A new §25F fund would pay New Jersey teachers to tutor public school students if Sherrill opts in

On Thursday, November 12, the New Jersey Policy Institute (NJPI) and ACE Scholarships announced the NJ Teachers Public School Tutoring Fund, a scholarship fund for the federal Education Freedom Tax Credit (§25F) in which every award pays for tutoring for a New Jersey public school student, taught by a New Jersey teacher who is paid for the work. NJPI is a New Jersey policy nonprofit. ACE is a Denver-based scholarship granting organization (SGO) that says it has awarded more than 135,000 scholarships since it was founded in 2000. Donors can sign up now at njpublicschoolsgo.com, and the credit they'd claim is up to $1,700 per taxpayer, or $3,400 for a married couple filing jointly when each spouse gives.

The fund starts serving students only after New Jersey opts in. That decision belongs to Gov. Mikie Sherrill, and she hasn't made it. To take part in 2027, a state has to file its advance election on Form 15714 with the IRS on or before January 1, 2027, under the temporary regulations (§ 1.25F-5T(c)(3)(i)(B)), which take effect without a comment period and apply from September 1, 2026.

What the partners said. “This is about New Jersey kids, New Jersey teachers and New Jersey towns,” said Wells Winegar, NJPI's executive director. “The teachers doing that work deserve to be paid for it.” Andy Mulvihill, who chairs NJPI's board and is a former vice president of the New Jersey State Board of Education, said that when New Jerseyans give through the fund, “their money stays in New Jersey.” ACE president Jason DiFraia said the two groups “plan to raise millions” and that ACE “will manage every gift, receipt and scholarship award.” The fund's first teacher ambassador is Rhiannon Mindas, a New Jersey public school teacher, and NJPI plans community portals so donors can give for their own town or school district. The fund's site says a single $1,700 gift can pay for about 25 hours of tutoring.

How a commitment works before New Jersey is in. Nothing given now earns a credit. Contributions count from January 1, 2027, and the fund's site calls today's sign-ups commitments that become creditable gifts only once the credit takes effect and New Jersey opts in; at that point, it says, donors will be reminded to complete the gift. New Jersey doesn't appear in ACE's donor portal yet, so the site tells donors to pick the option that splits a contribution among all eligible states per capita, and says a commitment made through the fund will go to New Jersey students once the state is in. The proposed regulations show why the state has to come first. A multistate SGO such as ACE keeps a separate §25F account for each state whose SGO list it is on, lets donors designate which of those states their gift goes to, and uses each account only for students who live in that state (proposed § 1.25F-3(c)(3) and (c)(7)). ACE is already on Alaska's list, approved October 2 (its listing). A New Jersey account becomes possible only after New Jersey elects in and puts ACE on its own list. If the state stays out, New Jersey residents can still claim the credit for gifts to SGOs in participating states, but the money would fund students there (what happens when a state stays out).

Why tutoring fits the credit. The expense list §25F borrows from section 530 covers “academic tutoring” for a student at a public, private or religious school (§530(b)(3)(A)(i)), and a public school student qualifies on the same terms as any other: the student must be eligible to enroll in a public school and live in a household with income no more than 300 percent of area median gross income (who qualifies). The proposed rules also give tutoring at high-poverty schools a shortcut. If a school in a HUD qualified census tract, or one that certifies at least 80 percent of its students live in such a tract, picks students for individual academic tutoring based on their need, the SGO can treat them as income-eligible without verifying household income (proposed § 1.25F-3(c)(6)(iii)(C)). An SGO that uses it needs an annual third-party audit, given to the state, certifying among other things that the tutors were qualified and that a professional not connected to the tutoring provider diagnosed each student's need. As proposed, the safe harbor speaks of individual tutoring. The fund describes small groups with regular progress checks, so for group sessions an SGO should plan on verifying income the usual way (how SGOs verify income) unless the final rules say otherwise. Paying the teachers is straightforward: an SGO may pay a provider directly if it has verified the provider as appropriate, the provider isn't related to the student, and the provider must refund any overpayment (proposed § 1.25F-3(c)(5)(iv)).

Where Sherrill stands. Sherrill's office hasn't said which way she is leaning. “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,” a spokesperson told NJ Spotlight News in a story published November 10, which also reported NJPI's plan to announce the fund. On October 22 she and the governors of California, Connecticut, Massachusetts and Michigan asked Treasury Secretary Scott Bessent for written answers, including on qualified expenses for public school students, before deciding on 2027, and Treasury hasn't replied. A fund that spends every scholarship on public school students speaks directly to that question, and the same day Treasury's acting tax policy chief said the government is reading the expense list as broadly as the statute allows. Earlier, in May, her office said she would evaluate the program once the rules were final, and a bill from Assemblyman Michael Inganamort would require New Jersey to take part. The IRS's published list names 30 participating states as of October 22, and our tracker counts 32 with New York and New Mexico, whose governors have decided to join but whose elections aren't on the IRS list yet.

What it means for SGOs. Public school groups in states that haven't opted in have mostly worked through district foundations or an SGO a superintendent builds, as in Rhode Island, Maryland and Illinois. New Jersey's fund takes another route: an established multistate SGO supplies the accounts and the receipts, and a state group supplies the local name and the teachers. In participating states the same idea is running at every size, from three Denver schools to Sioux Falls, Johnston County, North Carolina and the 41 Kentucky districts working with one statewide SGO. For an organization in a state that's still deciding, gathering commitments now and showing the governor a ready public school program puts it first in line if the answer is yes (how §25F works for public schools, how to start an SGO). New Jersey's status is on its state page, and SGOs already on official state lists are at /sgos/approved.