grassroots campaign out of a Los Angeles parish school is testing whether the federal Scholarship Tax Credit (FSTC / ECCA / §25F) can find Democratic constituencies in a state whose leaders have not embraced it. On February 11, 2026, St. Genevieve Parish Schools in Panorama City announced a "Purple Postcard Campaign" in which more than 1,100 students are distributing roughly 15,000 postcards encouraging Californians to contact Governor Gavin Newsom and ask him to opt the state into the program. The organizers tied the campaign to the birthday of labor organizer Cesar Chavez and framed its mass mailing of signed postcards as honoring his legacy of peaceful advocacy. The purple of the postcards is a deliberate nod to the United Farm Workers' colors, signaling that the effort is pitched from the left rather than the school-choice right that usually carries this issue. What makes the effort notable is the coalition behind it. The campaign cites Democrats for Education Reform, whose CEO is former Providence mayor Jorge Elorza, and the California Catholic Conference, represented by Samara Palko, as partners, and it is advised by Sister Erin Zubal, Chief of Staff at the Catholic social-justice lobby NETWORK. Seton Hill University is offering participating students three college credits for the civics work. That lineup, a Democratic-aligned reform group, the state's Catholic bishops, and a progressive religious lobby, is an unusual one to be pressing a Democratic governor to join a program that most Democratic governors have so far rejected or restricted. It reframes §25F not as a partisan voucher fight but as a funding question for low- and middle-income families who already attend faith-based and independent schools, the constituency St. Genevieve serves in the San Fernando Valley. The stakes the students are invoking are real but prospective. The §25F credit, enacted in 2025, takes effect January 1, 2027 and lets individual donors claim a dollar-for-dollar federal credit of up to $1,700 for gifts to qualifying Scholarship Granting Organizations, but only in states that affirmatively opt in by filing IRS Form 15714 and submitting a list of approved SGOs. Because the scholarships are funded by donors rather than the state treasury, a state that stays out simply forecloses its own residents from the credit while donors elsewhere can claim it. That is the "billions hanging in the balance" argument the campaign leans on. We explain the opt-in mechanics and the donor credit in our [learn library](https://eftccredit.com/learn), and the running tally of which states are in, out, or undecided lives on the [state participation map](https://eftccredit.com/states). As of June 2026, California remains undecided. Governor Newsom has issued no public position on §25F, no bill to opt the state in or to authorize an SGO list has advanced in the 2025-2026 legislative session, and California has neither filed Form 15714 nor submitted a list of Scholarship Granting Organizations. (Republican Rep. Vince Fong separately urged Newsom to opt in, in a letter dated January 29, 2026 and posted to his official congressional office page.) The Purple Postcard Campaign is therefore a data point about advocacy pressure rather than a change in California's status, and it sits alongside the broader pattern we track in [where Democratic governors have landed](https://eftccredit.com/news/democratic-governors-split-on-25f-2026) and the choices facing [other still-pending states](https://eftccredit.com/news/pending-states-whats-at-stake-pennsylvania-may-2026). For founders weighing whether to stand up a California SGO ahead of a possible opt-in, the [California state page](https://eftccredit.com/states/california) and our [SGO directory](https://eftccredit.com/sgos) are the places to watch. Whether the campaign moves Sacramento is unknowable today, but it does establish that the constituency for §25F in California is not confined to the usual school-choice advocates: a governor weighing the decision will hear from Catholic families, a reform-minded Democratic group, and a progressive religious lobby, not only from the program's conservative architects. Update, June 2026: the campaign escalated through the spring rather than ending in March. St. Genevieve students brought their postcards to the California State Capitol in Sacramento on March 25, 2026, and later met with Brooks Allen, Gov. Newsom's education policy advisor, who encouraged them to keep campaigning while the administration continues studying the issue. The signature mass mailing came on May 19, 2026, when participants formed a roughly mile-long human chain to send some 15,000 signed postcards from the Panorama City post office. As of late June 2026, California still has not opted in: Newsom has taken no public position and filed no advance election. Sources: - PR Newswire: Students Lead California Effort as Billions in Federal Scholarship Funds Hang in the Balance (Feb. 11, 2026): https://www.prnewswire.com/news-releases/students-lead-california-effort-as-billions-in-federal-scholarship-funds-hang-in-the-balance-302684646.html - Asian Journal: St. Genevieve students launch Christmas card campaign urging Newsom to say yes to federal scholarship program (Dec. 2025): https://asianjournal.com/usa/california/st-genevieve-students-launch-christmas-card-campaign-urging-newsom-to-say-yes-to-federal-scholarship-program/ Canonical: https://eftccredit.com/news/california-purple-postcard-campaign-newsom-25f-february-2026 ### Ohio Opts In: DeWine Puts the State Onto the Federal §25F Scholarship Tax Credit Date: 2026-02-04. Category: state-action. State: OH. Update, October 1, 2026: Treasury's proposed regulations treat spouses filing jointly as separate taxpayers, so a married couple can claim up to $3,400 when each spouse gives $1,700. A donor who also claims Ohio's state SGO credit on the same gift subtracts that state credit from the gift before the $1,700 cap applies, so a large enough gift can still earn the full federal credit. [How the state-credit rule works](https://eftccredit.com/news/keep-state-credit-full-25f-credit-2200-ordering-rule-october-2026). Ohio has opted into the federal §25F Education Freedom Tax Credit, with Republican Gov. Mike DeWine signing the state onto the program in early February 2026. The move lets Ohio taxpayers claim a federal tax credit of up to $1,700 for donations to qualified scholarship granting organizations (SGOs), with the credit becoming available for the 2027 tax year beginning January 1, 2027. The Ohio Attorney General's charitable-law office now states the position plainly on its certification page: "Ohio has opted to be a covered state for the federal scholarship granting organization program." Ohio's participation was subsequently confirmed by the IRS, which named the state among the 27 jurisdictions that had made an advance election in its [official list released June 8, 2026](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026). The mechanism here matters, and it is worth describing precisely. Ohio did not enact a separate state statute or sign an executive order to join. Instead, the state made an advance election to participate by filing IRS Form 15714, the executive election that a governor (or a governor's designated official) uses to opt a state in. This is the same administrative path the IRS laid out when it published [Form 15714 in December 2025](https://eftccredit.com/news/irs-form-15714-advance-election-december-2025), and the same route taken by states such as [Florida](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026) and [Alaska](https://eftccredit.com/news/alaska-dunleavy-executive-opt-in-25f-january-2026). The Defense of Freedom Institute's participation tracker records Ohio as having "made an advance election to participate under Section 25F for 2027," consistent with both the IRS list and the Attorney General's covered-state language. Because the election is an executive filing rather than legislation, no floor vote or veto fight was required, unlike the contested paths in Kentucky, Kansas, and North Carolina. For Ohio donors and the families they support, the practical effect is straightforward: starting in 2027, a contribution to a qualified Ohio SGO can be offset dollar-for-dollar by a federal credit worth up to $1,700 per taxpayer. The credit is capped at $1,700, a figure the §25F statute itself already settles, as we explain in our breakdown of [why the cap is $1,700 and not $3,400](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026). The covered-state designation also turns on the Attorney General's charitable division, which handles SGO certification in Ohio, so organizations that want to receive §25F donations will need to clear that certification process. Ohio's status, certification details, and the broader national picture are tracked on our [Ohio state page](https://eftccredit.com/states/ohio) and the [national participation map](https://eftccredit.com/states). The opt-in opens a runway for SGOs to organize before the program goes live. With nearly a year between the election and the January 1, 2027 launch, founders weighing whether to establish a qualified Ohio SGO have time to build the infrastructure needed to accept donations, verify eligibility, and award scholarships. How the credit works, who can found an SGO, and what certification entails are covered in our [explainers](https://eftccredit.com/learn), and existing organizations are listed in the [SGO directory](https://eftccredit.com/sgos). Operators standing up a new Ohio program do not have to build the donation, compliance, and scholarship-tracking machinery from scratch: there is software built specifically for the §25F workflow, which can shorten the path from a covered-state election to a functioning program. Ohio now joins a growing roster of states that have elected in ahead of the 2027 launch, a list that has expanded steadily from early movers like [Virginia](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026) through the more than two dozen states the IRS confirmed by June. For Ohio families, the question shifts from whether the credit will be available to how quickly the state's SGO network takes shape, and that buildout is the part worth watching between now and the first day donations can be claimed. Sources: - IRS: More than half of US states signed up to participate in the federal scholarship tax credit program (Ohio listed, IR-2026-76): https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill - Ohio Attorney General Charitable Law: Scholarship Granting Organization Certification (confirms covered-state status): https://charitable.ohioago.gov/Scholarship-Granting-Organization-Certification - Defense of Freedom Institute: Education Freedom Tax Credit state participation tracker: https://dfipolicy.org/education-freedom-tax-credit/ Canonical: https://eftccredit.com/news/ohio-dewine-advance-election-25f-opt-in-february-2026 ### New Hampshire opts into the Federal Scholarship Tax Credit under Gov. Ayotte Date: 2026-01-29. Category: state-action. State: NH. New Hampshire opted into the Federal Scholarship Tax Credit (FSTC), also known as the Educational Choice for Children Act (ECCA) and codified at IRC §25F, on January 29, 2026. The move came by executive action during National School Choice Week, with Governor Kelly Ayotte and the New Hampshire Department of Education announcing that the state would participate and begin identifying the qualifying Scholarship Granting Organizations (SGOs) that will award federally funded K-12 scholarships once the program launches on January 1, 2027. The mechanics are the same everywhere: a state opts in when it files the IRS advance election (Form 15714) designating its participation, after which donors anywhere in the country can claim a dollar-for-dollar federal income tax credit of up to $1,700 for contributions to a qualifying SGO, which awards scholarships to families earning up to 300% of their area median gross income. New Hampshire moved early, joining Virginia, Nevada, and Florida in a January cluster of states that committed before the program's operational details were even fully drawn, a signal that the state did not intend to wait on Treasury's forthcoming regulations to make its intentions clear. The legislature then moved to put the state's participation on a statutory footing. HB 1774, which directs the Department of Revenue Administration to administer the individual credit for contributions to qualified SGOs and tasks the Department of Education with maintaining the approved-SGO list for tax years ending after December 31, 2026, cleared both chambers in late May 2026. Codifying participation this way matters for operators and donors: it puts the state's involvement beyond a single administration's discretion and gives prospective SGO founders a clearer framework to build against. For families, donors, and prospective SGO founders in New Hampshire, the practical takeaway is that the state is firmly in the participating column and the work now shifts to standing up the SGO infrastructure ahead of the 2027 launch. New Hampshire's status, and every other state's, is tracked on our [New Hampshire state page](https://eftccredit.com/states/new-hampshire) and the [national participation map](https://eftccredit.com/states); anyone weighing whether to launch an organization can start with our guide on [how to start an SGO](https://eftccredit.com/learn/how-to-start-an-sgo). Sources: - New Hampshire Department of Education: New Hampshire opts into federal education tax credit program: https://www.education.nh.gov/news-and-media/new-hampshire-opts-federal-education-tax-credit-program-scholarship-granting-organizations - Concord Monitor: New Hampshire opts into federal education scholarship program (Jan. 29, 2026): https://www.concordmonitor.com/2026/01/29/new-hampshire-opts-into-federal-education-scholarship-program/ - New Hampshire HB 1774 (2026): bill status and text: https://www.citizenscount.org/bills/hb-1774-2026 Canonical: https://eftccredit.com/news/new-hampshire-ayotte-opts-in-january-2026 ### Alaska opted in. Its teachers' union says the state constitution's no-aid clause makes that illegal. Date: 2026-01-29. Category: analysis. State: AK. Most of the state-level fights over the federal Scholarship Tax Credit (FSTC / ECCA / §25F) have turned on politics, whether a governor or legislature wants the program at all. Alaska has surfaced a different and sharper question, one of state constitutional law. In late January 2026, Governor Mike Dunleavy signed Alaska into the federal credit ahead of its January 1, 2027 launch, putting the state on the roster of early opt-ins. Within days, NEA-Alaska, the state's largest teachers' union, argued that the move is unlawful under Alaska's own constitution, setting up a legality dispute that is distinct from the national voucher framing the unions have used elsewhere. The union's argument is rooted in Alaska's constitutional no-aid clause, which bars the use of public funds for the direct benefit of private or religious educational institutions. NEA-Alaska President Laura Capelle asserted that channeling the federal credit toward private-school tuition would run headlong into that prohibition, regardless of how the dollars are labeled. Alaska's no-aid clause is among the stricter such provisions in the country, and it has shaped the state's school-choice litigation before, which is why the union's challenge lands differently here than a generic objection that §25F is a voucher in disguise. The question NEA-Alaska is raising is not whether the program is good policy, but whether a state with a strict no-public-funds clause can lawfully participate in a federal credit that ultimately reaches private and religious schools. Education Commissioner Deena Bishop rejected the premise. Her position is that §25F does not move public money at all: the scholarships are funded by private charitable donations routed through Scholarship Granting Organizations, and the donors receive a federal income-tax credit (capped at $1,700 per donor) rather than a state appropriation. In Bishop's framing, no state dollars are spent, no state revenue is reduced, and the constitutional no-aid clause is therefore never triggered. As she put it, the money is literally individual money, and no public money is reduced. That public-versus-private characterization is the entire ballgame: if the credited donations count as private funds, Alaska's no-aid clause has nothing to grab onto; if a court treats the federal tax credit as a form of public subsidy directed at private schooling, the clause may bar Alaska's participation outright. The dispute is, for now, unresolved. For donors, families, and prospective SGO founders watching Alaska, this is a bellwether for how strict-no-aid states will fit into a national program built on private donations and federal credits. The reasoning tracks a familiar line in school-choice law, that a tax credit is not a government expenditure, a distinction the U.S. Supreme Court drew in a 2011 Arizona case when it held taxpayers lacked standing to challenge a state tuition-tax-credit program. Whether Alaska's courts apply that logic to a strict state no-aid clause is the open question. We cover the broader [union opposition to §25F and the voucher framing](https://eftccredit.com/news/who-opposes-25f-unions-democrats-repeal-bill-2026) separately; this Alaska dispute is a narrower constitutional-legality challenge. Alaska's current status, and every other state's, is tracked on our [Alaska state page](https://eftccredit.com/states/alaska) and the [state participation map](https://eftccredit.com/states), and the mechanics of how the credit is funded are explained in [how the federal tax credit works](https://eftccredit.com/learn/federal-tax-credit-explained). Sources: - Anchorage Daily News: Dunleavy opts Alaska in to federal tax credit scholarship program that could benefit private schools (Jan. 29, 2026): https://www.adn.com/alaska-news/education/2026/01/29/dunleavy-opts-alaska-in-to-federal-tax-credit-scholarship-program-that-could-benefit-private-schools/ Canonical: https://eftccredit.com/news/alaska-nea-no-aid-clause-challenge-25f-opt-in-january-2026 ### New Hampshire opts into the federal §25F scholarship tax credit: Gov. Ayotte announces participation during School Choice Week Date: 2026-01-29. Category: state-action. State: NH. Update, October 1, 2026: under Treasury's temporary regulations, a state that filed its advance election by January 1, 2027 has until February 15, 2027 to submit its 2027 SGO list. A state's election decides which organizations can be SGOs, not which taxpayers can claim the credit: the proposed regulations let a taxpayer give to an SGO on any participating state's list regardless of residence, and they treat spouses filing jointly as separate taxpayers, so a couple can claim up to $3,400 when each spouse gives $1,700. [The new state calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). On January 29, 2026, during National School Choice Week, Republican Gov. Kelly Ayotte announced that New Hampshire would opt into the new federal Education Tax Credit program for scholarship granting organizations created under §25F of the One Big Beautiful Bill Act. As reported by the Concord Monitor, the decision clears the way for New Hampshire taxpayers to give to approved scholarship granting organizations (SGOs) and claim a dollar-for-dollar federal tax credit of up to $1,700 per taxpayer. The credit becomes available for the 2027 tax year, so the practical effect of the announcement lands at the start of next year rather than immediately. Children's Scholarship Fund New Hampshire, a long-running in-state scholarship nonprofit, positioned itself to administer the federally backed scholarships, and its executive director Kate Baker Demers welcomed the move in both the organization's own announcement and the Monitor's coverage. The mechanics are what set §25F apart from an ordinary charitable deduction. A taxpayer who donates to a qualifying SGO claims the contribution back as a credit, not a write-off, meaning the federal government effectively offsets the gift up to the $1,700 ceiling. The donated dollars then fund scholarships that families can use for tuition and other qualifying education expenses. Eligibility runs to families earning up to 300 percent of their area median gross income, a regional threshold set in the statute rather than a single flat statewide figure. New Hampshire's entry follows the advance-election path the federal government laid out for states under §25F for the 2027 program year; that election is what places a state on the federal roster and is a precondition for any of its taxpayers to claim the credit. The IRS confirmed in a newsroom release that more than half the states had signed up, and New Hampshire appears on that participating-states list. For SGOs and donors in New Hampshire, the timeline now matters more than the headline. Because scholarships do not flow until the 2027 tax year and states' lists of qualifying SGOs are due to the federal government ahead of the January 1, 2027 launch, the months between now and then are the window in which organizations get qualified, donors plan their giving, and families learn whether they fall under the income threshold. Children's Scholarship Fund NH is the most visible candidate to run scholarships in the state, but the program is open to other qualifying organizations as well. Operators weighing whether to stand up or expand a qualifying organization can review how the program works in our [explainers](https://eftccredit.com/learn) and see the current national field in the [SGO directory](https://eftccredit.com/sgos); the donation-and-scholarship machinery can run on software built specifically for §25F. New Hampshire's status, including what families need to know locally, is tracked on our [New Hampshire state page](https://eftccredit.com/states/new-hampshire). In June 2026, the legislature followed the executive opt-in with a statute: New Hampshire [passed HB 1774, the implementing framework](https://eftccredit.com/news/new-hampshire-hb1774-25f-implementing-statute-ayotte-desk-june-2026) that directs the Department of Revenue Administration to participate in the credit and the Department of Education to build and submit the state's qualifying-SGO list. New Hampshire joins a roster of more