New York's 2027 opt-in stands: Sen. John Liu's S10734 would hand the §25F scholarship credit decision to the Board of Regents from 2028

New York's decision to take part in the federal scholarship tax credit in 2027 isn't affected by a bill filed in Albany on November 9. State Sen. John Liu (D-Queens), who chairs the Senate's New York City Education Committee, introduced S10734 with Sens. Jabari Brisport, Robert Jackson and Liz Krueger. It would make the state Board of Regents the only body that can decide whether New York takes part in the credit created by IRC §25F, and the only one that can decide which scholarship granting organizations go on the state's list. By its own terms, the bill applies to taxable years beginning on or after January 1, 2028. Liu told Chalkbeat it wouldn't stop public or private school students from receiving scholarships in 2027, the program's first year. Gov. Kathy Hochul's October 9 decision to bring New York in for 2027 is untouched. The bill is about 2028 and later.

What the bill says. Section 1 adds a new section 101-c to the state Education Law. It designates the Regents “as the sole entity authorized to make the election on behalf of the state” under §25F, and as “the sole entity to determine and provide the state's list of qualified scholarship granting organizations” to the Treasury. An election made by any other state officer, board or agency “is void and shall have no effect.” Section 2 amends the Tax Law so the commissioner of taxation and finance can't make or carry out an election unless the Regents have elected to participate. The Regents could write rules to put the law in place. Liu's office says the board would decide every year, which is how the federal program already works: a state elects one calendar year at a time.

Federal law lets a state pick who decides. Under §25F(g)(1)(B), the election “shall be made by the Governor of the State or by such other individual, agency, or entity as is designated under State law to make such elections on behalf of the State with respect to Federal tax benefits.” Treasury's temporary regulations repeat that rule (§ 1.25F-5T(c)(2)), and whoever sends a state's list has to certify that it has the authority to do so (§25F(g)(2)). A few states have already written the job into law. Tennessee's Public Chapter 720 has its commissioner of education make the election, and Tennessee is on the IRS list for 2027. Rhode Island's H7163, signed in June, requires an act of the General Assembly before the state can join. Liu argues that the Regents, a 17-member board chosen by state lawmakers, are better placed to decide than a governor because of their education expertise and independence, Chalkbeat reported. “Regardless of what the political arguments may be, this program is a matter of education policy best decided by the state Board of Regents,” he said (how states opt in).

Where the bill stands. S10734 was referred to the Senate Rules Committee the day it was introduced. No Assembly version has been filed: the Assembly's record of the bill lists no same-as bill, and none had appeared by November 10. To become law, it would have to pass both the Senate and the Assembly and then be signed by Hochul, who won re-election on November 3, or passed over her veto by two-thirds of each house. Liu first talked about legislation in May, the month Hochul first said she intended to join, the New York Daily News reported. Hochul's office stood by her decision. “Governor Hochul has been clear: she's not going to leave money on the table when it could help our kids, including those in public schools,” spokesperson Jonah Allon said. “We believe the Federal Scholarship Tax Credit program has the potential to bring millions of additional dollars to New York students and families without taking a single dollar from public schools or our state or local budgets.” Her office didn't say whether she would veto the bill, Chalkbeat reported.

The Education Department welcomed it. “We appreciate Senator Liu's commitment to preserving the independence of education policymaking and ensuring these important decisions remain where they belong, with those charged with protecting and strengthening education for all New Yorkers,” State Education Department spokesperson JP O'Hare said. On October 7, the department had said the decision rested with the governor (our October 9 story). Board of Regents Chancellor Lester Young didn't immediately respond to Chalkbeat, so the board hasn't said how it would decide. State Education Commissioner Betty Rosa set out her test at a state budget hearing in late January, eight months before Treasury released its rules: if the consequence was to “diminish our public sector,” she said, she didn't see how the department could support the program. Hochul read those rules and concluded that the program adds money for New York students without taking any from public schools.

2027 is New York's first test. Because a state elects one year at a time, 2028 is a new decision for New York whether or not this bill passes. Under Treasury's temporary regulations, which take effect without a comment period and apply from September 1, 2026, a state can make its 2028 advance election between January 2 and September 30, 2027, or elect by sending its list between October 1, 2027 and January 1, 2028. If S10734 became law before then, the Regents would make that call, with New York's first months in the program to judge by. As Chalkbeat noted, if public school districts use the money for special education, tutoring and other services, the Regents could face pressure to opt in rather than cut those programs. Some Long Island districts are already planning. At the Hicksville Board of Education's October 21 meeting, Superintendent Theodore Fulton called the program “a benefit for our taxpayers for a tax break while giving back to the school district,” and said there has been talk of a Nassau County SGO that several districts could share, the Long Island Press reported.

What happens next for 2027. Nothing in S10734 moves New York's 2027 dates. The state isn't on the IRS list of participating states yet (30 states, as of October 22). By January 1, 2027, New York files its advance election on Form 15714. The credit starts the same day. By February 15, 2027, New York sends the IRS its list of qualifying SGOs, which completes the election, and Treasury reads §25F as allowing no revocation once a state has completed its election for the year (the full calendar). The state hasn't named the agency that will build its 2027 list. Our New York page tracks each step.

For organizations. If you plan to fund New York students in 2027, work to the dates above. An organization is “located in” New York if it's authorized to do business in the state and complies with its charity laws; no New York headquarters is needed (one national standard). The federal groundwork doesn't wait for a state application: 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. Donors anywhere can claim up to $1,700 per taxpayer, or $3,400 on a joint return when each spouse gives, under Treasury's proposed rules, which may be relied on for 2027. Our free SGO builder walks through each step, and every state’s official list is in one place.