New York is in: Hochul says the state will join the §25F scholarship credit for 2027

New York is in. On October 9, Gov. Kathy Hochul said the state will take part in the federal scholarship tax credit, the program created by IRC §25F that starts January 1, 2027. Since May she had said New York would participate "if, and only if, all schools and students, including those in our public schools, could benefit." After reviewing the regulations Treasury released on October 1, she says that test is met: the program can bring millions of dollars to New York students and families "without taking a single dollar from public schools or our state or local budgets." Her shortest line was the plainest: "I'm not going to leave money on the table when it could help our kids."

A public school pledge to go with it. Hochul said she has also been "directly engaging with business leaders," who she said have committed to use the program to support public school students and their academic needs. That is the model already taking shape elsewhere: in Colorado, public school foundations are forming their own SGOs, and in Connecticut, advocates have sketched a statewide SGO that partners with districts. Public school students can receive §25F scholarships, and the expense list the law borrows from Coverdell education savings accounts includes academic tutoring and special needs services (how districts are planning for it). "A student in the Bronx can get the speech therapy or counseling her school can't afford to provide," Nicole Pollock of Democrats for Education Reform told Chalkbeat.

Announced, not yet filed. The statement is a decision; the filing comes next. The IRS list of states that have made the 2027 advance election showed 30 states as of September 14, and New York is not on it yet. To be in for 2027, New York has to file its advance election on Form 15714 by January 1, 2027, then complete it by sending the IRS its list of qualifying scholarship granting organizations by February 15, 2027. A state in its first year can't elect by submitting a list alone, and an advance election that is never completed with a list leaves the state out for the year (the full calendar). Until the election is on file, our New York page shows the state as committed rather than opted in. It moves the day New York appears on the IRS list, which would make it the 31st state.

What New York's list has to look like. The statement doesn't say which agency will build the list. Treasury's temporary regulations, which take effect without a comment period and apply from September 1, 2026, set the frame for whoever does. The state must list every qualifying SGO located in New York 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)). "Located in" New York means authorized to do business in the state and in compliance with its general laws for charities; a New York headquarters is not required (one national standard).

Who it reaches. Scholarships go to K-12 students in households at or below 300% of area median gross income, and a New York student's scholarship has to come from an SGO on New York'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 Treasury's proposed rules, which may be relied on for 2027.

The decision was hers to make. The leaders of both legislative chambers and the United Federation of Teachers had urged Hochul to opt out, but New York's State Education Department said on October 7 that the decision rests with the governor. New York's Catholic bishops thanked her in a letter posted by the New York State Catholic Conference. Hochul is the second sitting Democratic governor to bring a state in by choice, after Colorado's Jared Polis. Others are close behind: Connecticut's Ned Lamont expects to decide within a month, and Pennsylvania's Josh Shapiro said on October 7 he would announce "in the next few weeks" (where every undecided governor stands).

For organizations. If you plan to fund New York students in 2027, start with the two things that make an organization "located in" New York under the rules: authorization to do business in the state and good standing under its charity registration laws. Then watch for the state's application, which has to come together fast, because the list is due at the IRS on February 15. The federal groundwork doesn't wait on Albany: 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 SGO directory shows who is already organizing.