than 20 states that have committed ahead of the 2027 launch. Virginia was [first to opt in under Glenn Youngkin](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), Florida followed when [Ron DeSantis signed on](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026), and Colorado came in early under [Jared Polis](https://eftccredit.com/news/colorado-governor-polis-opts-in-december-2025). The IRS later published its own [official list of 27 states](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026) making the advance election, the count that supersedes the smaller running tallies cited at the time of individual announcements. On the cap itself, the figure is fixed in statute, as our explainer on [why the credit is $1,700, not $3,400](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026) lays out. How quickly New Hampshire builds out its SGO network, and how many donors use the credit in its first year, will determine how much the decision actually delivers for families. The full national picture is mapped on our [state participation map](https://eftccredit.com/states). Sources: - Concord Monitor: New Hampshire opts into federal education scholarship program (Jan. 29, 2026): https://www.concordmonitor.com/2026/01/29/new-hampshire-opts-into-federal-education-scholarship-program/ - Children's Scholarship Fund NH: New federal Education Tax Credit strengthens support for students across New Hampshire: https://nh.scholarshipfund.org/new-federal-education-tax-credit-strengthens-support-for-students-across-new-hampshire/ - IRS Newsroom: More than half the U.S. states signed up to participate (lists New Hampshire): https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill - IRS Newsroom: Treasury and IRS allow states to make an advance election under §25F: https://www.irs.gov/newsroom/treasury-irs-allow-states-to-make-an-advance-election-to-participate-in-the-new-federal-tax-credit-for-individual-contributions-to-scholarship-granting-organizations-under-the-one-big-beautiful-bill Canonical: https://eftccredit.com/news/new-hampshire-ayotte-opts-in-25f-january-2026 ### Florida Gov. Ron DeSantis opts Florida into the Federal Scholarship Tax Credit Date: 2026-01-28. Category: state-action. State: FL. [Florida](https://eftccredit.com/states/florida) Governor Ron DeSantis announced on January 28, 2026 that Florida will opt in to the Federal Scholarship Tax Credit (FSTC), also known as the Educational Choice for Children Act (ECCA) and codified at IRC §25F. With Florida's participation, the state's families will be eligible for federal scholarships funded through the program when it goes live on January 1, 2027. Florida already operates one of the largest state-level scholarship tax credit programs in the country, so layering the federal FSTC alongside existing state programs is a relatively natural fit. Florida donors will be able to participate in both programs through separate contributions, taking the federal $1,700 credit on their federal returns, while Florida's own scholarship credits are taken against other state taxes, since Florida has no personal income tax. Florida joins Texas, Louisiana, Iowa, and a growing list of other states that have opted in ahead of the program's launch. The state's existing infrastructure of [Scholarship Granting Organizations (SGOs)](https://eftccredit.com/learn/sgo-guide) positions Florida families to access FSTC scholarships quickly once the program begins. Sources: - Teach Coalition: National Federal Tax Credit Scholarship Tracker: https://teachcoalition.org/federalscholarships/ - Ballotpedia: State participation in the federal K-12 education tax credit scholarship program: https://ballotpedia.org/State_participation_in_the_federal_K-12_education_tax_credit_program Canonical: https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026 ### Step Up For Students spins up a dedicated §25F SGO for Florida: the Step Up, Step Further Scholarship Fund Date: 2026-01-28. Category: state-action. State: FL. When [Governor Ron DeSantis opted Florida into the federal Scholarship Tax Credit (FSTC / ECCA / §25F) on January 28, 2026](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026), the open question was who would actually move the money. The answer arrived the same morning. Step Up For Students, the nonprofit that already administers Florida's state scholarship programs for more than 500,000 students, announced that it will participate in administering the federal program, and that it is doing so by establishing the Step Up, Step Further Scholarship Fund, described in its own materials as "a separate 501c3 non-profit." Rather than route federal donations through its existing state Scholarship Funding Organization, the largest incumbent in American school choice is standing up a distinct federal entity built for §25F from the ground up. The structural choice is the news here, and it is instructive for every operator weighing the same decision. Step Up could have retrofitted its state apparatus to take federal contributions; instead it created a clean, purpose-built vehicle with its own public-facing site (stepupstepfurther.org, also reachable at federalscholarshiptaxescredit.org) and a live donor and parent interest list inviting Floridians to sign up before the program opens. Keeping the federal SGO legally separate insulates the §25F program's compliance posture, accounting, and donor reporting from the state programs it already runs, an approach that matters because the federal credit carries its own distinct rules. The fund commits to spending at least 90% of donations on scholarships, the floor that defines a qualifying SGO under the statute, a standard we break down in [our guide to the 90/10 rule](https://eftccredit.com/learn/sgo-90-10-rule-compliance). The economics for donors track the federal statute exactly. Contributions to the Step Up, Step Further Scholarship Fund will be accepted beginning January 1, 2027, and they carry a dollar-for-dollar federal tax credit of up to $1,700 per donor, with any unused credit eligible to be carried forward for up to five years. On the family side, the fund says it will serve households earning up to 300% of area median income, covering K-12 students at both public and private schools, a deliberately broad eligibility band that mirrors the wide reach §25F was written to allow. For an organization that has spent two decades operating inside Florida's state credit framework, the federal program is additive: Florida donors will be able to support both the state and federal programs through separate contributions, claiming the federal credit on their federal return while Florida's own scholarship credits are taken against other state taxes, since Florida has no personal income tax. For prospective SGO founders watching the rollout, Step Up's move sets an early template: when the nation's biggest school-choice operator chose to build a separate federal entity rather than bolt §25F onto its existing structure, it signaled that the federal program is its own beast deserving its own vehicle. The pattern, a dedicated 501(c)(3), a live interest list well ahead of the January 1, 2027 launch, and an explicit 90% scholarship commitment, is worth studying for anyone mapping out [how to start an SGO](https://eftccredit.com/learn/how-to-start-an-sgo). We track Florida's status and its participating organizations on the [Florida state page](https://eftccredit.com/states/florida), maintain a running [directory of scholarship-granting organizations](https://eftccredit.com/sgos) by state, and follow the broader rollout on the [participation map](https://eftccredit.com/states). Sources: - Step Up, Step Further Scholarship Fund (official site): https://stepupstepfurther.org/ - NextSteps (Step Up For Students): Florida governor opts in, Step Up announces plans to administer (Jan. 28, 2026): https://nextstepsblog.org/2026/01/florida-governor-opts-in-to-federal-scholarship-tax-credit-program-step-up-for-students-announces-plans-to-administer/ - Step Up For Students: Federal Scholarship Tax Credit page: https://www.stepupforstudents.org/federal-scholarship-tax-credit/ - Step Up, Step Further: Florida Expands Opportunity Through the Federal Scholarship Tax Credit Program: https://federalscholarshiptaxescredit.org/florida-expands-opportunity-for-students-through-federal-scholarship-tax-credit-program/ Canonical: https://eftccredit.com/news/step-up-for-students-launches-dedicated-25f-sgo-florida-january-2026 ### South Carolina opts into the federal Scholarship Tax Credit: Gov. McMaster signs on for 2027 Date: 2026-01-28. Category: state-action. State: SC. Update, October 1, 2026: Treasury's temporary regulations give states more time for the first year: a state that filed its Form 15714 advance election by January 1, 2027 has until February 15, 2027 to submit its 2027 SGO list, and in later years the list is due by January 1. [The new state calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). South Carolina has decided to participate in the federal Scholarship Tax Credit (FSTC / ECCA / §25F), Gov. Henry McMaster's office confirmed in late January 2026. As reported by the Post and Courier on January 28, a spokesman for the governor said McMaster opted the state in, clearing the way for South Carolina donors to give to qualifying in-state Scholarship Granting Organizations (SGOs) and claim a dollar-for-dollar federal tax credit of up to $1,700. The credit becomes available January 1, 2027, the same date by which states' lists of qualifying SGOs are due to the federal government, so the practical effect of the decision lands at the start of next year rather than immediately. McMaster, a Republican who has led the state since 2017, has been a consistent supporter of expanding private-school choice in South Carolina. The mechanics are what set §25F apart from a deduction. A taxpayer who donates to a qualifying SGO claims the contribution back as a credit, not a write-off, meaning the federal government effectively offsets the gift up to the $1,700 ceiling. The donated dollars then fund scholarships that families can use for tuition and other qualifying education expenses. South Carolina's participation is best understood as an opt-in decision confirmed by the governor's office rather than a fully executed formal filing: the cited reporting describes a decision to join, and South Carolina now appears on the IRS roster of participating states. Families become scholarship-eligible if their income falls under 300 percent of their area's gross median income, a threshold that varies by region. The Post and Courier noted that in parts of Charleston that ceiling reaches roughly $300,000, an illustration of how high the cap can run in higher-cost areas, not a flat statewide eligibility number. For SGOs and donors in South Carolina, the timeline now matters more than the headline. Because scholarships do not flow until 2027 and SGO lists are due to the federal government by January 1 of that year, the months ahead are the window in which organizations get qualified, donors plan their giving, and families learn whether they fall under the income threshold. Operators weighing whether to stand up or expand a qualifying organization can review how the program works in our [explainers](https://eftccredit.com/learn) and see the current national field in the [SGO directory](https://eftccredit.com/sgos); the donation-and-scholarship machinery can run on software built specifically for §25F. South Carolina's status, including what families need to know locally, is tracked on our [South Carolina state page](https://eftccredit.com/states/south-carolina). South Carolina joins a growing roster of states that have committed ahead of the 2027 launch. Virginia was [first to opt in](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), and other Republican governors have followed, including Florida, where [Ron DeSantis signed on the same week](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026). The IRS has confirmed that more than half the states have signed up, and the agency's own [roster of participating states](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026) now includes South Carolina. How quickly the state builds out its SGO network, and how many donors take advantage of the credit in its first year, will determine how much the decision actually delivers for South Carolina families. The full national picture is mapped on our [state participation map](https://eftccredit.com/states). Sources: - Post and Courier: SC joins federal tax credit scholarship program (Jan. 28, 2026): https://www.postandcourier.com/education-lab/sc-mcmaster-federal-tax-credit-scholarship-voucher/article_6ec9c9c7-9dc7-43ce-ac85-2475a1515087.html - Palmetto Promise Institute: SC joins federal tax credit scholarship program: https://palmettopromise.org/sc-joins-federal-tax-credit-scholarship-program-widening-families-private-school-choices/ - IRS Newsroom: More than half the U.S. states signed up to participate in the federal scholarship tax credit program (lists South Carolina): https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill Canonical: https://eftccredit.com/news/south-carolina-mcmaster-opts-in-25f-january-2026 ### Utah opts into the federal Scholarship Tax Credit: Gov. Cox announces the election with no opt-in bill Date: 2026-01-27. Category: state-action. State: UT. Update, October 1, 2026: Treasury's temporary regulations set a later first-year deadline: a state that filed its Form 15714 advance election by January 1, 2027 has until February 15, 2027 to submit its 2027 SGO list, and in later years the list is due by January 1. [The new state calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). Utah has elected to participate in the federal Scholarship Tax Credit (FSTC / ECCA / §25F), Republican Gov. Spencer Cox announced in late January 2026. According to the Teach Coalition National Tracker, which last logged Utah's status on January 27, Cox stated on X that the state had opted into the program, the §25F credit that lets a taxpayer claim a dollar-for-dollar federal tax credit of up to $1,700 for contributions to qualified Scholarship Granting Organizations (SGOs). Cox, who has led Utah since 2021 as the state's 18th governor, has been a steady supporter of school-choice expansion. The credit itself does not become available until January 1, 2027, so the announcement is a commitment ahead of launch rather than a benefit that families can claim today. Utah was subsequently confirmed on the IRS's June 8, 2026 roster (IR-2026-76), which named 27 states as having signed up. It is worth being precise about the mechanism, because the announcement and the legal act are not the same thing. An X post or public statement is how Cox communicated the decision; the actual opt-in is a state advance election made to the IRS on Form 15714 under the procedures the Treasury set out (Rev. Proc. 2026-6). The statute lets that election be made by the governor or by another entity that state law designates, which is why a governor-level decision is a recognized executive path and not a workaround. Utah did not need a dedicated opt-in bill, but that is the default federal design rather than a Utah-specific shortcut: the governor advance-election route is the same path other states have used, including Virginia, where Gov. Glenn Youngkin opted in via Form 15714 and was [the first state to do so](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026). Other states reached the program through their legislatures, and a handful only after lawmakers [overrode their governors' vetoes](https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026), so Utah's quiet executive election sits at the easier end of the spectrum. For SGOs and donors in Utah, the timeline now matters more than the headline. Because scholarships do not flow until 2027 and states' lists of qualifying SGOs are due to the federal government by January 1 of that year, the months ahead are the window in which organizations get qualified, donors plan their giving, and families learn whether they fall under the income threshold. Eligibility runs to families earning up to 300 percent of area median gross income, a ceiling that varies by region rather than a flat statewide number. Operators weighing whether to stand up or expand a qualifying organization can review how the program works in our [explainers](https://eftccredit.com/learn) and see the current national field in the [SGO directory](https://eftccredit.com/sgos); the donation-and-scholarship machinery, from intake to award tracking, can run on software built specifically for §25F. Utah's status, including what families need to know locally, is tracked on our [Utah state page](https://eftccredit.com/states/utah). A few caveats are worth flagging for anyone tracking the state closely. The January 27 date rests on the Teach Coalition tracker, and we were not able to independently retrieve the specific Cox X post it cites; a Ballotpedia News roundup published the same day on eleven states taking action did not list Utah, which indicates Utah was not part of that particular batch. The IRS roster, by contrast, is a primary confirmation that Utah is in. None of that changes the substance, only the precision of the announcement date. How quickly Utah qualifies SGOs, defines its application process, and how many donors use the credit in its first year will determine how much the decision actually delivers for Utah families. The full national picture, including which states have signed on through which path, is mapped on our [state participation map](https://eftccredit.com/states) and detailed in our coverage of the [IRS roster of participating states](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026). Sources: - IRS Newsroom: More than half the U.S. states signed up to participate in the federal Scholarship Tax Credit program (IR-2026-76, lists Utah): https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill - IRS: Federal Scholarship Tax Credit (FSTC) page ($1,700 credit, Jan. 1 2027 launch, opt-in process): https://www.irs.gov/government-entities/federal-state-local-governments/federal-scholarship-tax-credit-fstc - Teach Coalition National Tracker: Utah opted in per Gov. Cox (updated Jan. 27, 2026): https://teachcoalition.org/federalscholarships/ - Third Way: What we know so far about the federal tax credit scholarship program (opt-in by governor or designated entity; 300% AMGI): https://www.thirdway.org/memo/what-we-know-so-far-about-the-federal-tax-credit-scholarship-program - Ballotpedia News: Eleven states take action on federal school choice tax credit program in January (Jan. 27, 2026): https://news.ballotpedia.org/2026/01/27/eleven-states-take-action-on-federal-school-choice-tax-credit-program-in-january/ Canonical: https://eftccredit.com/news/utah-governor-cox-opts-in-25f-january-2026 ### Oklahoma's Stitt Opts Into the Federal §25F Credit by Executive Order and Orders a School Choice Hub Date: 2026-01-27. Category: state-action. State: OK. Update, October 1, 2026: Treasury's proposed regulations keep the $1,700 cap per taxpayer but treat spouses filing jointly as separate taxpayers, so a married couple can claim up to $3,400 when each spouse gives $1,700. Taxpayers may rely on that rule for 2027 contributions. [How the joint-return rule works](https://eftccredit.com/news/married-couples-3400-25f-credit-joint-return-proposed-rule-october-2026). Oklahoma Gov. Kevin Stitt (R) marked National School Choice Week by signing Executive Order 2026-03 on January 27, 2026, announcing that the state would participate in the federal §25F scholarship tax credit for the 2027 tax year. The same order directed the creation of an Oklahoma School Choice Hub within 90 days, a digital portal designed to help families compare public, charter, and participating private schools in one place. The move put [Oklahoma](https://eftccredit.com/states/oklahoma) on the early-mover side of a national rollout that has seen governors across the country signal their intent through 2026 (see our [national opt-in map](https://eftccredit.com/states)). The federal §25F credit, created by the One Big Beautiful Bill Act, is a dollar-for-dollar federal income tax credit of up to $1,700 per individual taxpayer for contributions to qualified Scholarship Granting Organizations, effective January 1, 2027. Scholarships flow to families earning up to 300% of their area median income. The credit only operates where the governor has opted the state in and the state has submitted its list of qualified SGOs to the IRS, which is why early announcements like Stitt's matter for the organizations that will eventually distribute the funds. We walk through the mechanics in our [explainers](https://eftccredit.com/learn), including why the per-taxpayer cap is $1,700 and not $3,400 ([the statute already settles this](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026)). Stitt's January executive order announced participation and stood up the School Choice Hub, but it did not by itself complete every formal step of the federal election. That came later in the session: Oklahoma HB 3704 passed the House 73 to 20 on March 23, cleared the Senate 38 to 8 on April 15, and was signed by Stitt on April 17, 2026. The bill directs the governor to formalize the state's federal election and names the Oklahoma Tax Commission as administrator, converting the executive announcement into durable statute. Oklahoma's path of executive signal followed by legislative codification echoes the executive route taken in [Alaska](https://eftccredit.com/news/alaska-dunleavy-executive-opt-in-25f-january-2026), and contrasts with the [veto-override path](https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026) that carried other states across the line. For SGO operators, Oklahoma is now a live market. The IRS confirmed Oklahoma on its official participating-states list in IR-2026-76 on June 8, 2026, one of 27 states recognized at that point (see [our coverage of the IRS list](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026)). States were able to begin signaling participation as early as January 1, 2026, using the advance-election procedure under Rev. Proc. 2026-6 and [IRS Form 15714](https://eftccredit.com/news/irs-form-15714-advance-election-december-2025), which lets prospective SGOs start organizing before a state submits its final SGO roster. Organizations