Gov. Ferguson expects to announce Washington's §25F scholarship tax credit decision before January 1

Washington should have its answer by January 1. Gov. Bob Ferguson still hasn't said whether the state will join the federal scholarship tax credit (§25F) for 2027, but he has now put a date on the decision. “We just got the actual rules, which matter for how these can be implemented, and so we're taking a close look at those rules,” Ferguson told KOMO News in a report published November 6. “We've got lawyers taking a look at it. Sometimes the rules aren't quite as clear as we'd like it to be.” He expects to announce a decision before January 1, 2027, KOMO reported. That's the last day Washington can file its advance election to take part in 2027.

From final rules to a firm date. In September, his office told the Washington State Standard that Ferguson would not decide until the final rules were available. Treasury released proposed and temporary regulations on October 1, and a Treasury official said final regulations probably won't be in place until 2028, so waiting for them would have meant sitting out 2027. His office says his position hasn't changed. “He has made it clear we would review the rules thoroughly before making a decision. Now that we have the rules, that review is underway,” spokesperson Brionna Aho told The Seattle Times in late October. What's new is the date. A decision before January 1 is a decision on the rules already out: the temporary regulations, which take effect without a comment period, apply from September 1, 2026 and govern how a state elects and lists its SGOs, and the proposed regulations, which states, donors and SGOs may rely on for 2027.

His test is public school students. Ferguson also said it “matters a great deal” that any program Washington uses benefits public school students, KOMO reported. Critics say a state can't promise that. State Superintendent Chris Reykdal wants Congress to give states more authority over how scholarships are used, and the Spokane Public Schools board, in a November 2 letter asking Ferguson to decline, objected that Washington couldn't confine the program to groups serving public school students, KHQ reported. At the state level, that's right. A participating state may not require SGOs to operate more restrictively than §25F, “such as by limiting the type of school that scholarship recipients may attend” (temporary § 1.25F-5T(e)(2); one national standard). An SGO, though, gets to choose. Treasury's proposal says any SGO “may narrow its own focus and adopt more stringent requirements,” and the example it gives of an SGO that specializes is one offering “academic tutoring for qualified students in public schools.”

The rules already make room for school-based tutoring. Academic tutoring is one of the expenses on the Coverdell list that §25F scholarships can pay for (what's covered). Treasury's proposed rules, which may be relied on for 2027, add a safe harbor written for it. When an SGO funds individual academic tutoring, or special needs services, for students their school selects based on need, at a school in a HUD qualified census tract or one that certifies at least 80% of its students live in one, those students count as income-eligible without a household income check (proposed § 1.25F-3(c)(6)(iii)(C); how the tutoring safe harbor works). The SGO needs an annual third-party audit to use it. The money pays for the student's tutoring, not a district's budget: an SGO pays the school or a verified, unrelated provider directly, or reimburses a family against a receipt (proposed § 1.25F-3(c)(5)). That's the point behind Reykdal's line to KOMO: “Our school districts don't get the money.” They don't. The scholarship goes to a student's tutor or school.

Washington groups are lined up to use it. Mike Preiner leads The Math Agency, a Washington nonprofit that provides small-group academic coaching in Seattle-area schools. He told KOMO the program could expand tutoring in public schools and argued that SGOs could focus donations on public school students who need tutoring; Washington's participation, he said, would make local organizations eligible for tax-credit donations. The Math Agency belongs to the Washington Student Success Coalition, along with the Alliance for Education, a charity focused on Seattle Public Schools, Big Brothers Big Sisters of Puget Sound and the College Success Foundation, The Seattle Times reported. Coalition advocates have described the potential as roughly $1 billion a year, and Democrats for Education Reform estimates about $750 million a year if 15% of eligible taxpayers take part. In Spokane County, the Mead School District board voted unanimously on October 26 to ask Ferguson to opt in, and during Education Secretary Linda McMahon's October 19 visit to Spokane Valley, Rep. Michael Baumgartner, R-Spokane, said local groups that already raise money for public school students, such as the West Valley Education Foundation, could become SGOs if Washington joins, The Spokesman-Review reported.

Where a Washington donor's gift goes. Requests from Olympia go back to January's House Joint Memorial 4013. The latest came from state Sen. Leonard Christian, a Republican who represents Spokane County's 4th Legislative District. Writing in The Daily Herald on November 9, he said he had led several Senate Republican colleagues in a letter urging Ferguson to opt in, and that he and his wife, Rima, plan to give $3,400, the most a married couple can claim when each spouse gives. If Washington stays out, he wrote, they'll direct it to a participating state such as Texas, where their grandchildren live. “This is not about public versus private or conservative versus liberal,” he wrote. The mechanics bear him out. Washington residents can claim the credit whatever Ferguson decides, by giving to an SGO in any participating state, but scholarships follow the student's home state, so without Washington in, that money funds students somewhere else (how an opt-out moves the money).

What happens next. Washington's deadline for 2027 is January 1. A yes means filing Washington's advance election on Form 15714 through the IRS's FSTC State Portal, then sending the IRS a list of SGOs by February 15, 2027 that includes every qualifying organization located in Washington that asks to be on it (the full calendar). An advance election that's never completed with a list leaves the state out for the year (temporary § 1.25F-5T(c)(3)(ii)(C)). If January 1 passes without a filing, Washington sits out 2027. Either way the question comes back, because a state elects one calendar year at a time, and a state that makes its first election for 2028 or later will file under procedures the IRS has said it will set in future guidance. Our Washington page will carry the decision the day it's announced.

Where the other states stand. Thirty-two states are in for 2027 on our tracker: the IRS's 30 plus New York and New Mexico, whose governors have decided but whose advance elections aren't on the IRS list yet. Two Democratic governors said yes after reviewing the same rules Ferguson's lawyers are reading. New York's Kathy Hochul joined on October 9, and New Mexico's Michelle Lujan Grisham, whose office had said no in August 2025, reversed course on November 4, and her office called it “a new public school funding opportunity.” Washington is one of 15 jurisdictions still deciding, and five other undecided governors sent Treasury written questions on October 22. Next door, Idaho is in, and Oregon Gov. Tina Kotek declined in June.

For organizations. If Ferguson says yes late in December, Washington will have about six weeks to open an application and send its list by February 15, so the groundwork is worth doing now. An organization is “located in” Washington if it's authorized to do business there and complies with the state's charity laws; no Washington headquarters is needed. The federal requirements don't wait on the governor: 501(c)(3) status, governing documents that expressly require the §25F operating rules, a segregated §25F account, and a plan to fund at least 10 students who don't all attend the same school. The free SGO Builder walks through each step, and our guide to §25F for public schools covers district foundations and school-based tutoring programs.