New Mexico is in: Gov. Lujan Grisham opts the state into the §25F scholarship credit for 2027

New Mexico is in. On November 4, Gov. Michelle Lujan Grisham announced she will opt the state into the federal scholarship tax credit, the program created by IRC §25F that starts January 1, 2027. Her office called it “a new public school funding opportunity for literacy and math initiatives, after school programs, computer resources and more.” “At a time of diminishing federal investment in education, New Mexico must take advantage of every dollar we can to bolster public education and continue our state's upward trajectory in literacy and student achievement,” she said. “By participating in the FSTC, we will give New Mexico taxpayers the chance to keep some of their federal income taxes in New Mexico to support New Mexico students.” It's a turnaround. In January her office said New Mexico would not opt in, and in April her spokesman said she was “actively considering” it while she waited on Treasury, whose rules came out October 1.

The Public Education Department builds the list. The department “will establish a process for certification of SGOs in the coming weeks,” the release says, and organizations can apply once it publishes its guidelines. The administration “will certify all SGOs that meet the criteria, as required by law,” and plans to “identify the strongest SGOs possible to deliver high-quality instruction and other resources to New Mexico's public schools and families.” The first promise is the federal rule. Under Treasury's temporary regulations, which take effect without a comment period and apply from September 1, 2026, a state must list every qualifying SGO located in the state that asks, may not add rules more restrictive than §25F, and must require application, documentation and financial reporting “reasonably tailored” to the federal tests and to preventing fraud (§ 1.25F-5T(e)). So the second promise reads as a partnership goal rather than a filter, since the state can't leave a qualifying organization off its list. “Located in” New Mexico means authorized to do business there and in compliance with its charity laws; no New Mexico headquarters is needed (one national standard).

Public schools are the pitch. The release's examples are about public school students: “A student struggling in reading or math could receive tutoring, and a family could use a scholarship for a computer, educational software or internet access,” and public schools “stand to gain, with new support for supplemental programs that prepare students for college and careers.” Trey Smith, executive director of East Mountain Middle and High Schools, a public charter school, told the Albuquerque Journal that private schools will be well positioned to move first, because fundraising is newer for public schools. “But if we can get good at that, it can actually really benefit public schools, and I think a lot of donors want to help the public school system.” Bob Ippel, executive director of the New Mexico Association of Non-Public Schools, called it “one little step to help, especially people with less means, to be able to have the same options as everybody else.” Public school groups in other states are already organizing: 41 Kentucky districts have signed with one statewide SGO, and Colorado's public school foundations are forming their own.

Who it reaches. Scholarships go to K-12 students who are eligible to enroll in a public school and live in households at or below 300% of area median gross income, and under Treasury's proposed rules a New Mexico student's scholarship has to come from an SGO on New Mexico's list (scholarships follow the student's state). Donors anywhere can claim up to $1,700 per taxpayer for gifts to a qualifying SGO, or $3,400 on a joint return when each spouse gives under the proposed rules, which may be relied on for 2027. The release says participation won't cost New Mexico taxpayers or reduce state revenue, since the credit comes off federal income tax and creates no new state credit.

Announced, not yet filed, and the handoff matters. New Mexico isn't on the IRS list of participating states yet (30 states, as of October 22). To be in for 2027, the state files its advance election on Form 15714 by January 1, 2027, then completes it by sending the IRS its list of qualifying SGOs by February 15, 2027 (the full calendar). Deb Haaland, elected governor on November 3, takes office January 1. If the list hasn't gone in by then, sending it falls to her administration, and an advance election that is never completed with a list leaves the state out for the year (§ 1.25F-5T(c)(3)(ii)(C)). That's Virginia's position, where Gov. Youngkin filed the election and Gov. Spanberger decides on the list. A list can go in any time from October 1, 2026, Treasury reads §25F as allowing no revocation once a state's election is complete, and a state that has sent its list can still add organizations until February 15 (§ 1.25F-5T(d)(7)(i)). The release doesn't say when the department will send New Mexico's. Haaland's position on the credit hasn't been reported; Whitney Holland, president of AFT New Mexico, told the Journal she hopes Haaland “undoes this.”

The 32nd state on our tracker. Our New Mexico page now counts the state as opted in on the strength of the governor's decision, with the filing still ahead. That makes 32 on our tracker: the IRS's 30 plus New York and New Mexico, where the governor has decided and the advance election isn't on the IRS list yet. The states still deciding for 2027 have until the same January 1 deadline (where every undecided governor stands).

For organizations. If you plan to fund New Mexico students in 2027, start with what makes an organization “located in” New Mexico. If you're incorporated elsewhere, that's a certificate of authority from the Secretary of State ($25, with a good standing certificate from your home state dated within 30 days), plus registration with the New Mexico Department of Justice's charities unit, which it requires before you solicit in the state (New Mexico costs and steps). Then watch the Public Education Department for its certification guidelines. The federal groundwork doesn't wait for them: governing documents that expressly require the §25F operating rules, a segregated §25F account, and a scholarship process that funds at least 10 students who don't all attend the same school. Our free SGO builder walks through each step, and the New Mexico SGO page will track the state's process.