preparing to operate in Oklahoma can find peers in our [SGO directory](https://eftccredit.com/sgos) and can run their programs on software purpose-built for §25F intake, eligibility, and donor receipting. The next milestone to watch is Oklahoma's submission of its qualified SGO list and the standup of the School Choice Hub, the 90-day deliverable from the January order. Both steps will determine when Oklahoma families can actually direct §25F-funded scholarships and when SGOs can begin accepting contributions for the 2027 tax year. As more governors join the program, from [Virginia](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026) and [Florida](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026) to later entrants, Oklahoma's combination of an early executive announcement and a same-session statutory backstop offers a template other states are likely to follow. Sources: - OCPA: Stitt launches school choice hub, opts Oklahoma into new federal tax credit: https://ocpathink.org/post/independent-journalism/stitt-launches-school-choice-hub-opts-oklahoma-into-new-federal-tax-credit - OCPA: House votes to lock in Oklahoma's participation (HB 3704): https://ocpathink.org/post/independent-journalism/house-votes-to-lock-in-oklahomas-participation-in-federal-school-choice-tax-credit - OK House: Federal Scholarship Tax Credit Becoming Law (HB 3704): https://www.okhouse.gov/posts/news-20260430_2 - OK Legislature: HB 3704 committee substitute PDF: https://www.oklegislature.gov/cf_pdf/2025-26%20COMMITTEE%20SUBS/HCS/HB3704%20CS.PDF - IRS: More than half the states signed up (IR-2026-76, lists Oklahoma): https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill - IRS: Form 15714 Advance Election (Dec 2025): https://www.irs.gov/pub/irs-pdf/f15714.pdf - IRS: Rev. Proc. 2026-6 advance election procedure: https://www.irs.gov/pub/irs-drop/rp-26-06.pdf Canonical: https://eftccredit.com/news/oklahoma-stitt-executive-order-school-choice-hub-january-2026 ### Alaska opts into §25F by executive action, then admits it has no scholarship organizations and no rush to build them Date: 2026-01-26. Category: state-action. State: AK. Update, October 1, 2026: under Treasury's temporary regulations, Alaska's 2027 election is complete only if the state submits its SGO list by February 15, 2027, and that list must include every organization located in Alaska that asks to be listed and meets the federal requirements. Whether scholarships can cover home schools and microschools is not yet settled: the proposed regulations define a school as one providing K-12 education as determined under state law and leave the details to separate section 530 guidance that has not been issued. [The new state calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). On January 26, 2026, Alaska Governor Mike Dunleavy opted his state into the federal Scholarship Tax Credit (FSTC / ECCA / §25F), the program that lets taxpayers claim a one-for-one federal credit of up to $1,700 for donations to qualified Scholarship Granting Organizations. The announcement came through an official bulletin from Alaska's Department of Education and Early Development (DEED), which framed the move as expanding school choice. "Opting into the ECCA creates another opportunity for families and students to reap the benefits of school choice," Dunleavy said in the bulletin. Under the program, scholarships can flow to families earning up to 300% of area median gross income, and the dollars can cover tuition and fees at private, charter, micro, and home schools, along with dual-enrollment courses, educational therapies, tutors, and supplies. The program takes effect January 1, 2027. What distinguishes Alaska is not that it opted in, but how. There was no bill, no floor vote, and no veto fight. According to reporting by the Anchorage Daily News, Dunleavy signed the state on earlier in the week and the state simply had to notify the IRS of its intent to join the program, with DEED handling the notification administratively. That is a sharply different path from the one taken in states where participation was contested. Kentucky, Kansas, and North Carolina reached §25F only after legislatures [overrode their governors' vetoes](https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026), and other governors have declined or vetoed opt-in bills outright. Alaska's executive election sidestepped the legislature entirely, and Dunleavy drew criticism for acting without first soliciting input from lawmakers, school boards, or parents. The opt-in is also notably premature on the ground. As of the announcement, no Scholarship Granting Organizations had been established in Alaska, the state had set no application process, and it had not submitted any SGO list. Education Commissioner Deena Bishop made clear the state was in no hurry to change that. "I don't see government moving that fast," she said. "It's no rush. We want to do it right." In practice, opting in is the first and easiest step: the credit cannot actually function in Alaska until qualified SGOs exist to receive donations and award scholarships, and building that infrastructure falls to the state's discretion. For donors and prospective SGO founders, that gap between the election and a working program is the part worth tracking, and it is detailed alongside every other state's status on our [Alaska state page](https://eftccredit.com/states/alaska) and the [national participation map](https://eftccredit.com/states). There is a further wrinkle: Dunleavy will be out of office before the program he opted into ever launches. The §25F credit becomes available January 1, 2027, after the 2026 election cycle, which means a successor administration will inherit the job of standing up SGOs, defining the application process, and administering the program day to day. That inheritance dynamic echoes Virginia, where [Glenn Youngkin opted in before handing the program to Abigail Spanberger](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), though Alaska's version is starker because the launch is further out and the supporting infrastructure does not yet exist. Whether the next governor builds out a robust SGO network or lets the election sit dormant will determine what Alaska families actually receive. Founders weighing whether to establish one of Alaska's first SGOs can review how the organizations work in our [explainers](https://eftccredit.com/learn) and see the current national landscape in the [SGO directory](https://eftccredit.com/sgos). Sources: - Alaska DEED official bulletin: Governor Dunleavy Opts Alaska Into the Federal K-12 Education Tax Credit Scholarship Program (Jan. 26, 2026): https://content.govdelivery.com/accounts/AKDEED/bulletins/40636e2 - Anchorage Daily News: Dunleavy opts Alaska in to federal tax credit scholarship program that could benefit private schools (Jan. 29, 2026): https://www.adn.com/alaska-news/education/2026/01/29/dunleavy-opts-alaska-in-to-federal-tax-credit-scholarship-program-that-could-benefit-private-schools/ Canonical: https://eftccredit.com/news/alaska-dunleavy-executive-opt-in-25f-january-2026 ### North Dakota signals it will join the federal §25F scholarship tax credit: Gov. Armstrong commits the state to the 2027 program Date: 2026-01-26. Category: state-action. State: ND. On Monday, January 26, 2026, North Dakota Governor Kelly Armstrong (Republican), the state's 34th governor, announced that North Dakota will participate in the new federal tax credit for donations to Scholarship Granting Organizations, the program created under §25F. The credit is worth up to $1,700 per taxpayer per year, is nonrefundable, and was established by the One Big Beautiful Bill Act signed by President Trump. Taxpayers will be able to claim it beginning January 1, 2027. Armstrong made the announcement alongside State Superintendent of Public Instruction Levi Bachmeier, who called it an exciting opportunity for North Dakota families. The full text of the commitment is on the [North Dakota state page](https://eftccredit.com/states/north-dakota), which tracks the state's status against every other state on our [national participation map](https://eftccredit.com/states). It is worth being precise about what happened and what did not. Armstrong's announcement was a statement of intent to participate, not a completed federal opt-in. As of late January 2026, North Dakota had not yet submitted the IRS advance-election paperwork (Form 15714) that formally enrolls a state, placing it in the "statement only" tier alongside Arkansas, Indiana, and Iowa rather than with the states that had filed the form, such as Georgia, Idaho, Mississippi, Montana, and Virginia. The governor's office said the state plans to submit a list of approved Scholarship Granting Organizations to the U.S. Treasury in the coming months, and that additional program detail along with an eligible-SGO list will follow. The mechanics of that advance election are explained in our coverage of [IRS Form 15714](https://eftccredit.com/news/irs-form-15714-advance-election-december-2025). The §25F structure is straightforward at the federal level: taxpayers who donate to a qualified SGO can claim a nonrefundable credit of up to $1,700 against their federal tax, and the SGO turns those donations into K-12 scholarships for eligible families. To qualify, an SGO must be a 501(c)(3) public charity and cannot be a private foundation, and income limits apply to the families it serves. Armstrong's office said further Treasury guidance and a state eligibility list are still to come, so the exact roster of North Dakota organizations that can receive credit-eligible gifts is not yet set. For donors, the practical takeaway is that the credit does not function until qualified SGOs exist in the state to receive donations and award scholarships, and standing up that infrastructure is the next step. The fundamentals of how the credit works are laid out in our [explainers](https://eftccredit.com/learn). For organizations weighing whether to become one of North Dakota's first approved SGOs, the window between Armstrong's announcement and the program's January 1, 2027 launch is the time to prepare: confirming 501(c)(3) public-charity status, building a donor-intake and scholarship-award process, and getting on the state's approved list once it is published. Operators do not have to build that machinery from scratch, because there is software purpose-built for running a §25F program end to end, and the current national landscape of organizations is catalogued in our [SGO directory](https://eftccredit.com/sgos). Founders can see how the pieces fit together in our [explainers](https://eftccredit.com/learn) as the state moves from intent to a working program. North Dakota now joins a fast-moving group of states acting on the federal credit in early 2026, from [Virginia's formal opt-in](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026) to [Alaska's executive action](https://eftccredit.com/news/alaska-dunleavy-executive-opt-in-25f-january-2026). The distinction to watch in North Dakota is the gap between Armstrong's stated commitment and a completed federal election: until the state files its advance election and publishes an approved-SGO list, participation remains an intention rather than a live program. Whether North Dakota converts that intent into a working credit, and how robust an SGO network it builds before 2027, is what will determine what families and donors in the state actually receive, and it is detailed on the [North Dakota state page](https://eftccredit.com/states/north-dakota). Sources: - ND Office of the Governor press release: Armstrong announces North Dakota to participate in federal tax credit for donations to Scholarship Granting Organizations (Jan. 26, 2026): https://www.governor.nd.gov/news/armstrong-nd-participate-federal-tax-credit-donations-scholarship-granting-organizations - Ballotpedia News: Eleven states take action on federal school choice tax credit program in January (Jan. 27, 2026): https://news.ballotpedia.org/2026/01/27/eleven-states-take-action-on-federal-school-choice-tax-credit-program-in-january/ - Ballotpedia: Kelly Armstrong (North Dakota): https://ballotpedia.org/Kelly_Armstrong_(North_Dakota) Canonical: https://eftccredit.com/news/north-dakota-armstrong-commits-to-25f-january-2026 ### Federal §25F Credit Could Be a Lifeline for Nevada's Starved Opportunity Scholarship Program Date: 2026-01-24. Category: analysis. State: NV. Gov. Joe Lombardo (R) opted Nevada into the federal Education Freedom Tax Credit (§25F) on Friday, January 23, 2026, filing an advance election with the IRS and Treasury via Form 15714. The move, confirmed by Fox5 Vegas and listed on the governor's office press page, makes Nevada one of the states electing into a program that offers donors a dollar-for-dollar federal tax credit of up to $1,700 per taxpayer for gifts to scholarship-granting organizations (SGOs), with any unused credit carried forward up to five years. The federal credit applies to taxable years beginning after December 31, 2026, which means donations and scholarships do not begin flowing until January 1, 2027. Scholarship eligibility under §25F runs to households at or below 300 percent of area median income, a federal threshold we explain in our [guide to how the credit works](https://eftccredit.com/learn). What makes Nevada's election notable is the condition of its existing state program. Nevada already runs a tax-credit scholarship vehicle, the Opportunity Scholarship program, but lawmakers have steadily squeezed its funding: the annual cap now sits around $6.65 million, down from a peak of roughly $26 million in the 2017-2018 school year. The state's SGOs cap individual awards at about $10,000 per year, though that figure is a program maximum rather than a typical grant. Reporting from The Nevada Independent indicates that actual average awards in 2023 ran closer to $4,000 to a little over $6,000, well short of the roughly $12,000 average private-school tuition in the state. The result is a program that reaches a limited number of families and rarely covers the full cost of attendance. For Nevada SGOs and donors, the federal credit is significant precisely because of that gap. Advocates expect that §25F scholarships could be stacked on top of the existing Opportunity Scholarship awards, channeling new donor dollars through Nevada SGOs for the first time since the state program was constrained, though the exact stacking mechanics depend on Treasury regulations that are not yet final. It is worth keeping the two programs' rules distinct: §25F eligibility is set at 300 percent of area median income under federal law, which is a different test than the income limits attached to the state Opportunity Scholarship program. We track how the federal floor interacts with state-level rules in our coverage of [whether §25F is a floor or a ceiling for state restrictions](https://eftccredit.com/news/federal-floor-or-ceiling-25f-state-restrictions-june-2026), and the $1,700 per-taxpayer cap itself is settled, as we explain in [what the statute already settles on the credit amount](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026). Nevada joins a growing roster of states that have made the election across party lines, including [Virginia](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), [Colorado](https://eftccredit.com/news/colorado-governor-polis-opts-in-december-2025), [Florida](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026), and [Alaska](https://eftccredit.com/news/alaska-dunleavy-executive-opt-in-25f-january-2026), with the IRS publishing a consolidated list of advance-election states by mid-2026. Critics in Nevada have raised concerns that participation could tie the state's hands on future education policy, a tension covered in the second of The Nevada Independent's reports below. We follow Nevada's status, the state of its Opportunity Scholarship program, and any further movement on our [Nevada state page](https://eftccredit.com/states/nevada) and on the [national participation map](https://eftccredit.com/states). The practical question now is how quickly Nevada SGOs can prepare for a 2027 launch. Running a §25F program is largely an operations and compliance build: verifying household income against the federal threshold, tracking donor receipts and carryforwards, and reporting qualified organizations to the IRS. A growing number of scholarship organizations are standing up donor-acquisition and award workflows on software written for the federal credit from the start, rather than retrofitting tools built for older state programs. Operators sizing up the opportunity can study participating organizations across the [national SGO directory](https://eftccredit.com/sgos) as Nevada moves toward its first cycle of stacked federal and state scholarships. Sources: - The Nevada Independent: Federal program could offer lifeline to Nevada's starved school choice scholarship program: https://thenevadaindependent.com/article/federal-program-could-offer-lifeline-to-nevadas-starved-school-choice-scholarship-program - The Nevada Independent: Trump tax program could grow private schools, critics fear it could tie Nevada's hands: https://thenevadaindependent.com/article/trump-tax-program-could-grow-private-schools-critics-fear-it-could-tie-nevadas-hands - Fox5 Vegas: Nevada opts into federal tax credit scholarship program (Jan 23, 2026): https://www.fox5vegas.com/2026/01/23/nevada-opts-into-federal-tax-credit-scholarship-program/ Canonical: https://eftccredit.com/news/nevada-25f-lifeline-starved-opportunity-scholarship-january-2026 ### Washington Lawmakers File HJM 4013 Urging Gov. Ferguson to Opt Into the Federal §25F Credit Date: 2026-01-23. Category: state-action. State: WA. A group of Washington House Republicans introduced House Joint Memorial 4013 on January 23, 2026, a formal legislative request asking Democratic Gov. Bob Ferguson to opt the state into the federal Education Freedom Tax Credit (§25F). The memorial was read for the first time and referred to the House Education Committee the same day. Its prime sponsor is Rep. Michael Keaton (R), who represents the 25th Legislative District including Puyallup and serves as the assistant ranking Republican on the House Education Committee. Among the 25 Republican co-sponsors is Rep. Jim Walsh (R, 19th District, Aberdeen), who also chairs the Washington State Republican Party. The memorial leans on a striking number drawn directly from its own text: a conservative estimate of approximately $732 million in annual donations to Scholarship Granting Organizations serving Washington students if the state participates. The request is procedurally specific. HJM 4013 is addressed to Gov. Ferguson and the Office of Financial Management, and it asks the governor to exercise his authority under IRC section 25F(g)(1)(B) to elect Washington's participation, then to submit the required list of qualified SGOs to the IRS by January 1, 2027, or as early as practicable. That structure reflects how §25F actually works: the credit was created by Public Law 119-21, enacted July 4, 2025, and it is the governor of each state, not the legislature, who makes the election. The bill text accurately summarizes the mechanics, noting that the federal credit is worth up to $1,700 per taxpayer annually, that scholarships are limited to households at or below 300 percent of area median gross income, and that the program is effective for tax years beginning in 2027. We break down the governor-election structure and the household income limits in our [explainers on how the credit works](https://eftccredit.com/learn). For Washington families, SGOs, and donors, the memorial is a marker rather than a green light. A joint memorial carries no force of law; it is a formal expression of the chamber's sentiment directed at the governor, and the decision still rests entirely with Ferguson. The $732 million figure (rounded by some secondary coverage to "more than $700 million") signals the scale of donation volume that could flow to Washington scholarship organizations if the state participates, but none of it materializes unless the governor signs the election. The pressure has not come only from Olympia: U.S. Rep. Michael Baumgartner (WA-05, R) publicly pressed Ferguson in December 2025 to opt Washington in, after praising Colorado for moving early. Washington currently has no state tax-credit scholarship program of its own, which means §25F would represent a brand-new channel of private scholarship funding rather than a federal layer stacked on an existing state credit, the pattern seen in mature school-choice states. The contrast with states that have already acted is sharp. Republican and Democratic governors alike have made the election: [Virginia was the first state to opt in](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), [Colorado's Gov. Polis moved in December 2025](https://eftccredit.com/news/colorado-governor-polis-opts-in-december-2025), [Florida followed in January 2026](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026), and [New York's Gov. Hochul elected in May 2026](https://eftccredit.com/news/new-york-governor-hochul-opts-in-may-2026), putting 27 states on the IRS advance-election list by mid-2026. Democratic governors have not moved uniformly, however, a split we examine in our coverage of [how Democratic governors are dividing on §25F](https://eftccredit.com/news/democratic-governors-split-on-25f-2026). Ferguson's silence places Washington squarely in the undecided column, where a memorial from the minority party is unlikely on its own to force a decision. As of June 2026, the only recorded action on HJM 4013 is the January 23 first reading and referral to the House Education Committee, with no further movement, consistent with the memorial stalling in committee. Whether Washington joins the program now depends almost entirely on whether Gov. Ferguson chooses to make the election before the January 1, 2027 effective year. We track Washington's status, its lack of a current state program, and any movement from the governor on our [Washington state page](https://eftccredit.com/states/washington) and on the [national participation map](https://eftccredit.com/states). For SGO operators preparing in case Washington opts in, a §25F program is largely an operations and compliance build, and a growing number of organizations are standing up