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EFTC news & updates
State opt-in and veto news, IRS rulemaking, and federal legislative activity on the Education Freedom Tax Credit (EFTC) — also known as the Educational Choice for Children Act (ECCA) or Federal Scholarship Tax Credit (FSTC), codified at IRC §25F.
- Analysis·
Three governors vetoed, three legislatures overrode: the veto path into §25F
Kentucky, Kansas, and now North Carolina have all joined the federal Scholarship Tax Credit (§25F) by overriding a Democratic governor's veto. With North Carolina's June 3 vote, the legislative-override path is no longer a one-off — it's a recognizable route into the program.
- Analysis·
Not a party-line story: where Democratic governors landed on §25F
Colorado's Jared Polis called opting into the federal Scholarship Tax Credit a “no-brainer”; New York's Kathy Hochul signaled intent to join. But Minnesota, Oregon, and New Mexico governors said no. Among Democratic governors, §25F is splitting along lines that aren't purely partisan.
- Regulatory / IRS·
Still pending: what Treasury's §25F proposed regulations need to resolve before 2027
States are electing in and SGOs are forming, but the operational rulebook for the federal Scholarship Tax Credit isn't finished. As of June 2026 Treasury has issued advance-election procedures but not the proposed regulations — and several questions that affect donors and SGOs remain open.
- State action·
North Carolina Senate completes veto override — NC opts into the federal Scholarship Tax Credit
On June 3, 2026, the North Carolina Senate voted 30-19 along party lines to complete the override of Governor Josh Stein's veto of House Bill 87, enacting the bill into law and opting North Carolina into the federal Scholarship Tax Credit (FSTC / ECCA / §25F). It is the third state to join through a legislative veto override.
- Regulatory / IRS·
$1,700, not $3,400: what the §25F statute already settles about the credit
As states opt in and the January 2027 launch nears, one detail trips up donors: is the federal Scholarship Tax Credit $1,700 or $3,400 for a married couple? The statute and early IRS signals answer more than many realize — including that you can't double-dip with the charitable deduction or stack it on top of a state credit for the same donation.
- State action·
North Carolina House overrides Gov. Stein's veto of FSTC opt-in bill (HB 87)
On May 20, 2026, the North Carolina House voted 73-46 to override Governor Josh Stein's veto of House Bill 87, which would opt North Carolina into the federal Scholarship Tax Credit (FSTC / ECCA / §25F). The Senate must still vote to complete the override; Republicans hold the votes to do so.
- Analysis·
Three states that said no to the FSTC are reconsidering: Hawaii, New Mexico, and Oregon
As of mid-May 2026, Hawaii, New Mexico, and Oregon are the three states whose governors had said they would not participate in the federal Scholarship Tax Credit (FSTC / ECCA / §25F). All three are now reported to be reconsidering ahead of the program's January 1, 2027 launch.
- State action·
Illinois public debate over the Federal Scholarship Tax Credit intensifies as Pritzker decision pends
Mid-May 2026 has brought a flurry of Illinois op-eds and lawmaker statements urging Gov. JB Pritzker to opt in — or to stay out — of the federal Scholarship Tax Credit (FSTC / ECCA / §25F) before the program's January 1, 2027 launch. As of May 18, Pritzker has not announced a decision.
- State action·
Colorado Gov. Polis publicly defends his FSTC opt-in at Denver event
On May 9, 2026 — one day after New York signaled intent to join — Colorado Gov. Jared Polis appeared at a Denver event to defend his December 2025 decision to opt Colorado into the federal Scholarship Tax Credit (FSTC / ECCA / §25F), saying he doesn't want the state to “leave money on the table.” The remarks followed a state legislative dust-up over anti-discrimination conditions on participating SGOs.
- Analysis·
What pending states stand to forgo: a closer look at Pennsylvania
Fourteen states have yet to decide on the federal Scholarship Tax Credit (FSTC / ECCA / §25F). Pennsylvania is one of the most-watched: an advocacy-built impact projector pegs the state's three-year foregone scholarship volume at ~$1.97B if Gov. Josh Shapiro doesn't opt in before the program's January 1, 2027 launch.
- State action·
New York Gov. Hochul announces opt-in to Federal Scholarship Tax Credit (FSTC / ECCA)
On May 8, 2026, Governor Kathy Hochul announced New York intends to opt into the federal Scholarship Tax Credit program (FSTC / ECCA / §25F) as part of her FY2027 executive budget proposal. Her office said it will review Treasury guidance before finalizing; if certified, New York families would be eligible for scholarships when the program goes live January 1, 2027.
