Lamont says Connecticut will decide on §25F “within a month or so,” well ahead of the January 1 deadline

Connecticut now has a timeline. Gov. Ned Lamont told reporters on Tuesday, October 6, that he would ask federal officials for further clarification on the federal Education Freedom Tax Credit (§25F) that week, the Connecticut Mirror reported on October 8. “I think we'll know within a month or so,” Lamont said. In May he called an opt-in “premature” and said he wanted to see federal guidance first. That guidance arrived on October 1, when Treasury released the proposed and temporary §25F regulations, and Lamont is now working through them with a short list of conditions. “I want to make sure this does not discriminate in any way against public education,” he said, adding that the program should be transparent and carefully audited “given all the back-and-forth we have about not-for-profits.”

The calendar works. A month from October 6 lands in early November, comfortably inside the window. Under temporary regulation § 1.25F-5T(c)(3)(i)(B)(1), a state that wants to participate in 2027 files Form 15714 with the IRS on or before January 1, 2027, then completes the election by sending its list of scholarship granting organizations by February 15, 2027 (the full §25F calendar). The election is made by the governor or whoever state law designates. Connecticut also votes for governor on November 3, and Lamont's Republican opponent, Sen. Ryan Fazio of Greenwich, has called the credit “literally free money” for the state. The next term begins January 6, 2027, after the Form 15714 deadline, so the 2027 decision is Lamont's either way.

What the rules say about Lamont's two tests. On public education: a §25F scholarship is not limited to private tuition. A child qualifies if household income is at or below 300% of area median gross income and the child is eligible to enroll in a public school, and qualified expenses come from the Coverdell list in section 530, which includes tutoring and special needs services; Treasury's detailed guidance on that list is still to come. On audits: the proposed rules require every SGO to undergo an annual financial and programmatic audit by a qualified independent third party and send the results to each state that listed it. The temporary rules also require a participating state to impose application, documentation and financial reporting requirements reasonably tailored to confirm that an organization qualifies. What a state may not do is run the program more restrictively than §25F itself, for example by limiting which schools recipients attend.

A public-school design is already on the table. Nicole Pollock of Democrats for Education Reform laid one out for the Mirror. “The way I think about design is, you should have a statewide SGO, or a collection of public school-serving SGOs, that focus on a particular goal for the state,” such as early literacy, she said. “And then that organization partners with LEAs [Local Education Agencies] and raises money.” She pointed to Colorado, where public school groups are forming SGOs that partner with districts, and suggested bringing a state's largest employers in to offer giving through payroll. The proposed rules allow that: an after-tax payroll deduction counts as a cash contribution. Pollock also said the Treasury guidance “creates more of a regulated market” that makes it easier for high-poverty districts and students to participate, pointing to the income-verification safe harbors for students in programs such as SNAP or TANF, for foster children, and for tutoring or special needs services at schools in qualified census tracts.

The opposition hasn't moved. “I think [the rules] solidified for me exactly what we always knew: that this was a program that is going to be designed to hurt public education and basically help the rich,” said Jan Hochadel, president of AFT Connecticut. Fran Rabinowitz, executive director of the Connecticut Association of Public School Superintendents, said forming a nonprofit takes time and money; one she set up with a foundation in Bridgeport “took nearly a year.” That is the practical argument for public school groups to start now rather than after the governor decides. Colorado's district foundations each formed a separate nonprofit for the SGO, in part because the 90% test applies to an organization's whole income unless scholarships make up at least 85% of its activities.

For Connecticut donors and organizations. Connecticut residents can claim the credit in 2027 whatever the state decides, up to $1,700 per taxpayer or $3,400 for a married couple when each spouse gives, by giving to an SGO in a participating state. Funding Connecticut students is different: an SGO's scholarships go only to students who live in a state that listed it, so without an election Connecticut children are left out. That is how an opt-out moves the money out of state. Track the decision on our Connecticut page, see how the election works in the opt-in explainer, and read what §25F allows for public school students. Groups getting ready can work through formation step by step with the free SGO Builder, and other governors on the same clock are in our governors roundup.