donor-acquisition and scholarship workflows on software written for the federal credit from the start. Operators can study existing participating organizations across the [national SGO directory](https://eftccredit.com/sgos). Sources: - HJM 4013 bill summary & status (WA Legislature): https://app.leg.wa.gov/BillSummary/?BillNumber=4013&Year=2025&Initiative=false - HJM 4013 bill text PDF (WA Legislature): https://lawfilesext.leg.wa.gov/biennium/2025-26/Pdf/Bills/House%20Joint%20Memorials/4013-K-12%20federal%20tax-credits.pdf - Michael Keaton (R, 25th LD) - Ballotpedia: https://ballotpedia.org/Michael_Keaton - Jim Walsh (R, 19th LD; WA GOP chair) - Ballotpedia: https://ballotpedia.org/Jim_Walsh_(Washington) - Baumgartner presses Ferguson to opt in (Seattle Red, Dec 2025): https://seattlered.com/education/baumgartner-education-credit/4115775 Canonical: https://eftccredit.com/news/washington-hjm-4013-urges-ferguson-opt-in-25f-january-2026 ### Nevada Opts Into the §25F Federal Scholarship Tax Credit: Gov. Lombardo Enrolls the State for 2027 Date: 2026-01-23. Category: state-action. State: NV. Republican Gov. Joe Lombardo formally enrolled Nevada in the federal Tax Credit Scholarship Program (§25F) on January 23, 2026, his office announced in a press release headlined "Governor Lombardo Opts-In To Federal Tax Credit Scholarship Program." The move makes Nevada a covered state for the program, which was created by the One Big Beautiful Bill Act passed in the summer of 2025 and takes effect January 1, 2027. Under §25F, individual taxpayers who donate to a qualifying Scholarship Granting Organization (SGO) can claim a dollar-for-dollar federal income tax credit of up to $1,700 per year, with the scholarship dollars flowing to families at or below 300 percent of their area median income whose children are eligible to attend public K-12 schools. Coverage from [Fox5 Vegas](https://www.fox5vegas.com/2026/01/23/nevada-opts-into-federal-tax-credit-scholarship-program/), mynews4, and The Nevada Independent each confirmed the announcement the same day. The mechanism here is an administrative opt-in, not a new statute or numbered executive order. Section 25F gives each state's governor the authority to make an advance election enrolling the state, and Lombardo's office exercised that authority directly through the governor's office rather than through the legislature. With the election made, Nevada must now establish an application process for prospective SGOs and submit a certified list of approved organizations to the U.S. Treasury. The governor's office said the finer details of Nevada's application process will follow once Treasury issues further guidance, which is consistent with the broader timeline: federal regulations governing §25F are still under development, and many operational specifics depend on rules Treasury and the IRS have not yet finalized. We walk through the governor-election structure and the household income limits in our [explainers on how the credit works](https://eftccredit.com/learn). For Nevada families, SGOs, and donors, the opt-in opens a new channel of private scholarship funding. Two features matter most for the organizations that will run it: donors can carry unused credits forward for up to five years, and an SGO must spend at least 90 percent of its income on scholarships, leaving no more than a tenth for administrative costs. Those provisions shape both fundraising strategy and the budgets of the scholarship organizations that will compete to be certified in Nevada. Standing up a §25F program is largely an operations and compliance build, from donor receipting and credit tracking to scholarship awards and Treasury reporting, and a growing number of organizations are running these workflows on software written for the federal credit from the start. Operators can study participating organizations across the [national SGO directory](https://eftccredit.com/sgos) as they prepare to apply. Nevada joins a roster of states that have moved early. [Virginia was the first state to opt in](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), [Colorado's Gov. Polis elected in December 2025](https://eftccredit.com/news/colorado-governor-polis-opts-in-december-2025), [Florida followed in January 2026](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026), and Alaska's Gov. Dunleavy made a comparable [executive opt-in that same month](https://eftccredit.com/news/alaska-dunleavy-executive-opt-in-25f-january-2026). Lombardo's decision places Nevada among the states acting well ahead of the January 1, 2027 effective date, giving its scholarship organizations and donors a long runway to organize before the first credits can be claimed. The near-term question for Nevada is procedural: when Treasury publishes its implementing guidance, the state will open its SGO application process and begin building the certified list it must send to Washington. Until then, organizations interested in serving Nevada students can position themselves to apply quickly once the window opens. We track Nevada's status and any movement on the application process on our [Nevada state page](https://eftccredit.com/states/nevada) and across the [national participation map](https://eftccredit.com/states). For operators weighing how to launch a compliant program, our [explainers](https://eftccredit.com/learn) cover the requirements that apply uniformly across every covered state, Nevada included. Sources: - Fox5 Vegas - Nevada opts into federal tax credit scholarship program (Jan 23, 2026): https://www.fox5vegas.com/2026/01/23/nevada-opts-into-federal-tax-credit-scholarship-program/ - mynews4 - Nevada opts into federal school choice tax credit program: https://mynews4.com/news/local/nevada-opts-into-federal-school-choice-program-tax-credit-scholarship-joe-lombardo-big-beautiful-bill-trump-white-house-politics-education - The Nevada Independent - Trump tax program could grow private schools (confirms Lombardo = Republican): https://thenevadaindependent.com/article/trump-tax-program-could-grow-private-schools-critics-fear-it-could-tie-nevadas-hands - Office of Gov. Joe Lombardo press release - Governor Lombardo Opts-In To Federal Tax Credit Scholarship Program: https://gov.nv.gov/Newsroom/PRs/2026/2026-01-23_governor_opts-in_to_federal_tax_credit_scholarship_program Canonical: https://eftccredit.com/news/nevada-governor-lombardo-opts-in-25f-january-2026 ### Indiana Opts Into the Federal §25F Scholarship Tax Credit, With Five SGOs Already Lined Up Date: 2026-01-22. Category: state-action. State: IN. Update, October 1, 2026: under Treasury's proposed regulations, separate gifts are not needed to get both credits. A state credit claimed for a gift is subtracted from the gift before the $1,700 cap applies, so in Treasury's example a $2,500 gift that earns a $500 state credit still gets the full $1,700 federal credit, as long as the combined benefit does not exceed the gift. Spouses filing jointly are separate taxpayers, so a couple can claim up to $3,400 when each spouse gives $1,700. [How the state-credit rule works](https://eftccredit.com/news/keep-state-credit-full-25f-credit-2200-ordering-rule-october-2026). On January 22, 2026, Indiana announced it would opt into the new federal Scholarship Tax Credit (FSTC / ECCA / IRC §25F), an announcement made by Gov. Mike Braun (R) and posted to the State of Indiana's official events listing. Under the program, individual taxpayers can claim a nonrefundable federal credit of up to $1,700 for donations to qualified scholarship granting organizations (SGOs), with the credit becoming available January 1, 2027. Unused credit carries forward for up to five years. What set Indiana's announcement apart from earlier opt-ins was specificity: the state named five Indiana SGOs already planning to participate. You can track Indiana's status on our [Indiana state page](https://eftccredit.com/states/indiana) and the [national participation map](https://eftccredit.com/states). The five organizations the state identified are the Institute for Quality Education, Inc.; the Sagamore Institute Scholarship for Education Choice; the Lutheran Scholarship Granting Organization of Indiana, Inc.; the School Scholarship Granting Organization of Northeast Indiana, Inc.; and the Legacy Foundation. Naming participating SGOs at the moment of the announcement, rather than leaving families and donors to wait for a later certification round, is unusual. Indiana already runs a state-level SGO ecosystem, so several of these groups have years of experience administering scholarships, vetting eligibility, issuing donor receipts, and disbursing funds, the same operational machinery the federal credit will require. The federal credit is designed to layer on top of Indiana's existing 50% state SGO tax credit, with the two running in parallel. The state credit carries no contribution limits, while the federal credit is capped at $1,700 per individual per year and is nonrefundable, meaning it offsets federal tax liability rather than generating a refund beyond it. Indiana donors should be careful about how the two interact, because they do not both apply to the same dollars: under §25F(b)(2) the federal credit is reduced by any state credit the donor claims for the same qualified contributions, so accessing both benefits means separate gifts rather than double-crediting one, a point we work through in [what the statute already settles](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026). For SGOs, the practical question is operational readiness, because a group must be positioned to accept credit-eligible federal donations, track them separately, and report to the U.S. Treasury once the program launches. Indiana's announcement did not specify the legal instrument it used to join, whether an IRS advance election, an executive action, or legislation, and the state's materials describe the move as opting in without naming the mechanism. That distinction matters because states have arrived at §25F by different roads: some by gubernatorial election like [Virginia](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), [Colorado](https://eftccredit.com/news/colorado-governor-polis-opts-in-december-2025), and [Florida](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026), and a few only after legislatures [overrode their governors' vetoes](https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026). The IRS has documented the formal advance-election path in [Form 15714](https://eftccredit.com/news/irs-form-15714-advance-election-december-2025), and the credit cap itself is fixed in statute, as our explainer on [why the figure is $1,700, not $3,400](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026) lays out. The work between now and the January 1, 2027 launch is operational, not political. Indiana's named SGOs, and any others that join, must build out the donor-facing intake, eligibility verification, scholarship disbursement, and Treasury reporting that credit-eligible contributions require. Operators standing up or expanding a §25F program can review how the credit works in our [explainers](https://eftccredit.com/learn) and see the broader national field in the [SGO directory](https://eftccredit.com/sgos); running a compliant program end to end (donor receipts, eligibility checks, disbursement, federal reporting) is exactly the workload software built for §25F is designed to carry. How quickly Indiana's organizations stand up that infrastructure, not the opt-in itself, will determine when Hoosier families actually see scholarships and when donors can begin claiming the credit. Sources: - State of Indiana (events.in.gov): Gov. Braun opts in to new federal tax credit for school choice scholarships: https://events.in.gov/event/gov-braun-opts-in-to-new-federal-tax-credit-for-school-choice-scholarships - WBIW: Governor Braun opts in to new federal tax credit for school choice scholarships (Jan. 22, 2026): https://www.wbiw.com/2026/01/22/governor-braun-opts-in-to-new-federal-tax-credit-for-school-choice-scholarships/ - Ballotpedia: Mike Braun (party and office confirmation): https://ballotpedia.org/Mike_Braun Canonical: https://eftccredit.com/news/indiana-governor-braun-opts-in-25f-january-2026 ### Why Georgia's $100M State Credit Is Now a Federal §25F Launchpad Date: 2026-01-21. Category: analysis. State: GA. Update, October 1, 2026: Treasury's proposed regulations confirm GOAL's figure: spouses filing jointly are treated as separate taxpayers, so a married couple can claim up to $3,400 when each spouse gives $1,700. If a single gift earns both a state and a federal credit, the state credit is subtracted from the gift before the $1,700 cap applies, and the combined benefit cannot exceed the gift. [How the state-credit rule works](https://eftccredit.com/news/keep-state-credit-full-25f-credit-2200-ordering-rule-october-2026). Governor Brian Kemp (R) signed an IRS form at the state Capitol on January 20, 2026, opting Georgia into the federal Education Freedom Tax Credit (§25F), joining roughly fifteen other states that have made the election so far. The move matters more in Georgia than in most states because Georgia already runs one of the country's largest tax-credit scholarship programs: the Georgia Qualified Education Expense Tax Credit, which cost the state about $88.8 million in FY2025. (In May 2026 Gov. Kemp signed HB 328, raising that state credit's annual cap to $150 million for tax years beginning in 2027.) The state credit gives donors up to $2,500 as individuals and up to $5,000 for married couples filing jointly, dollar-for-dollar against their Georgia tax. With Kemp's signature, Georgia donors will be able to layer the new federal credit on top of that mature state machinery beginning in 2027. The mechanics are what make Georgia a launchpad rather than a duplicate. The federal §25F credit is worth up to $1,700 per taxpayer, claimed dollar-for-dollar for contributions to a qualifying Scholarship Granting Organization, and it becomes available beginning January 1, 2027. Georgia GOAL, the state's largest scholarship organization, administers the federal program through a separate entity it calls the American GOAL Scholarship Program, so a Georgia household can give to Georgia GOAL for the state credit and to American GOAL for the federal credit, claiming each on the corresponding return. The two credits are distinct programs with distinct rules: Georgia's state credit runs against an aggregate statewide cap that fills up each year (set at $150 million for 2027 under HB 328), while the federal program's overall volume is not capped the same way, even though each individual donor's federal credit tops out at $1,700. Federal scholarships are also means-tested, limited to families earning under 300% of area median income, a broad band that still narrows who the federal dollars can ultimately serve. For donors, the headline is the stacking. A married couple in Georgia that already maxes the $5,000 state credit can, in 2027, also direct contributions toward the federal credit and capture up to $1,700 per taxpayer on their federal return, two separate dollar-for-dollar offsets feeding scholarships under two different eligibility frameworks. We walk through how a state credit and the federal credit interact, and where they do not double-count, in our explainer on [the federal credit versus state tax credits](https://eftccredit.com/learn/ecca-vs-state-tax-credits). One caution worth flagging: GOAL's materials have floated a "potentially $3,400 for married couples" federal figure, but the joint cap under §25F is unsettled and the prevailing reading is $1,700 per taxpayer, a point we examine in [our look at what the statute already settles](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026). Treat $1,700 per taxpayer as the working number until Treasury says otherwise. The structural lesson for SGO operators is the same one playing out in [Florida, where Step Up For Students stood up a dedicated federal entity](https://eftccredit.com/news/step-up-for-students-launches-dedicated-25f-sgo-florida-january-2026) rather than retrofit its state vehicle: GOAL is running the federal program through a separate organization, American GOAL, instead of bolting §25F onto the SGO that handles Georgia's state credit. Keeping the federal arm legally distinct insulates its compliance posture, accounting, and donor reporting from the state program's rules, and it lets the organization meet the federal 90% scholarship floor and means-testing requirements on their own terms. Operators mapping the same decision can study the participating organizations on our [Georgia state page](https://eftccredit.com/states/georgia), compare structures across the [national SGO directory](https://eftccredit.com/sgos), and review the build-versus-retrofit tradeoffs in [our guide to starting an SGO](https://eftccredit.com/learn/how-to-start-an-sgo). Running a clean, purpose-built federal SGO is largely an operations problem, which is why a growing number of operators are standing up programs on software written for §25F from the start. Georgia's opt-in is a preview of how mature school-choice states will absorb §25F: not by replacing their existing programs, but by bolting a federal layer onto them and letting incumbents like GOAL run both arms in parallel. As more states make the election, the question shifts from whether the credit exists to which organizations can administer it cleanly across two sets of rules. We track every state's status on the [national participation map](https://eftccredit.com/states) and follow the rollout as new states and operators come online. Sources: - The Current GA: program size, FY2025 cost, Kemp signing: https://thecurrentga.org/2026/01/24/georgia-taxpayers-will-get-money-back-for-contributions-to-k-12-private-school-scholarships/ - Georgia GOAL: Federal Tax Credit (§25F) donor page: https://www.goalscholarship.org/for_donors/page/federal-tax-credit - Georgia GOAL: press release: Gov. Kemp signs Georgia into federal program (Jan 20, 2026): https://www.goalscholarship.org/blog/detail/gov-kemp-signs-georgia-into-federal-tax-credit-scholarship-program-for-k-12-families Canonical: https://eftccredit.com/news/georgia-kemp-opts-in-25f-stacks-on-100m-state-credit-january-2026 ### Montana Opts In to Federal §25F Scholarship Credit, Stacking on Its State SSO Program Date: 2026-01-21. Category: state-action. State: MT. Update, October 1, 2026: Treasury's proposed regulations settle how the two credits interact when both apply to the same gift: the state credit is subtracted from the gift first and the $1,700 cap applies to what remains, so a $2,500 gift that earns a $500 state credit still gets the full $1,700 federal credit, and the combined benefit can never exceed the gift. Spouses filing jointly are separate taxpayers, so a couple can claim up to $3,400 when each spouse gives $1,700. [How the state-credit rule works](https://eftccredit.com/news/keep-state-credit-full-25f-credit-2200-ordering-rule-october-2026). On January 21, 2026, Montana Governor Greg Gianforte (R) announced that Montana had formally opted in to the new federal Scholarship Tax Credit created under §25F, making the state one of the early movers ahead of the program's January 1, 2027 launch. According to the governor's office, the decision lets Montana residents claim a federal tax credit of up to $1,700 per taxpayer for donations to approved Scholarship Granting Organizations (SGOs). The federal credit traces to the One Big Beautiful Bill Act, which President Trump signed in July 2025 and which authorized states to elect into the program beginning with the 2027 tax year. Gianforte, who currently chairs the Republican Governors Association, framed the move as expanding education freedom for Montana families. The mechanism here is an administrative election rather than new legislation. Ballotpedia reported on January 27, 2026 that Montana "formally opted into the program by submitting IRS Form 15714," the advance-election filing a governor (or a governor's designated official) uses to opt a state in, and it grouped Montana with Georgia, Idaho, Mississippi, and Virginia as states that took that step in January. That detail comes from Ballotpedia's tracking rather than the governor's press release itself, but it matches the route the IRS laid out when it published [Form 15714 in December 2025](https://eftccredit.com/news/irs-form-15714-advance-election-december-2025), the same path early movers such as [Virginia](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), [Florida](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026), and [Alaska](https://eftccredit.com/news/alaska-dunleavy-executive-opt-in-25f-january-2026) have used. Because the election is an executive filing, no floor vote or veto fight was required, unlike the contested paths several states traveled by [overriding their governors' vetoes](https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026). What makes Montana notable is that the federal credit lands on top of an existing state program. Montana already runs a Student Scholarship Organization Tax Credit administered by the Department of Revenue through EducationDonations.mt.gov, and the governor's announcement notes a $200,000 per-taxpayer cap on that state credit. The two figures should not be conflated: the $200,000 cap belongs to the Montana state SSO credit, while the federal §25F credit is a separate, dollar-for-dollar offset capped at $1,700 per taxpayer under federal law. For donors, that means Montana households giving to scholarship organizations in 2027 may be able to claim the state credit and the federal credit as distinct benefits on their respective returns, each governed by its own rules. We walk through how the federal figure is fixed in statute in our look at [why the cap is $1,700, not $3,400](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026). For SGO operators in Montana, the opt-in turns an established donation pipeline into a launchpad for the federal program, and the practical question becomes execution: which organizations will administer §25F-backed scholarships, and whether they run the federal program through a vehicle built for federal rules or retrofit an existing state entity. Federal scholarships carry their own requirements, including a 90% scholarship floor and means-testing of recipient families, so operators in states with mature SSO networks