- Federal action·
Senate Democrats introduce bill to repeal the federal scholarship tax credit
A group of Senate Democrats introduced legislation on April 24, 2026 to repeal §25F, the federal Educational Choice for Children Act / Federal Scholarship Tax Credit, citing concerns about diverting federal tax revenue to private and religious schools.
- State action·
Arizona Gov. Hobbs vetoes a second FSTC opt-in bill (SB 1142)
On April 14, 2026, Arizona Governor Katie Hobbs vetoed SB 1142 — her second veto of a federal Scholarship Tax Credit (FSTC / ECCA / §25F) opt-in bill after rejecting SB 1106 in January. She again pointed to the lack of accountability guardrails and the absence of final federal guidance.
- State action·
Kansas legislature overrides Gov. Kelly's veto, opting Kansas into the Federal Scholarship Tax Credit
After Governor Laura Kelly vetoed SB 361 on April 8, 2026, the Kansas legislature overrode the veto during its April veto session — with the House voting 85-38 and the Senate voting 29-10 — opting Kansas into the federal Scholarship Tax Credit (FSTC / ECCA / §25F) program. Kansas families will be eligible for scholarships when the program goes live January 1, 2027.
- State action·
Wisconsin Gov. Evers vetoes FSTC / ECCA opt-in bill (AB 602)
On March 30, 2026, Wisconsin Governor Tony Evers vetoed Assembly Bill 602, which would have required Wisconsin to opt in annually to the federal Scholarship Tax Credit (FSTC / ECCA / §25F). Wisconsin families will not be eligible for FSTC scholarships in 2027 unless the legislature overrides or the governor reverses course.
- State action·
Minnesota Gov. Walz declines to opt Minnesota into the Federal Scholarship Tax Credit
On March 24, 2026, Minnesota Governor Tim Walz said opting Minnesota into the federal Scholarship Tax Credit (FSTC / ECCA / §25F) is “never going to happen.” His earlier supplemental budget had tied participation to ending longstanding state nonpublic pupil and transportation aid.
- State action·
Kentucky legislature overrides Gov. Beshear's veto of FSTC opt-in bill
Kentucky's legislature overrode Governor Andy Beshear's veto of HB 1 on March 17, 2026, opting Kentucky into the Federal Scholarship Tax Credit (FSTC / ECCA) program despite the governor's objection.
- State action·
Florida Gov. Ron DeSantis opts Florida into the Federal Scholarship Tax Credit
Florida Governor Ron DeSantis announced on January 28, 2026 that Florida will participate in the Federal Scholarship Tax Credit (FSTC / ECCA / §25F) program, joining the growing list of states opted in for the January 2027 program launch.
- State action·
Arizona Gov. Katie Hobbs vetoes FSTC / ECCA opt-in bill (SB 1106)
Arizona Governor Katie Hobbs vetoed SB 1106 on January 16, 2026, blocking the state's participation in the Federal Scholarship Tax Credit (FSTC / ECCA / §25F) program. Hobbs cited a desire to wait for IRS regulations before committing.
- State action·
Virginia became the first state to opt in — now its new governor will decide whether to keep it
Outgoing Gov. Glenn Youngkin made Virginia the first state to formally opt into the federal Scholarship Tax Credit (FSTC / ECCA / §25F), effective January 1, 2026, days before leaving office. His Democratic successor, Abigail Spanberger, inherited the decision — making Virginia the first test of whether an opt-in survives a change of administration.
- Regulatory / IRS·
IRS releases Form 15714 — states can pre-elect §25F (FSTC) participation
On December 12, 2025, the IRS issued IR-2025-121 and released Form 15714 (Advance Election to Participate), which lets states declare their intent to participate in the §25F Federal Scholarship Tax Credit (FSTC) for calendar year 2027 ahead of submitting their full SGO list.
- State action·
Colorado Gov. Polis opts Colorado into the Federal Scholarship Tax Credit
On December 5, 2025, Colorado Governor Jared Polis announced Colorado will opt into the federal Scholarship Tax Credit (FSTC / ECCA / §25F) program. In a Colorado Sun interview, Polis called opting in a “no-brainer” and said he would “be crazy not to” take the federal credit for Colorado families.
- Regulatory / IRS·
IRS issues Notice 2025-70 requesting public comment on §25F (FSTC) implementation
In November 2025, the IRS issued Notice 2025-70 requesting public comment on implementation of the new §25F Federal Scholarship Tax Credit (FSTC), signaling the start of formal rulemaking ahead of the program's January 2027 launch.