have generally found it cleaner to run the federal arm as a purpose-built program. Founders weighing how to structure one of Montana's first federal SGOs can review how the organizations work in our [explainers](https://eftccredit.com/learn) and see the current national landscape in the [SGO directory](https://eftccredit.com/sgos), where a growing number of operators are running their programs on software written for §25F from the start. Montana's election was confirmed on the IRS roster published June 8, 2026 (IR-2026-76), which listed it among the [27 participating states](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026) that had signed up by mid-year. With the credit not available until January 1, 2027, the year ahead is about buildout: standing up the SGO list, defining the application process, and clarifying how the federal credit interacts with the state's SSO program. Montana's status, alongside every other state's, is tracked on our [Montana state page](https://eftccredit.com/states/montana) and the [national participation map](https://eftccredit.com/states). Sources: - Montana Governor's Office press release (Jan. 21, 2026): https://news.mt.gov/Governors-Office/Montana-Opts-in-to-Federal-Tax-Credit-Scholarship-Program-Expanding-Education-Freedom - IRS IR-2026-76 (June 8, 2026): Montana on the 27-state roster: https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill - Ballotpedia (Jan. 27, 2026): Montana submitted IRS Form 15714: https://news.ballotpedia.org/2026/01/27/eleven-states-take-action-on-federal-school-choice-tax-credit-program-in-january/ - Greg Gianforte (R): Ballotpedia profile: https://ballotpedia.org/Greg_Gianforte Canonical: https://eftccredit.com/news/montana-gianforte-opts-in-25f-stacks-on-state-sso-credit-january-2026 ### Georgia opts into the federal scholarship tax credit: Kemp signs the IRS election, GOAL to run the §25F program through a new arm Date: 2026-01-20. Category: state-action. State: GA. Update, October 1, 2026: Treasury's proposed regulations settle the married-couple question in favor of the doubled figure: spouses filing jointly are treated as separate taxpayers, so a married couple can claim up to $3,400 when each spouse gives $1,700, and taxpayers may rely on that rule for 2027 contributions. [How the joint-return rule works](https://eftccredit.com/news/married-couples-3400-25f-credit-joint-return-proposed-rule-october-2026). Georgia has opted into the federal Scholarship Tax Credit (FSTC / ECCA / §25F). On January 20, 2026, Governor Brian Kemp (R) signed the IRS advance-election form committing the state to participate in the program, which lets individual taxpayers claim a one-for-one federal credit of up to $1,700 per taxpayer per year for donations to qualified Scholarship Granting Organizations. Days later, at the state Capitol on Tuesday, January 24, Kemp announced the move publicly with an unusually cheerful line for a tax filing. "That's probably the happiest I've ever been signing an IRS document," he said. The federal credit becomes available January 1, 2027, and in Georgia it is expected to reach families earning less than 300% of area median income, which works out to roughly $246,000 a year in metro Atlanta. The mechanism here matters, and it is worth being precise about. Georgia did not pass a new statute or issue an executive order to join the program. Kemp executed an advance election using IRS Form 15714, the Advance Election to Participate Under Section 25F for 2027, the same administrative path the Treasury and IRS opened for states under the One Big Beautiful Bill. Georgia was not acting alone or first: it opted in alongside Virginia and Mississippi in the same January cohort, and Ballotpedia counted eleven states moving on §25F during the month. The federal credit is capped at $1,700 per taxpayer per year. Some promoters have floated a doubled $3,400 figure for married couples filing jointly, but Treasury has not settled that question, so the durable number families and donors should plan around is $1,700 per taxpayer. We walk through why in [our breakdown of what the statute already settles](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026). Georgia is one of the few states entering §25F with an established scholarship infrastructure already in place, and the operational plan reflects that. Georgia GOAL Scholarship Program, the state's largest Student Scholarship Organization, says it will keep running the existing state Qualified Education Expense (QEE) credit under the Georgia GOAL name. A new arm, American GOAL Scholarship Program, will administer the federal §25F credit when it launches in 2027. That two-track structure, one organization running the state program and a separate affiliate running the federal one, is a model other SSOs and SGOs are likely to study as they decide how to handle parallel state and federal credits without commingling the two pools of funds. For donors, the near-term takeaway is that the credit does not exist yet: contributions cannot be made and credits cannot be claimed until the program goes live on January 1, 2027. Between now and then, the state and its scholarship organizations have to stand up the application and certification process, and prospective donors should track which organizations register to receive §25F gifts. For SGO and SSO operators watching Georgia, the GOAL/American GOAL split is a reminder that running a §25F program is its own administrative lift: separate eligibility checks, separate donation routing, separate compliance. Operators building that capacity from scratch can run their program on software purpose-built for §25F, and our [SGO directory](https://eftccredit.com/sgos) and [explainers](https://eftccredit.com/learn) lay out how the organizations work. Kemp's election fits a broader pattern we have been tracking state by state. Virginia [opted in early under Glenn Youngkin](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), Florida followed when [Ron DeSantis signed on](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026), and the broader picture, including states that reached §25F only by [overriding their governors' vetoes](https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026), keeps shifting. Georgia's status, alongside every other state's, is detailed on our [Georgia state page](https://eftccredit.com/states/georgia) and the [national participation map](https://eftccredit.com/states). The question now is execution: whether Georgia's mature scholarship network can convert an easy advance election into a working federal credit by the 2027 launch. Sources: - Georgia GOAL: Gov. Kemp Signs Georgia Into Federal Tax Credit Scholarship Program for K-12 Families: https://www.goalscholarship.org/blog/detail/gov-kemp-signs-georgia-into-federal-tax-credit-scholarship-program-for-k-12-families - Georgia GOAL: Federal Tax Credit (§25F) page: https://www.goalscholarship.org/for_donors/page/federal-tax-credit - The Current GA: Georgia taxpayers will get money back for contributions to K-12 private school scholarships (Jan. 24, 2026): https://thecurrentga.org/2026/01/24/georgia-taxpayers-will-get-money-back-for-contributions-to-k-12-private-school-scholarships/ - Ballotpedia: Governors in three states announce they've formally opted into U.S. school choice tax credit scholarship program (Jan. 21, 2026): https://news.ballotpedia.org/2026/01/21/governors-in-three-states-announce-theyve-formally-opted-into-u-s-school-choice-tax-credit-scholarship-program/ - IRS: Treasury, IRS allow States to make an Advance Election to participate in the new federal tax credit under §25F (Form 15714): https://www.irs.gov/newsroom/treasury-irs-allow-states-to-make-an-advance-election-to-participate-in-the-new-federal-tax-credit-for-individual-contributions-to-scholarship-granting-organizations-under-the-one-big-beautiful-bill Canonical: https://eftccredit.com/news/georgia-kemp-opts-in-25f-goal-runs-program-january-2026 ### Mississippi Opts Into §25F: Reeves Makes the Election, but the SGO List Is Still Coming Date: 2026-01-19. Category: state-action. State: MS. On January 19, 2026, Mississippi Governor Tate Reeves (R) announced that the state will participate in the federal Education Freedom Tax Credit (§25F), the program created by the One Big Beautiful Bill Act signed July 4, 2025. The credit is worth up to $1,700 per taxpayer, claimed dollar-for-dollar (and nonrefundable) against federal tax for cash donations to qualifying Scholarship Granting Organizations, with scholarships reserved for households at or below 300% of area median income. The program begins in federal tax year 2027, effective January 1, 2027, so Reeves's move is an advance commitment well ahead of the first dollar moving. The Office of the Governor framed the decision as a way to promote school choice for Mississippi families. The mechanism here is an advance election rather than legislation. On December 12, 2025, the IRS issued a notice allowing states to opt in early by submitting IRS Form 15714, and Ballotpedia reports that Mississippi formally elected to participate through that form. The governor's own press release describes the opt-in in plainer terms, as an administrative decision to join the program, while the "Form 15714" framing comes from Ballotpedia and the underlying IRS notice. Either way, it is the same act at different levels of detail: an executive opt-in that puts Mississippi on the participating list without a floor vote or a veto fight. We explain how the advance election works in our coverage of the [IRS Form 15714 advance election](https://eftccredit.com/news/irs-form-15714-advance-election-december-2025), and we track which states have made the call on the [national participation map](https://eftccredit.com/states). The catch, and the part worth tracking, is that opting in is only the first step. Reeves said the Office of the Governor will designate the state's eligible Scholarship Granting Organizations "in the coming months," meaning SGO certification is still pending and Mississippi has not yet published a list of organizations that can actually receive donations. The credit cannot function on the ground until those SGOs exist and are approved, so there is a real gap between the election and a working program. That gap echoes [Alaska, where Governor Dunleavy opted in administratively before any SGOs were stood up](https://eftccredit.com/news/alaska-dunleavy-executive-opt-in-25f-january-2026), and it stands in contrast to mature school-choice states that already had scholarship infrastructure to layer the federal credit onto. For now, Mississippi donors know the credit is coming but cannot yet point to a certified recipient. For prospective SGO founders, that pending designation window is the opportunity. Whoever gets certified first will be positioned to receive Mississippi's federal donations when the program goes live in 2027, and the state has signaled the door is open in the coming months rather than years. Founders weighing whether to establish one of Mississippi's first §25F organizations can review how the credit and the SGO role work in our [explainers](https://eftccredit.com/learn), see the current national landscape in the [SGO directory](https://eftccredit.com/sgos), and watch the state's certification status on our [Mississippi state page](https://eftccredit.com/states/mississippi). Standing up a compliant federal SGO, one that meets the 90% scholarship floor and the 300% area-median-income means test, is largely an operations problem, which is why a growing number of operators run their programs on software written for §25F from the start. Mississippi joins a wave of states that made the election in January 2026, from [Virginia's first-in-the-nation opt-in](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026) to [Florida under Governor DeSantis](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026). The shared lesson is that the headline opt-in is the easy part, and the substance follows in the certification and build-out that comes next. As Mississippi moves from election to a published SGO list, the question shifts from whether the credit exists to which organizations will administer it cleanly. We will follow the rollout as the state names its first eligible SGOs and the program comes online. Sources: - Office of the Governor of Mississippi press release (Jan 19, 2026): https://governorreeves.ms.gov/governor-reeves-opts-into-federal-tax-credit-scholarship-program-to-promote-school-choice/ - Ballotpedia News: Eleven states take action on federal school choice tax credit program in January (Jan 27, 2026): https://news.ballotpedia.org/2026/01/27/eleven-states-take-action-on-federal-school-choice-tax-credit-program-in-january/ - WCBI: Gov. Tate Reeves announces MS opt-in for Federal Tax Credit Scholarship program: https://www.wcbi.com/governor-tate-reeves-announce-mss-opt-in-for-federal-tax-credit-scholarship-program/ - ActionNews5: Gov. Reeves opts into scholarship program that promotes school choice (Jan 19, 2026): https://www.actionnews5.com/2026/01/19/gov-reeves-opts-into-scholarship-program-that-promotes-school-choice/ Canonical: https://eftccredit.com/news/mississippi-reeves-opts-in-25f-sgo-list-pending-january-2026 ### Alabama Spells Out Who Can Be a §25F SGO: ALDOR Publishes Certification Criteria Date: 2026-01-17. Category: regulatory. State: AL. Update, October 1, 2026: Treasury's proposed regulations side with ALDOR's figure: spouses filing jointly are treated as separate taxpayers, so a married couple can claim up to $3,400 when each spouse gives $1,700, and taxpayers may rely on that rule for 2027 contributions. Our caution against planning on $3,400 no longer applies. [How the joint-return rule works](https://eftccredit.com/news/married-couples-3400-25f-credit-joint-return-proposed-rule-october-2026). Governor Kay Ivey (R) signed Executive Order No. 742 on January 16, 2026, opting Alabama into the federal Education Freedom Tax Credit (§25F) and naming the Alabama Department of Revenue (ALDOR) as the agency that will administer the state's part of the program. ALDOR has since published a guidance page, "The Education Freedom Tax Credit Program: Alabama's Part in the Federal SGO Program," that lays out, for the first time in Alabama, the concrete criteria an organization must satisfy to be certified as a scholarship-granting organization (SGO). The federal credit itself is worth up to $1,700 per taxpayer, claimed dollar-for-dollar for contributions to a qualifying SGO, and it takes effect beginning January 1, 2027. Alabama now joins the roughly fifteen states that have made the election, alongside earlier movers like [Virginia](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026) and [Alaska](https://eftccredit.com/news/alaska-dunleavy-executive-opt-in-25f-january-2026), both of which opted in by executive action rather than legislation. The ALDOR page sets out six requirements an organization must meet to be certified in Alabama. It must be a 501(c)(3) nonprofit that is not classified as a private foundation. It must provide scholarships to 10 or more students who attend more than one school. It must spend at least 90% of the income it receives on student scholarships. It cannot earmark or reserve contributions for specific, named students. It may only fund scholarships for students in Alabama. And it must be certified by ALDOR before it can participate. These mirror the federal §25F structure, where scholarships are also means-tested to households earning up to 300% of area median income, a band that determines which students an Alabama-certified SGO can ultimately serve. The page notes one important caveat on timing: ALDOR says it is still awaiting additional guidance from the U.S. Treasury Department before it finalizes application deadlines, so certification is authorized but not yet operationally open, the same hold that [keeps every participating state from opening SGO applications](https://eftccredit.com/news/no-state-opened-sgo-certification-waiting-september-nprm-july-2026) until the September rules land. One figure on the ALDOR page is worth flagging for donors. The page states the credit cap as $1,700 per year for an individual and $3,400 for married couples filing jointly. The $3,400 joint figure is not settled: Treasury has not ruled on whether married couples can claim double the individual cap, and the prevailing reading of the statute is $1,700 per taxpayer regardless of filing status. We walk through why in [our analysis of what the §25F statute already settles](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026). Until Treasury says otherwise, donors and operators in Alabama should treat $1,700 per taxpayer as the working number rather than banking on the $3,400 joint figure that ALDOR's page currently cites. For prospective Alabama SGO operators, the practical takeaway is that the eligibility bar is now legible even if the calendar is not. The 90% scholarship floor, the no-earmarking rule, the ten-students-across-multiple-schools test, and the non-private-foundation requirement are exactly the kinds of compliance lines that have to be designed into an organization's accounting and grant-making from day one, not retrofitted later. That is the same build-versus-retrofit decision playing out in other states, where incumbents have often chosen to stand up a separate, purpose-built federal entity rather than bolt §25F onto an existing state-credit vehicle, as [Step Up For Students did in Florida](https://eftccredit.com/news/step-up-for-students-launches-dedicated-25f-sgo-florida-january-2026). Operators weighing how to structure an Alabama program can review the requirements alongside our [explainers on how the federal credit works](https://eftccredit.com/learn) and compare structures across the [national SGO directory](https://eftccredit.com/sgos). Meeting the 90% floor and the per-student means-testing cleanly is largely an operations problem, which is why a growing number of operators run §25F programs on software written for the credit from the start. Alabama's move is a useful marker of where the rollout sits in early 2026: states are opting in and publishing their certification rules, but final deadlines are stalled on the same pending Treasury guidance that has held up several other states. The substantive criteria are now public, so organizations can begin organizing toward certification, but no one can submit an application until ALDOR sets the dates. We track Alabama's status and its certified organizations as they come online on the [Alabama state page](https://eftccredit.com/states/alabama), and we follow every state's election on the [national participation map](https://eftccredit.com/states) as the 2027 launch approaches. Sources: - ALDOR: The Education Freedom Tax Credit Program: Alabama's Part in the Federal SGO Program: https://www.revenue.alabama.gov/tax-policy/the-education-freedom-tax-credit-program-alabamas-part-in-the-federal-sgo-program/ - Office of Governor Kay Ivey: press release confirming Alabama's participation in the federal program: https://governor.alabama.gov/newsroom/2026/01/governor-ivey-signs-executive-order-confirming-alabamas-participation-in-federal-education-freedom-tax-credit-program/ - Office of Governor Kay Ivey: Executive Order 742: https://governor.alabama.gov/newsroom/2026/01/executive-order-742/ Canonical: https://eftccredit.com/news/alabama-aldor-publishes-25f-sgo-certification-criteria-january-2026 ### Arizona Gov. Katie Hobbs vetoes FSTC / ECCA opt-in bill (SB 1106) Date: 2026-01-16. Category: state-action. State: AZ. [Arizona](https://eftccredit.com/states/arizona) Governor Katie Hobbs vetoed SB 1106 on January 16, 2026, the state legislature's bill to opt Arizona in to the Federal Scholarship Tax Credit (FSTC), the program known to Congress as the Educational Choice for Children Act (ECCA) and codified at IRC §25F. Hobbs cited the absence of final IRS implementing regulations as part of her rationale for waiting. Arizona's veto is notable because the state already operates one of the country's largest existing state-level scholarship tax credit programs and has well-developed [Scholarship Granting Organization (SGO)](https://eftccredit.com/learn/sgo-guide) infrastructure. The veto means Arizona families will not be eligible for FSTC scholarships when the federal program goes live on January 1, 2027, unless the legislature overrides the veto or the governor reverses course in a subsequent year. FSTC opt-in is an annual decision, states submit a list of qualifying SGOs to the U.S. Treasury by January 1 each year. Arizona could revisit the decision once IRS guidance becomes clearer, particularly after the agency finalizes the proposed regulations announced in [IRS Notice 2025-70](https://eftccredit.com/news/irs-notice-2025-70-section-25f-comments). Sources: - Teach Coalition: National Federal Tax Credit Scholarship Tracker: https://teachcoalition.org/federalscholarships/ - Ballotpedia: State participation in the federal K-12 education tax credit scholarship program: https://ballotpedia.org/State_participation_in_the_federal_K-12_education_tax_credit_program Canonical: https://eftccredit.com/news/arizona-governor-hobbs-vetoes-fstc-opt-in-january-2026 ### Alabama Opts Into Federal §25F by Executive Order: Gov. Ivey Signs EO 742 Date: 2026-01-16. Category: state-action. State: AL. Update, October 1, 2026: under Treasury's temporary regulations an executive order does not by itself make a state a participant. For 2027, every state must file an advance election on Form 15714 by January 1, 2027 and then submit its SGO list by February 15, 2027, or no organization in the state qualifies that year; Alabama appears on the IRS list of states that filed the advance election. [The new state calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). On January 16, 2026, Alabama Governor Kay Ivey (R) signed Executive Order No. 742, confirming Alabama's participation in the federal Education Freedom Tax Credit (§25F), the program created under the One Big Beautiful Bill Act signed in July 2025 that lets taxpayers claim a dollar-for-dollar federal credit of up to $1,700 for donations to qualified Scholarship Granting Organizations. The order directs the Alabama Department of Revenue (ALDOR) to administer the program and to certify eligible scholarship organizations in the state. The credit becomes available beginning January 2027, in line with §25F's January 1, 2027 launch date. Ivey framed the move as building on Alabama's existing school-choice infrastructure, namely the 2024 CHOOSE Act and the 2013 Alabama Accountability Act, rather than as a standalone program built from scratch. What sets Alabama apart is the instrument it used. Rather than have the state submit the IRS Form 15714 advance election that other governors filed around the same time, Ivey signaled participation through an executive order naming ALDOR as the administering agency. The distinction was noted explicitly by Ballotpedia, which reported on January 21 that Virginia's Glenn Youngkin had announced his state's intent on January 9 (a week before Ivey's order), while Mississippi's Tate Reeves (January 19) and Georgia's Brian Kemp (January 20) formally submitted Form 15714 advance elections in the week that followed. Alabama, by contrast, leaned on executive action and its standing Department of Revenue authority. The practical effect is similar (the state is in), but the paperwork trail differs, and that matters for donors and SGOs trying to confirm a state's status against the eventual IRS roster. For SGO operators and donors, the executive order is the starting gun, not the finish line. ALDOR now has to stand up the certification process that determines which organizations can receive §25F contributions in Alabama, and the federal rules carry their own requirements: a 90% scholarship floor, means-testing that limits awards to families earning under 300% of area median income, and donor reporting that is distinct from anything the CHOOSE Act or Accountability Act demand. Operators who already run state-credit programs in Alabama will face the same build-versus-retrofit decision that [Step Up For Students made in Florida](https://eftccredit.com/news/step-up-for-students-launches-dedicated-25f-sgo-florida-january-2026) and that [Georgia GOAL made with its separate American GOAL entity](https://eftccredit.com/news/georgia-kemp-opts-in-25f-stacks-on-100m-state-credit-january-2026), both of which kept the federal arm legally distinct. We track Alabama's certification progress and participating organizations on our [Alabama state page](https://eftccredit.com/states/alabama), and the broader landscape sits in the [national SGO directory](https://eftccredit.com/sgos). Alabama's executive-order path also echoes [Alaska, where Gov. Mike Dunleavy opted in administratively](https://eftccredit.com/news/alaska-dunleavy-executive-opt-in-25f-january-2026) rather than through the legislature, though Alabama enters with far more existing scholarship machinery to build on. The mix of routes into §25F is widening: some states are filing the formal IRS advance election, some are acting by executive order, and others have reached the program only after [legislatures overrode gubernatorial vetoes](https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026). The variation in how states opt in, and how each documents that choice, is something we explain in our [explainers](https://eftccredit.com/learn) and map across every state on the [national participation map](https://eftccredit.com/states). The open question in Alabama is timing and detail: how quickly ALDOR publishes its certification standards, whether the agency aligns SGO requirements with the CHOOSE Act framework or runs §25F on a separate track, and how soon Alabama organizations can begin accepting federally creditable donations ahead of the 2027 launch. Founders weighing whether to establish one of Alabama's first §25F-eligible SGOs can review how the organizations work in our [explainers](https://eftccredit.com/learn) and see the current national picture in the [SGO directory](https://eftccredit.com/sgos). Because running a clean federal program means meeting the 90% floor, means-testing, and donor reporting from day one, a growing number of operators are choosing to run their programs on software written for §25F rather than retrofitting state-credit tooling. Sources: - Governor Ivey press release: Governor Ivey Signs Executive Order Confirming Alabama's Participation in Federal Education Freedom Tax Credit Program (Jan. 16, 2026): https://governor.alabama.gov/newsroom/2026/01/governor-ivey-signs-executive-order-confirming-alabamas-participation-in-federal-education-freedom-tax-credit-program/ - Ballotpedia News: Governors in three states announce they've formally opted into the U.S. school choice tax credit scholarship program (Jan. 21, 2026): https://news.ballotpedia.org/2026/01/21/governors-in-three-states-announce-theyve-formally-opted-into-u-s-school-choice-tax-credit-scholarship-program/ Canonical: https://eftccredit.com/news/alabama-ivey-executive-order-742-opts-into-25f-january-2026 ### Arkansas Announces It Will Participate in the Federal §25F Scholarship Tax Credit Date: 2026-01-16. Category: state-action. State: AR. Update, October 1, 2026: on filing status, Treasury's proposed regulations treat spouses filing jointly as separate taxpayers for the $1,700 cap, so a married couple can claim up to $3,400 on a joint return when each spouse gives $1,700. Taxpayers may rely on that rule for 2027 contributions. [How the joint-return rule works](https://eftccredit.com/news/married-couples-3400-25f-credit-joint-return-proposed-rule-october-2026). On January 16, 2026, Arkansas Governor Sarah Huckabee Sanders (R) announced that Arkansas intends to participate in the new federal tax-credit scholarship program, the §25F Education Freedom Tax Credit created under the One Big Beautiful Bill Act (P.L. 119-21). According to the Governor's Office, the program begins January 1, 2027, and (in the words of the release) "individual taxpayers in Arkansas may now claim a nonrefundable federal tax credit for cash contributions to Scholarship Granting Organizations providing scholarships for elementary and secondary expenses." The release puts the limit plainly: "Individual taxpayers are limited to $1,700 in credits annually," which matches the §25F statute (a $1,700 per-taxpayer credit, 100% nonrefundable, regardless of filing status). Sanders framed the move as an extension of Arkansas LEARNS and its Education Freedom Account program, which the office says served more than 44,000 students in the 2025-26 school year. It is worth being precise about what the announcement is and is not. The Governor's Office release is a statement of intent to participate; it does not reference an IRS advance election, Form 15714, or "covered state" status, and as of late January the public record did not show Arkansas among the states that had formally filed. In its January 27 roundup, Ballotpedia grouped Arkansas with governors who said their states would participate but had not yet formally opted in, while listing Georgia, Idaho, Mississippi, Montana, and Virginia as the states that had filed the IRS advance election in January. Under the §25F framework, states opt in by making that advance election (Form 15714, available for filing on or after January 1, 2026), and the credit goes live January 1, 2027. So Arkansas has signaled it is coming; the documented federal filing is the next step to watch. Mechanically, §25F routes a dollar-for-dollar federal credit through Scholarship Granting Organizations rather than through the state treasury. A donor gives cash to a qualified SGO, claims the nonrefundable credit (capped at $1,700) on a federal return, and the SGO turns those contributions into K-12 scholarships. The federal rules carry their own guardrails that exist independent of any state program: scholarship eligibility is capped at families earning up to 300% of area median gross income, and SGOs face contribution, distribution, and reporting requirements written into the statute. In Arkansas, Secretary of Education Jacob Oliva was named in the announcement, and the practical work of certifying which organizations qualify will fall to the state once it formally enters. We track Arkansas status and participating organizations on our [Arkansas state page](https://eftccredit.com/states/arkansas), and the full national picture lives on the [participation map](https://eftccredit.com/states). For SGO operators and donors, the takeaway is that a §25F program is a distinct federal track, not a relabeling of the state's LEARNS Education Freedom Accounts. An organization that already grants Arkansas EFA scholarships will still face a build-versus-retrofit decision to meet the federal 300%-of-AMGI means test, the donor crediting and receipting rules, and the reporting §25F demands. Arkansas joins a growing and varied field: some governors have filed the formal IRS election like [Virginia](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), some have acted administratively like [Alaska](https://eftccredit.com/news/alaska-dunleavy-executive-opt-in-25f-january-2026) and [Florida](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026), and a handful of states have reached the program only after [legislatures overrode gubernatorial vetoes](https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026). How each state documents its choice is something we explain in our [explainers](https://eftccredit.com/learn), and you can see the organizations already standing up federal arms in the [national SGO directory](https://eftccredit.com/sgos). The open questions in Arkansas are sequencing and detail: when the state files (or confirms it has filed) the IRS advance election, whether Oliva's office aligns §25F certification with the existing LEARNS framework or runs it on a separate track, and how soon Arkansas organizations can begin accepting federally creditable donations ahead of the 2027 launch. Founders weighing whether to stand up an Arkansas §25F-eligible SGO can review how these organizations work in our [explainers](https://eftccredit.com/learn) and watch the national rollout in the [SGO directory](https://eftccredit.com/sgos). Because a clean federal program means meeting the means test, donor reporting, and distribution rules from day one, a growing number of operators are choosing to run their programs on software built for §25F rather than retrofitting state-credit tooling. Sources: - Arkansas Governor's Office press release: Arkansas to Participate in President Trump's Federal Tax Credit Scholarship Program for School Choice (Jan. 16, 2026): https://governor.arkansas.gov/news_post/arkansas-to-participate-in-president-trumps-federal-tax-credit-scholarship-program-for-school-choice/ - Ballotpedia News: Eleven states take action on federal school choice tax credit program in January (Jan. 27, 2026): https://news.ballotpedia.org/2026/01/27/eleven-states-take-action-on-federal-school-choice-tax-credit-program-in-january/ - IRS: Treasury, IRS allow states to make an advance election (Form 15714) to participate in the new federal tax credit under §25F: https://www.irs.gov/newsroom/treasury-irs-allow-states-to-make-an-advance-election-to-participate-in-the-new-federal-tax-credit-for-individual-contributions-to-scholarship-granting-organizations-under-the-one-big-beautiful-bill - Congressional Research Service R48724: Federal Tax Credit Scholarship Program (300% AMGI eligibility, $1,700 credit): https://www.congress.gov/crs-product/R48724 Canonical: https://eftccredit.com/news/arkansas-sanders-announces-25f-participation-january-2026 ### Missouri Gov. Kehoe Says State Will Opt Into the Federal Scholarship Tax Credit for 2027 Date: 2026-01-14. Category: state-action. State: MO. Update, October 1, 2026: Treasury's proposed regulations treat spouses filing jointly as separate taxpayers, so a married couple can claim up to $3,400 when each spouse gives $1,700. They also say how a state credit such as MOScholars interacts with the federal credit when both are claimed on the same gift: the state credit is subtracted from the gift first, and the $1,700 cap applies to what remains. [How the state-credit rule works](https://eftccredit.com/news/keep-state-credit-full-25f-credit-2200-ordering-rule-october-2026). Missouri will opt into the federal scholarship tax credit, Republican Gov. Mike Kehoe announced in his 2026 State of the State address on January 14, 2026. The 58th governor told lawmakers the state intends to participate in the program in 2027, which would let Missouri donors receive up to $1,700 in federal tax credits for contributions to scholarship granting organizations. The federal credit, codified at IRC §25F and enacted as part of the One, Big, Beautiful Bill, is a dollar-for-dollar credit that takes effect on January 1, 2027. Missouri now appears on the [IRS roster of states signed up to participate](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026), which the agency posted on June 8, 2026 with 27 states listed. The governor announced the state's intent to opt in, though the exact procedural route has not yet been specified in the public record. Under §25F, state participation is voluntary, and the program is structured so that participating states identify the SGOs that will deliver federally backed scholarships to families. Several states have reached the federal program by an executive decision, others through legislation, and a handful through [legislative veto overrides](https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026). Missouri's announcement places it alongside early movers such as [Virginia](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), [Colorado](https://eftccredit.com/news/colorado-governor-polis-opts-in-december-2025), and [Florida](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026), all of which committed ahead of the January 2027 launch. Missouri is not starting from scratch on tax-credit scholarships. The state already runs MOScholars, a program that awards state tax credits for contributions to educational assistance organizations and is administered by the Missouri State Treasurer's office. The federal §25F credit is a separate, federally administered program: the Treasurer's MOScholars materials do not reference it, and the state credit and the federal credit are governed by different rules and different authorities. Donors and operators should treat them as distinct tracks rather than assuming the two stack or share oversight. In the same address, Kehoe also proposed a $60 million funding increase for MOScholars, a state-level matter separate from the federal opt-in. For SGO operators, the practical takeaway is that Missouri families and donors are now on a path to the federal credit beginning in 2027, with the $1,700 dollar-for-dollar figure matching the §25F statute (and consistent with our explainer on why [the cap is $1,700, not $3,400](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026)). Organizations that want to raise federal §25F dollars will need infrastructure built for the program's intake, allocation, and reporting requirements. Operators evaluating their options can review our [SGO directory](https://eftccredit.com/sgos) and the operator explainers in [our learn center](https://eftccredit.com/learn), including software purpose-built for §25F donation processing. Missouri's move is a snapshot in a fast-moving national picture. With the IRS list still growing and Treasury having [previewed proposed regulations](https://eftccredit.com/news/treasury-previews-25f-proposed-regulations-june-2026) in June 2026, the operational details of how participating states deliver the credit are still being filled in. We track every state's status on the [national map](https://eftccredit.com/states), and Missouri's specifics live on its [state page](https://eftccredit.com/states/missouri), which we will update as the state confirms its participation mechanism and as the program approaches its 2027 start date. Sources: - KTTN: Gov. Mike Kehoe delivers 2026 State of the State address (Jan. 14, 2026): https://www.kttn.com/governor-mike-kehoe-delivers-2026-state-of-the-state-address/ - IRS newsroom: More than half the US states signed up to participate in the federal scholarship tax credit program (Missouri listed; posted June 8, 2026): https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill - Missouri State Treasurer: MOScholars program (EAO state tax credit): https://treasurer.mo.gov/MOScholars/ Canonical: https://eftccredit.com/news/missouri-governor-kehoe-opts-in-25f-january-2026 ### Virginia became the first state to opt in, now its new governor will decide whether to keep it Date: 2026-01-09. Category: state-action. State: VA. Update, October 1, 2026: under Treasury's temporary regulations, the list that counts for 2027 is the one Virginia files by February 15, 2027, and the state must certify that it includes every organization located in Virginia that asks to be listed and meets the federal requirements, so the eight names in Youngkin's letter do not limit who can qualify. Until that list is filed, a state can in effect opt out of 2027 by not sending it; once the election is complete, Treasury and the IRS read the statute as allowing no revocation. [The 2027 calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). Virginia was the first state in the country to formally opt into the federal Scholarship Tax Credit (FSTC), the program known to Congress as the Educational Choice for Children Act (ECCA) and codified at IRC §25F. Outgoing Governor Glenn Youngkin (R) announced and submitted the opt-in in his final weeks in office, with participation taking effect January 1, 2026; news coverage of the move ran in early January 2026. The program itself does not begin until January 1, 2027. The timing was contentious. Youngkin made the move days before leaving office, and critics, including the Virginia Education Association, characterized it as a last-minute attempt to lock Virginia in before the U.S. Treasury and IRS had finalized the program's rules. The VEA called on incoming Governor Abigail Spanberger (D), who took office in mid-January 2026, to review the final federal guidance before deciding whether Virginia should continue participating. That hands Virginia a distinction beyond being first: it is the first real test of whether a state's opt-in survives a change of administration and party. Because the FSTC opt-in is an annual decision, a governor submits (or declines to submit) a qualifying Scholarship Granting Organization list to the U.S. Treasury each participating year, a successor governor is not necessarily bound by a predecessor's election in future years. Whether Spanberger maintains, modifies, or reverses Virginia's participation ahead of the 2027 launch is being closely watched as a model for other states where control could change hands. We trace exactly where that reversal effort stands, a stalled Democratic bill and the renewal lever still in Spanberger's hands, in our follow-up on [whether Virginia can actually get out of §25F](https://eftccredit.com/news/virginia-can-it-leave-25f-hb359-stalls-spanberger-renewal-june-2026). If Virginia stays in, families at or below 300% of the relevant Area Median Gross Income will be eligible for scholarships through state-designated SGOs once the program goes live, funding tuition, tutoring, special-needs services, and other qualified K-12 expenses. Donors anywhere in the country can claim a non-refundable federal income tax credit of up to $1,700 per taxpayer for contributions to a qualifying SGO. One detail from that opt-in matters more as the launch nears, because it makes Virginia the only state to have taken this step at all: Youngkin's letter to Treasury and the IRS named an initial list of eight Scholarship Granting Organizations, two Virginia-based and six national. They are Step Up, Virginia!; Torah Education Scholarship Fund; The Endowment Project Foundation; American Federation for Children; Children's Scholarship Fund; Reficio; ACE Scholarships; and EducationSuperHighway. The letter noted the list may be updated as federal guidance becomes available, and no application round was ever run, so these eight were named rather than certified against published criteria. Every other participating state is still waiting on Treasury before it can build a list, which is why [the shape of those coming rules](https://eftccredit.com/news/treasury-unified-agenda-25f-interim-final-rule-sgo-lists-fall-2026) matters as much as their timing. Sources: - EdNewsVA: Virginia is first state to formally opt in, quoting Youngkin's letter to Treasury naming the initial eight SGOs (the governor's own release is no longer online after the change of administration): https://ednewsva.org/virginia-is-first-state-to-formally-opt-in-to-education-freedom-tax-credit/ - WVVA: Virginia is first state to opt in to federal Education Freedom Tax Credit; what that means for families: https://www.wvva.com/2026/01/09/virginia-is-first-state-opt-federal-education-freedom-tax-credit-what-that-means-families/ - WRIC: Virginia opts in to federal Education Freedom Tax Credit program, VEA condemns move: https://www.wric.com/news/virginia-news/virginia-federal-education-freedom-tax-credit-program/ - Virginia Education Association: VEA Condemns Youngkin's Last-Minute Move to Opt Virginia Into Federal Voucher Tax Credit: https://www.veanea.org/virginia-education-association-condemns-youngkins-last-minute-move-to-opt-virginia-into-federal-voucher-tax-credit/ - Cornell LII: 26 U.S.C. §25F: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026 ### Iowa Opts Into the Federal §25F Scholarship Tax Credit: Gov. Reynolds Makes Iowa an Early Adopter Date: 2026-01-05. Category: state-action. State: IA. On January 5, 2026, Iowa Governor Kim Reynolds (R) announced that Iowa would opt into the federal scholarship tax credit program created by the One Big Beautiful Bill Act, the §25F credit signed into law on July 4, 2025. According to her office's press release, the program will take effect in 2027 and will let taxpayers claim a dollar-for-dollar federal tax credit of up to $1,700 for contributions to qualified scholarship granting organizations (SGOs). The move places Iowa among the earliest states to commit, the sixth to indicate participation per Ballotpedia, joining a fast-growing roster that already includes [Virginia](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), [Colorado](https://eftccredit.com/news/colorado-governor-polis-opts-in-december-2025), and [Florida](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026). The mechanics are set at the federal level and the same in every participating state. Individual taxpayers who donate to a certified SGO receive a non-refundable federal credit equal to their contribution, capped at $1,700 per taxpayer per year, with the credit applied directly against their federal tax bill rather than as a deduction. Eligible scholarships flow to K-12 families with household income below 300% of area median gross income (AMGI), a generous threshold that reaches well into the middle class in most Iowa metros. To bring the program online, the Iowa Department of Education will work with the Governor's Office to certify eligible SGOs. States formally join by filing IRS Form 15714 to make the advance election and submitting a list of approved SGOs to the Treasury Department. For Iowa donors, the credit is among the most favorable tax incentives available, because a dollar-for-dollar credit returns the full contribution rather than a fraction of it. For SGOs, certification is the gate: only organizations approved through the state process can receive credit-eligible donations and award the scholarships, so the certification framework the Department of Education builds over the next year will shape who participates and how quickly families see funds. Iowa already runs a mature state-level Educational Savings Account program, which gives it administrative experience that some newer opt-in states lack. Operators standing up a §25F-specific SGO can review how the credit works in our [explainers](https://eftccredit.com/learn) and see the broader national field in the [SGO directory](https://eftccredit.com/sgos); running a compliant program (donor receipts, eligibility checks, scholarship disbursement, Treasury reporting) is exactly what software built for §25F is designed to handle. The American Federation for Children celebrated the announcement in a January 6, 2026 release, with CEO Tommy Schultz characterizing Reynolds as an early adopter of the program. The advocacy push reflects how quickly the §25F landscape is consolidating: some states are arriving by gubernatorial election, others through legislation, and a few only after legislatures [overrode their governors' vetoes](https://eftccredit.com/news/veto-override-path-into-25f-three-states-2026). Iowa's path was straightforward by comparison, an executive decision backed by a supportive legislature and an existing school-choice infrastructure. The work ahead is operational. The credit does not become usable until 2027, and between now and then Iowa must certify SGOs, define the application and disbursement process, and submit its SGO list to Treasury. The pace of that buildout, not the opt-in itself, will determine when Iowa families can actually claim scholarships and when donors can begin contributing. We track each state's status, including Iowa's certification progress, on the [Iowa state page](https://eftccredit.com/states/iowa) and the [national participation map](https://eftccredit.com/states). Sources: - Office of Gov. Kim Reynolds press release: Gov. Reynolds Opts Into Federal Education Tax Credit Program, Expands School Choice for Iowa Families (Jan. 5, 2026): https://governor.iowa.gov/press-release/2026-01-05/gov-reynolds-opts-federal-education-tax-credit-program-expands-school-choice-iowa-families - Ballotpedia News: Iowa indicates participation in federal school choice tax credit program (Jan. 8, 2026): https://news.ballotpedia.org/2026/01/08/iowa-indicates-participation-in-federal-school-choice-tax-credit-program/ - American Federation for Children: AFC Celebrates Iowa Governor Kim Reynolds Opting In to Federal Scholarship Tax Credit (Jan. 6, 2026): https://www.federationforchildren.org/afc-celebrates-iowa-governor-kim-reynolds-opting-in-to-federal-scholarship-tax-credit/ Canonical: https://eftccredit.com/news/iowa-governor-reynolds-opts-in-25f-january-2026 ### Louisiana Opts Into the Federal §25F Scholarship Tax Credit, and the Senator Who Co-Wrote It Is From Louisiana Date: 2025-12-17. Category: state-action. State: LA. Update, October 1, 2026: Treasury released its proposed regulations October 1. The cap stays $1,700 per taxpayer, but spouses filing jointly are treated as separate taxpayers, so a married couple can claim up to $3,400 when each spouse gives $1,700, and taxpayers may rely on that rule for 2027 contributions. [How the joint-return rule works](https://eftccredit.com/news/married-couples-3400-25f-credit-joint-return-proposed-rule-october-2026). On December 17, 2025, Louisiana Governor Jeff Landry (R) announced that Louisiana would participate in the federal K-12 scholarship tax credit program created under the One Big Beautiful Bill Act, the §25F credit that lets taxpayers claim up to $1,700 for donations to qualified scholarship granting organizations (SGOs). The IRS confirmed the decision on June 8, 2026 in IR-2026-76, which lists Louisiana among the 27 states that have signed up ahead of the program's January 1, 2027 launch. The hometown angle is hard to miss: the very next day, December 18, 2025, Sen. Bill Cassidy (R-LA), a lead Senate author of the provision, applauded his home state's decision with the line, "Thank you, Governor Landry for adding Louisiana to the list." Cassidy co-led the Senate version of the Educational Choice for Children Act (ECCA) with Sen. Tim Scott (R-SC) before it was folded into the §25F credit, so Louisiana joining the program it helped originate carries a particular symmetry. The federal mechanics are uniform across every participating state. Individual taxpayers who donate to a certified SGO receive a non-refundable federal tax credit equal to their contribution, capped at $1,700 per taxpayer per year, applied dollar for dollar against their federal tax bill rather than as a deduction. The scholarships those SGOs fund flow to K-12 families with household income up to 300% of area median gross income, a threshold that reaches well into the middle class in most Louisiana metros. States join formally through the IRS advance election, as documented in [Form 15714](https://eftccredit.com/news/irs-form-15714-advance-election-december-2025), and by submitting a list of approved SGOs to Treasury. The $1,700 cap is fixed in statute, a point we unpack in [our breakdown of why the figure is $1,700, not $3,400](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026). Louisiana arrives at §25F with infrastructure already in place. The state runs the Tuition Donation Credit Program, an SGO-style framework administered with four active School Tuition Organizations: ACE Scholarships, Arete Scholars, Aspiring Scholars, and Son of a Saint. That experience with donor receipts, eligibility checks, and scholarship disbursement positions Louisiana to plug into the federal channel quickly. One caveat for operators and families: the state program and the federal credit are not identical. Louisiana's Tuition Donation Credit Program caps eligibility at 250% of the federal poverty line, while §25F uses the more generous 300%-of-area-median-income standard, so the two run on different income rules even where the same organizations administer both. Operators standing up a federal-facing SGO can review how the credit works in our [explainers](https://eftccredit.com/learn) and see the broader national field in the [SGO directory](https://eftccredit.com/sgos); running a compliant §25F program (donor receipts, eligibility verification, disbursement, Treasury reporting) is exactly what software built for the credit is designed to handle. For Louisiana donors, the credit is among the most favorable incentives on the books, because a dollar-for-dollar credit returns the full contribution rather than a fraction of it. For the state's School Tuition Organizations, the question is whether they extend their existing operations into the federal program or whether new entrants compete for the same donor relationships and families. Louisiana's decision places it alongside early movers such as [Virginia](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), [Colorado](https://eftccredit.com/news/colorado-governor-polis-opts-in-december-2025), and [Florida](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026), all of which committed ahead of the launch, and on the same confirmed roster captured in the [IRS list of 27 states that have made the advance election](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026). The work ahead is operational, not political. The credit does not become usable until January 1, 2027, and between now and then Louisiana must certify the SGOs that will deliver federally backed scholarships and submit that list to Treasury, all while Treasury itself finalizes the proposed regulations that will govern the program nationwide. The pace of that buildout, not the opt-in announcement, will determine when Louisiana families can actually claim scholarships and when donors can begin contributing. We track Louisiana's status and participating organizations on the [Louisiana state page](https://eftccredit.com/states/louisiana) and follow the national rollout on the [participation map](https://eftccredit.com/states). Sources: - IRS IR-2026-76: More than half the US states signed up to participate in the federal Scholarship Tax Credit program (includes Louisiana, $1,700 credit, June 8, 2026): https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill - Sen. Bill Cassidy press release applauding Louisiana's opt-in (Dec. 18, 2025): https://www.cassidy.senate.gov/?p=38793 - Louisiana Department of Education: Tuition Donation Credit Program: https://doe.louisiana.gov/topic-pages/louisiana-school-choice/tuition-donation-credit-program - AEI: One Big Beautiful Step Toward Education Freedom, How the Federal Scholarship Tax Credit Became Law (authorship, 300% AMI, January 2027 launch): https://www.aei.org/research-products/report/one-big-beautiful-step-toward-education-freedom-how-the-federal-scholarship-tax-credit-became-law/ Canonical: https://eftccredit.com/news/louisiana-governor-landry-opts-in-cassidy-applauds-december-2025 ### IRS releases Form 15714, states can pre-elect §25F (FSTC) participation Date: 2025-12-12. Category: regulatory. Update, October 1, 2026: the advance election is no longer optional. Under Treasury's temporary regulations, every state participating in 2027 must file Form 15714 by January 1, 2027 and complete the election with its SGO list by February 15, 2027, and a state that never sends the list has no qualifying SGOs that year. For later years, the list is due between October 1 and January 1, an advance election may be filed earlier (January 2 to September 30 of the prior year), and a state's first election must be an advance election. [The 2027 calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). On December 12, 2025, the Treasury Department and the Internal Revenue Service issued IR-2025-121, published Revenue Procedure 2026-6, and released Form 15714, "Advance Election to Participate by State for the Federal Scholarship Tax Credit (FSTC)." Rev. Proc. 2026-6 (Internal Revenue Bulletin 2026-02) sets the exclusive procedure for the election; the form lets a state declare its intent to be a "covered State" for calendar year 2027 before it submits the formal list of qualifying [Scholarship Granting Organizations (SGOs)](https://eftccredit.com/learn/sgo-guide) to the Treasury. Under the §25F statute, only donations to SGOs whose state has been certified can generate the federal Scholarship Tax Credit, and only K-12 students in a covered State are eligible to receive those scholarships. Form 15714 gives states a way to lock in their participation early in the program year so that donors and SGOs in those states have certainty about eligibility before the program's January 1, 2027 launch. The advance election is optional: a state may choose to file Form 15714 on or after January 1, 2026 and before its final SGO-list deadline, or it may simply submit the SGO list directly when ready. The IRS has said additional deadlines and procedures for subsequent years (2028 and beyond) will be issued in future guidance. The form complements the broader rulemaking process initiated through Notice 2025-70, which is gathering public comment on state certification, SGO requirements, donor substantiation, and household-income verification. For donors and families, Form 15714 doesn't change who is eligible for the credit or the scholarships, those rules come from the §25F statute itself, but it does add an early signal about which states will be participating. As of mid-2026, states have been using a mix of paths to opt in: gubernatorial certifications, legislative bills, and in three cases (Kentucky, Kansas, and North Carolina) legislative veto overrides. Sources: - IRS IR-2025-121: Treasury, IRS allow States to make an Advance Election to participate: https://www.irs.gov/newsroom/treasury-irs-allow-states-to-make-an-advance-election-to-participate-in-the-new-federal-tax-credit-for-individual-contributions-to-scholarship-granting-organizations-under-the-one-big-beautiful-bill - IRS Form 15714 (PDF), Advance Election to Participate: https://www.irs.gov/pub/irs-pdf/f15714.pdf - IRS Rev. Proc. 2026-6 (PDF), Advance Election procedure: https://www.irs.gov/pub/irs-drop/rp-26-06.pdf - IRS Notice 2025-70 (PDF): https://www.irs.gov/pub/irs-drop/n-25-70.pdf - IRS: Federal Scholarship Tax Credit (FSTC) program page: https://www.irs.gov/government-entities/federal-state-local-governments/federal-scholarship-tax-credit-fstc - Cornell LII: 26 U.S.C. §25F: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/irs-form-15714-advance-election-december-2025 ### Texas opts into the federal §25F scholarship tax credit, layering the $1,700 donor credit on top of its new $1B ESA Date: 2025-12-10. Category: state-action. State: TX. Update, October 1, 2026: the proposed regulations came out October 1, and the companion temporary regulations answer the state-conditions question: a participating state may not require SGOs to operate under rules more restrictive than §25F's and must list every qualifying organization that asks to be included. [Our read of the state rules](https://eftccredit.com/news/one-national-standard-states-cannot-add-sgo-rules-25f-october-2026). Governor Greg Abbott (R) announced on December 10, 2025 that Texas intends to opt in to the federal Scholarship Tax Credit (FSTC / ECCA / §25F), the program enacted under the One Big Beautiful Bill that lets individuals claim a dollar-for-dollar federal credit of up to $1,700 per year for gifts to qualifying Scholarship Granting Organizations. The governor's office framed the decision as a stated intent to participate rather than a completed filing, and the federal listing was confirmed months later: IRS news release IR-2026-76, published June 8, 2026, names Texas among the 27 states signed up for the program. Under §25F, credit a donor cannot use because their tax bill is too small carries forward for up to five years (the carryforward is of unused credit, not of contributions above the $1,700 cap), eligibility runs to families at or below 300% of area median income, and the program launches January 1, 2027. What makes the Texas move distinctive is the layer it sits on. Texas just stood up its own state-funded education savings account program, the Texas Education Freedom Accounts (TEFA), created by Senate Bill 2, which Abbott signed on May 3, 2025. Reporting on the signing put the initial allocation at roughly $1 billion, with the program slated to launch in the 2026-27 school year, and the Texas Comptroller adopted the implementing TEFA rules published in the December 12, 2025 Texas Register. By opting in to §25F two days before those rules posted, Texas positioned the federal $1,700 donor credit to run alongside its own ESA rather than in place of it. The two programs are funded and administered separately: TEFA is a state appropriation that puts money directly into family accounts, while §25F is a federal tax credit that incentivizes private donations into SGOs, which in turn fund scholarships. A point of mechanics worth keeping straight: the December 10 announcement was a stated intent to opt in, not a documented formal election. No public source shows Texas filing the IRS advance-election paperwork ([Form 15714](https://eftccredit.com/news/irs-form-15714-advance-election-december-2025)) specifically, and the confirmation that matters is the IRS roster itself. That [official list of 27 states](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026), released in June 2026, is what moves Texas from announced intent to confirmed participant. The distinction is the same one that has separated talk from commitment in other states this cycle, where governors signaled support well before any binding step was on the record. For SGO operators and donors, the Texas setup is unusually rich. Texans will be able to support scholarships through the federal §25F credit while the state separately funds ESAs through TEFA, which means two parallel money streams aimed at private-school access, governed by two different rulebooks. Donors take the $1,700 credit on their federal return; families draw on TEFA dollars through the state. The volume of need in a state this size, combined with fresh ESA infrastructure, makes Texas a natural early market for new SGOs, and operators standing up a program will need software built specifically for §25F donation routing, receipts, and the annual eligibility and carryforward tracking the statute requires. Our [SGO directory](https://eftccredit.com/sgos) and [explainers](https://eftccredit.com/learn) walk through what that operationally takes. Texas now sits alongside [Virginia](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), [Florida](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026), [Colorado](https://eftccredit.com/news/colorado-governor-polis-opts-in-december-2025), and the rest of the confirmed roster heading into the January 1, 2027 launch. The open questions for the year ahead are the same ones facing every participating state: how Treasury's proposed regulations land, whether states can add their own conditions to the SGO list, and how the federal $1,700 credit interacts with state programs already on the books. Texas is one of the clearest tests of that last question, since few states are pairing a billion-dollar ESA with the federal credit on this timeline. Current status for Texas and every other state is tracked on our [Texas state page](https://eftccredit.com/states/texas) and the [national participation map](https://eftccredit.com/states). Sources: - Office of the Texas Governor: Abbott Announces Texas' Intent To Opt In To Federal School Choice Tax Credit Program (Dec 10, 2025): https://gov.texas.gov/news/post/governor-abbott-announces-texas-intent-to-opt-in-to-federal-school-choice-tax-credit-program - IRS IR-2026-76: More than half the US states signed up to participate in the federal scholarship tax credit program (June 8, 2026): https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill - HillCo Partners: Federal Tax Credit Scholarship Program & Texas Education Freedom Accounts Update (Dec 12, 2025): https://hillcopartners.com/89th-interim-education/federal-tax-credit-scholarship-program-texas-education-freedom-accounts-update/ - Community Impact: Gov. Abbott signs $1B education savings account bill (SB 2, May 3, 2025): https://communityimpact.com/austin/south-central-austin/texas-legislature/2025/05/03/gov-abbott-signs-1b-education-savings-account-bill-program-to-launch-in-2026/ Canonical: https://eftccredit.com/news/texas-abbott-opts-in-federal-25f-scholarship-tax-credit-december-2025 ### Colorado Gov. Polis opts Colorado into the Federal Scholarship Tax Credit Date: 2025-12-05. Category: state-action. State: CO. [Colorado](https://eftccredit.com/states/colorado) Governor Jared Polis announced on December 5, 2025 that Colorado will opt into the federal Scholarship Tax Credit (FSTC), the program known to Congress as the Educational Choice for Children Act (ECCA) and codified at IRC §25F. The announcement made Colorado one of the earliest states to formally signal participation ahead of the program's January 1, 2027 launch. In a November 2025 interview with The Colorado Sun ahead of the announcement, Polis called participation "a no-brainer for the state to take advantage of the federal tax credit scholarship program," describing it as "a real boom of investment in kids." Asked about Colorado's participation, he added: "I would be crazy not to." Polis framed donor contributions to [Scholarship Granting Organizations (SGOs)](https://eftccredit.com/learn/sgo-guide) as charitable contributions eligible for federal tax credits, arguing that opting in lets federal dollars stay in Colorado rather than flowing to scholarship organizations in other states. Under §25F, Colorado families will be eligible to apply for scholarships through state-designated SGOs once the program goes live. Scholarships can support a range of K-12 educational expenses including tuition, tutoring, books and supplies, educational technology, extended-day programs, transportation, internet access, and targeted services for students with disabilities. Eligible students are those in households at or below 300% of the relevant Area Median Gross Income. Donors anywhere in the country can claim the federal credit beginning January 1, 2027, a non-refundable federal income tax credit of up to $1,700 per taxpayer for contributions to a qualifying SGO. As an opted-in state, Colorado will be eligible to receive donations through SGOs operating in the state, with scholarship funds flowing to Colorado students rather than students elsewhere. Sources: - The Colorado Sun: Colorado governor plans to opt into Trump-endorsed initiative that some fear will lead to voucher program: https://coloradosun.com/2025/12/05/colorado-federal-tax-credit-scholarship-program-voucher/ - Chalkbeat Colorado: Polis plans to opt Colorado into federal tax credit scholarship program: https://www.chalkbeat.org/colorado/2025/12/06/coalition-calls-on-polis-to-reject-trump-voucher-tax-credit/ - Sentinel Colorado: Colorado joins federal tax credit program; Polis dismisses bias concerns: https://sentinelcolorado.com/metro/colorado-joins-federal-tax-credit-program-polis-dismisses-bias-concerns/ - Cornell LII: 26 U.S.C. §25F: https://www.law.cornell.edu/uscode/text/26/25F Canonical: https://eftccredit.com/news/colorado-governor-polis-opts-in-december-2025 ### IRS issues Notice 2025-70 requesting public comment on §25F (FSTC) implementation Date: 2025-11-25. Category: regulatory. Update, October 1, 2026: the proposed regulations that followed this notice answer the donor questions above. Spouses filing jointly are treated as separate taxpayers, so a couple can claim up to $3,400 when each spouse gives $1,700; the credit is allowed against both regular tax and the alternative minimum tax; and donors will claim it on Form 8525, which the IRS has not yet released. Taxpayers may rely on the proposed rules for 2027 contributions. [Our read of the rules](https://eftccredit.com/news/treasury-25f-regulations-released-3400-couples-90-percent-states-october-2026). In November 2025, the Internal Revenue Service issued Notice 2025-70, requesting public comment on the implementation of the new Federal Scholarship Tax Credit (FSTC), codified at IRC §25F, the federal credit created by the Educational Choice for Children Act (ECCA) and enacted as Section 70411 of the One Big Beautiful Bill Act (P.L. 119-21). The notice signals the start of formal rulemaking. Treasury and the IRS announced they intend to issue forthcoming proposed regulations, and Notice 2025-70 specifically asks for input on issues including the annual state certification process for participating in the program, the requirements that [Scholarship Granting Organizations (SGOs)](https://eftccredit.com/learn/sgo-guide) must meet, donor substantiation, and verification of household income for eligible students. For donors and families, the practical takeaway is that key implementation details, including final guidance on whether married filers jointly receive a single $1,700 cap or $3,400, AMT coordination, and the specific IRS form donors will use to claim the credit, remain to be issued. Comments submitted in response to Notice 2025-70 are expected to shape the proposed regulations Treasury publishes ahead of the program's January 1, 2027 launch. The comment window closed on December 26, 2025, and Treasury and the IRS received more than 2,200 public comments, a sign of how much is at stake in the rulemaking and how contested some of the design choices are. As of early 2026, Treasury and the IRS were reviewing those comments while developing the proposed regulations. Tax practitioners and SGO operators are watching IRS rulemaking closely. The structure of the proposed regulations will determine how donors document contributions, how SGOs verify eligibility, and how states certify participation each year. Sources: - IRS Notice 2025-70 (PDF): https://www.irs.gov/pub/irs-drop/n-25-70.pdf - Current Federal Tax Developments: Technical Analysis of §25F Guidance: https://www.currentfederaltaxdevelopments.com/blog/2025/11/25/a-technical-analysis-of-25f-guidance-the-obbba-scholarship-tax-credit - CPA Practice Advisor: IRS Seeks Comments on New OBBBA Tax Credit Scholarship Program: https://www.cpapracticeadvisor.com/2025/11/25/irs-seeks-public-comment-on-new-obbba-tax-credit-scholarship-program/173939/ - Afterschool Alliance: Treasury and IRS reviewing public comments on the Federal Tax Credit Scholarship: https://www.afterschoolalliance.org/afterschoolsnack/Treasury-and-IRS-reviewing-public-comments-on-the-Federal-Tax_01-16-2026.cfm Canonical: https://eftccredit.com/news/irs-notice-2025-70-section-25f-comments ### South Dakota will join the federal §25F scholarship tax credit: Gov. Rhoden opts in with an SGO channel already in place Date: 2025-11-14. Category: state-action. State: SD. On Friday, November 14, 2025, South Dakota Governor Larry Rhoden (Republican) announced at Saint Joseph Academy in Sioux Falls that the state will participate in the new federal tax credit for donations to scholarship-granting organizations, the program created under §25F. The credit is permanent, dollar-for-dollar, and worth up to $1,700 per taxpayer per year for contributions to qualified SGOs, and it becomes claimable beginning in January 2027. Framing the decision, Rhoden said his goal as governor is to "support innovation, not to stand in the way." Rhoden, who took office in January 2025 after Kristi Noem's appointment to the federal government, made the commitment as states across the country weigh whether to opt in. South Dakota's status is tracked on the [South Dakota state page](https://eftccredit.com/states/south-dakota) and against every other state on our [national participation map](https://eftccredit.com/states). What sets South Dakota apart from most opt-in states is that it does not start from zero. Since 2016, the state has run the Partners in Education program, created by SB 159 and codified at SDCL Chapter 13-65, which channels contributions to scholarship-granting organizations that fund K-12 tuition for eligible families. It is important to be precise about the mechanism: the existing South Dakota program is an insurance-premium tax credit, meaning insurance companies, not individual income-tax filers, receive credits of up to 100 percent of their contributions, subject to a $5,000,000 annual statewide cap, and it is administered by the Division of Insurance within the South Dakota Department of Labor and Regulation. That is a different instrument from the new federal §25F individual credit, but it means the state already maintains an established SGO infrastructure, including a list of approved organizations that route donations into scholarships. The distinction between the two credits is the kind of state-versus-federal detail we unpack in our [explainers](https://eftccredit.com/learn). The federal §25F structure is straightforward: a taxpayer who donates to a qualified SGO can claim a nonrefundable credit of up to $1,700 against federal tax, and the SGO turns those donations into K-12 scholarships for eligible families. To qualify, an SGO must be a 501(c)(3) public charity rather than a private foundation, and income limits apply to the families it serves. The exact mechanism of South Dakota's opt-in, whether through an IRS advance election filed by the state or through enabling legislation, was not specified in the coverage of Rhoden's announcement, a procedural step explained in our reporting on [IRS Form 15714](https://eftccredit.com/news/irs-form-15714-advance-election-december-2025). What is clear is that South Dakota was later confirmed on the IRS roster of participating states published June 8, 2026 in [IR-2026-76](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026), which listed more than half the states and a per-taxpayer credit of up to $1,700. For organizations weighing whether to receive credit-eligible donations in South Dakota, the head start matters. The state already has a working pipeline of approved scholarship-granting organizations under the Partners in Education program, so existing operators are well positioned to add the federal §25F channel rather than build donor-intake and scholarship-award machinery from scratch. They do not have to assemble that machinery alone: there is software purpose-built for running a §25F program end to end, and the current national landscape of organizations is catalogued in our [SGO directory](https://eftccredit.com/sgos). The practical takeaway for donors is unchanged from every other state: the federal credit does not function until qualified SGOs are in place to receive contributions and award scholarships, and standing up that federal-side process is the next step before 2027. South Dakota now joins a fast-growing group of states acting on the federal credit, from [Virginia's early opt-in](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026) to [Florida's](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026) and [Colorado's](https://eftccredit.com/news/colorado-governor-polis-opts-in-december-2025). Its distinguishing feature is the pre-existing, insurer-funded scholarship channel that gives the state an unusual running start on SGO infrastructure, even though that older program operates through a different tax mechanism than the new individual credit. Whether South Dakota's established organizations move quickly to stand up the federal §25F side, and how robust a donor base they build before the January 2027 launch, is what will determine what families and donors in the state actually receive, and it is detailed on the [South Dakota state page](https://eftccredit.com/states/south-dakota). Sources: - Dakota News Now: Rhoden says state will opt into federal education tax credit program (Nov. 14, 2025): https://www.dakotanewsnow.com/2025/11/14/rhoden-says-state-will-opt-federal-education-tax-credit-program/ - IRS IR-2026-76: More than half the US states signed up to participate in the federal scholarship tax credit program (June 8, 2026): https://www.irs.gov/newsroom/more-than-half-the-us-states-signed-up-to-participate-in-the-federal-scholarship-tax-credit-program-enacted-under-the-one-big-beautiful-bill - SD Dept. of Labor and Regulation, Division of Insurance: Partners in Education Tax Credit Program: https://dlr.sd.gov/insurance/tax_credit_program.aspx - Ballotpedia: Larry Rhoden (party and office confirmation): https://ballotpedia.org/Larry_Rhoden Canonical: https://eftccredit.com/news/south-dakota-rhoden-opts-in-25f-november-2025 ### Nebraska was the first state to commit to the federal §25F credit, signing Executive Order 25-14 in September 2025 Date: 2025-09-29. Category: state-action. State: NE. Update, October 1, 2026: Treasury's temporary regulations set a later first-year deadline: a state that filed its Form 15714 advance election by January 1, 2027 has until February 15, 2027 to submit its 2027 SGO list, and in later years the list is due by January 1. Organizations that want to be on a state list should also register in the IRS SGO portal, which has not opened yet. [The new state calendar](https://eftccredit.com/news/25f-calendar-february-15-state-lists-form-new-sgos-by-january-1-october-2026). On September 29, 2025, Nebraska Governor Jim Pillen signed Executive Order 25-14, titled "Federal Scholarship Tax Credit," opting his state into the new federal Scholarship Tax Credit (FSTC / §25F), the program created in the One Big Beautiful Bill that President Trump signed in the summer of 2025. The Republican governor announced the move at St. Teresa Catholic School in Lincoln, joined by U.S. Reps. Adrian Smith and Mike Flood. Under §25F, individual taxpayers can direct up to $1,700 to a qualified Scholarship Granting Organization (SGO) and claim a dollar-for-dollar federal tax credit, with the scholarship dollars flowing to families earning up to 300% of area median income. The credit becomes available January 1, 2027, which means Nebraska's participation enables school-choice scholarships beginning that year. The move made Nebraska the first state in the country to commit to the new credit, months before the IRS published the advance-election form that states would later use to formally opt in, and well ahead of the wave of opt-ins that followed. It is worth being precise about the mechanism. The executive order is the state's action: it signals Nebraska's intent to participate and directs the relevant agencies to begin building the program. The federal side of opting in is effected separately through the IRS, via an advance election (later formalized on [Form 15714](https://eftccredit.com/news/irs-form-15714-advance-election-december-2025)), with each participating state's certified SGO list due to the IRS by January 1 of the program year. In other words, signing the order is the start of the process rather than the finish. Nebraska's Department of Revenue has stood up a dedicated §25F SGO information page, but SGO certification is not yet open: the application forms and procedures remain pending. Until those are published and organizations are certified, no donations can actually be routed and no scholarships awarded. For SGO founders and donors, that gap between the election and a working program is the part worth tracking. An opt-in is the easiest step; the credit only functions once qualified SGOs exist to receive donations and award scholarships, and in Nebraska that infrastructure is still being built. Operators weighing whether to establish one of Nebraska's first SGOs should watch the Department of Revenue's certification timeline closely, because early movers will be positioned to receive donations the moment the program goes live in 2027. The current status for every state, including Nebraska's pending certification process, is detailed on our [Nebraska state page](https://eftccredit.com/states/nebraska) and the [national participation map](https://eftccredit.com/states), and founders can review how the organizations work and what compliance requires in our [explainers](https://eftccredit.com/learn). Nebraska's first-mover status set a marker that other states measured themselves against. In the months that followed, [Virginia](https://eftccredit.com/news/virginia-first-to-opt-in-youngkin-spanberger-january-2026), [Colorado](https://eftccredit.com/news/colorado-governor-polis-opts-in-december-2025), [Florida](https://eftccredit.com/news/florida-governor-desantis-opts-in-january-2026), and others opted in through a mix of executive action, legislation, and veto-override fights, and by mid-2026 the [IRS had published an official list of states that filed advance elections](https://eftccredit.com/news/irs-official-list-27-states-advance-election-june-2026). Nebraska's path was the cleanest of them: a single executive order, no veto drama, and a governor aligned with the program from the start. The open question now is execution. Whether Nebraska builds a robust SGO network or lets certification drift will determine how many families actually benefit when the credit goes live. Founders looking to be among the first to run a §25F program can see the current national landscape in our [SGO directory](https://eftccredit.com/sgos). Sources: - Office of Gov. Jim Pillen press release: Surrounded by Students, Gov. Pillen Signs Order Opting Into Federal Scholarship Tax Credit (Sept. 29, 2025): https://governor.nebraska.gov/surrounded-students-gov-pillen-signs-order-opting-federal-scholarship-tax-credit - Nebraska Executive Orders official index (confirms EO 25-14 title and date): https://govdocs.nebraska.gov/docs/pilot/pubs/eoindex.html - Nebraska Dept. of Revenue §25F Qualified Elementary and Secondary Education Scholarships information page: https://revenue.nebraska.gov/internal-revenue-code-ss-25f-qualified-elementary-and-secondary-education-scholarships-information - Nebraska Public Media: Gov. Jim Pillen says Nebraska will opt in to federal scholarship tax credit program: https://nebraskapublicmedia.org/en/news/news-articles/gov-jim-pillen-says-nebraska-will-opt-in-to-federal-scholarship-tax-credit-program/ Canonical: https://eftccredit.com/news/nebraska-pillen-first-to-commit-executive-order-25-14-september-2025 ### Ohio Already Runs an SGO Regime: How Its Attorney General Certification Coordinates With the New Federal $1,700 Credit Date: 2025-08-22. Category: analysis. State: OH. Update, October 1, 2026: Treasury's proposed regulations do not apply the $1,700 cap before subtracting a state credit. The state credit comes off the gift first and the cap applies to what remains, so in Treasury's example a $2,500 gift that earns a $500 state credit still gets the full $1,700 federal credit; one gift can earn both credits as long as the combined benefit does not exceed the gift. Spouses filing jointly are also separate taxpayers, so a couple can claim up to $3,400 when each spouse gives $1,700. [How the state-credit rule works](https://eftccredit.com/news/keep-state-credit-full-25f-credit-2200-ordering-rule-october-2026). Ohio enters the federal §25F era with something most states lack: a Scholarship Granting Organization regime that has been running since 2021. Under Ohio Revised Code 5747.73, the state offers a dollar-for-dollar nonrefundable income-tax credit for cash donations to certified SGOs, worth up to $750 for a single taxpayer and up to $1,500 for a married couple filing jointly. What makes Ohio distinctive is not that it has a tax-credit-scholarship program (many states do) but where the certification authority sits: the Ohio Attorney General's Office, through its Charitable Law Section, certifies SGOs and publishes the official certified-organization list at charitable.ohioago.gov. That is an unusual home for a school-choice function, which in most states lives with the department of revenue or education. The new federal Education Freedom Tax Credit, a one-for-one credit of up to $1,700 per taxpayer for cash SGO contributions, arrives on top of this existing structure when it launches January 1, 2027. The word to watch is "coordinates," not "stacks." The federal §25F credit does not simply layer on top of Ohio's $750/$1,500 credit so that a donor pockets both in full on the same gift. Under the federal rules, if a taxpayer claims a state credit on a qualifying SGO contribution, the §25F credit is reduced dollar-for-dollar by the amount of that state credit, and the same dollars cannot also be taken as a §170 charitable deduction. In practice, an Ohio donor who claims the full $1,500 state credit on a contribution would see the available federal credit on that gift reduced accordingly. Donors who want to maximize the federal $1,700 may need to structure separate contributions, or weigh which credit delivers more value given that the Ohio credit is nonrefundable and capped well below the federal figure. We walk through the federal cap itself, and why it is $1,700 rather than $3,400, in our explainer on [what the §25F statute already settles](https://eftccredit.com/news/1700-not-3400-what-the-25f-statute-already-settles-may-2026). There is also a divergence in who and what qualifies. The federal program requires a state to opt in by filing an advance election on IRS Form 15714 under Rev. Proc. 2026-6, the executive route the IRS laid out when it [published Form 15714 in December 2025](https://eftccredit.com/news/irs-form-15714-advance-election-december-2025). Federal §25F also limits scholarships to students whose family income is below 300% of area median income, an eligibility test that Ohio's own statute does not impose in the same terms. So an organization certified by the Ohio Attorney General as an SGO under ORC 5747.73 is not automatically a qualified SGO for federal §25F purposes, and a scholarship that satisfies Ohio's program may not satisfy the federal income ceiling. Operators will be running two overlapping but non-identical rulebooks, and the certification page that confirms Ohio's federal participation is the same Attorney General resource that lists state-certified SGOs. Ohio's status and the broader national picture are tracked on our [Ohio state page](https://eftccredit.com/states/ohio) and the [national participation map](https://eftccredit.com/states). For SGO operators, the takeaway is that Ohio is fertile ground but procedurally dense. The certification function belongs to the Ohio Attorney General's Office as an institution, which persists regardless of who holds the office, so organizations should not pin their planning to any individual office-holder. The practical work is compliance: tracking which donors claim the state credit versus the federal credit, verifying the federal 300%-of-area-median-income eligibility, and keeping the §170 interaction straight so donors are not double-counting the same dollars. None of that has to be built by hand. There is software designed specifically for the §25F workflow, including the donor-credit coordination and eligibility verification that Ohio's dual regime makes especially fiddly, and existing organizations are listed in the [SGO directory](https://eftccredit.com/sgos). How the credit works, who can found an SGO, and what certification entails are covered in our [explainers](https://eftccredit.com/learn). Looking ahead, Ohio is a useful preview of a question every opt-in state will face: how a pre-existing state scholarship credit coordinates with the federal one. The mechanics that reduce the federal credit when a state credit is claimed will shape donor behavior in every state that already runs its own program, not just in states fighting over whether to participate at all. Ohio's experience, layering a 2021 state statute under a 2027 federal credit administered through an Attorney General's charitable division, will be watched by operators and donors well beyond its borders as the first full year of §25F donations approaches. Sources: - Ohio Attorney General Charitable Law: Certified Scholarship Granting Organization List (confirms AG certifies SGOs): https://charitable.ohioago.gov/Scholarship-Granting-Organization-Certification/List - Ohio Revised Code 5747.73 (statutory basis, AG certification, nonrefundable $750/$1,500 credit): https://codes.ohio.gov/ohio-revised-code/section-5747.73 - EdChoice: Ohio Tax-Credit Scholarship Program overview ($750/$1,500, ORC 5747.73, launched 2021): https://www.edchoice.org/school-choice/programs/ohio-tax-credit-scholarship-program/ - IRS: Federal Scholarship Tax Credit (FSTC) overview: https://www.irs.gov/government-entities/federal-state-local-governments/federal-scholarship-tax-credit-fstc - Brownstein: Federal Scholarship Tax Credit Q&A guide (state credit reduces federal credit on the same gift): https://www.bhfs.com/insight/federal-scholarship-tax-credit-qa-guide/ - Ballotpedia: Dave Yost (Republican, Ohio Attorney General): https://ballotpedia.org/Dave_Yost Canonical: https://eftccredit.com/news/ohio-attorney-general-sgo-regime-meets-federal-25f-credit-august-2025 --- ## For SGO operators Operators who want to start or run an SGO and accept the federal credit are pointed to SGO HQ, the companion product from the same publisher. It is built for the federal §25F credit rather than adapted from a state tax-credit tool, and runs donor payments, family eligibility, school disbursement, and §25F federal reporting as one system, at roughly a 3% transaction fee on donations, within the 10% of income that §25F's 90% spending test does not require to go to scholarships. Site: https://sgohq.com. To talk to the team: https://eftccredit.com/contact ## About Publisher: EFTC Credit (eftccredit.com), an independent educational resource with no government affiliation. Contact: info@eftccredit.com. Canonical domain: https://eftccredit.com. Map: https://eftccredit.com/llms.txt. Sitemap: https://eftccredit.com/sitemap.xml.