EFTC in California
California has not yet announced a decision on the federal scholarship tax credit program. Also known as the Federal Scholarship Tax Credit (FSTC), the program was enacted as IRC §25F and takes effect January 1, 2027.
- Governor
- Gavin Newsom
- Democrat
- Status
- No decision yet
- Program begins
- January 1, 2027
- Federal tax credit live
What's at stake for California
Governor Gavin Newsom has not yet announced a decision on whether California will opt in to the federal Educational Choice for Children Act (EFTC). The program goes live on January 1, 2027, and governors must submit a list of qualifying Scholarship Granting Organizations (SGOs) to the U.S. Treasury by January 1 of each participating year.
If California opts in, families across the state will be eligible for scholarships funded through the program, and federal tax dollars contributed by California donors will stay in California communities. If California does not opt in, donors here can still claim the federal tax credit by giving to SGOs in other states, but those scholarships will go to students elsewhere.
California residents, parents, educators, and taxpayers can let Governor Gavin Newsom know they want California to participate. The decision is annual: even if a governor declines initially, future years remain open.
Frequently asked questions about EFTC in California
Does California participate in EFTC?
Not yet decided. Governor Gavin Newsom has not announced a decision. Governors can opt in by submitting a list of qualifying Scholarship Granting Organizations (SGOs) to the U.S. Treasury by January 1 of each year.
Who is the governor of California and what is their position on EFTC?
Governor Gavin Newsom (Democrat) has not yet announced a decision.
Can California residents donate to an SGO and claim the federal tax credit?
Beginning January 1, 2027, any U.S. taxpayer can claim a federal income tax credit of up to $1,700 per tax return for donations to a qualifying Scholarship Granting Organization, regardless of the state they live in. Because California has not yet opted in, donations from California residents would need to go to SGOs in opted-in states, funding scholarships for students in those states rather than in California.
When does the EFTC program begin?
The Educational Choice for Children Act program begins on January 1, 2027. Donations made on or after that date are eligible for the federal tax credit. Each participating state's governor must submit a list of qualifying Scholarship Granting Organizations to the U.S. Treasury by January 1 of each participating year.
Becoming an SGO in California
California has not opted into the federal §25F credit, so there is no SGO certification pathway here yet. If California opts in, an organization would need to meet the federal requirements that apply in every participating state:
- Be a 501(c)(3) nonprofit that is not classified as a private foundation.
- Spend at least 90% of the income you receive on scholarships, the remaining 10% is the only budget for all administration, including fundraising.
- Award scholarships to 10 or more students who attend more than one school.
- Do not earmark or reserve contributions for a specific, named student.
- Serve students in households at or below 300% of area median gross income.
- Appear on your state's certified SGO list, which the state submits to the U.S. Treasury.
Follow California’s status above, and see how to start an SGO to prepare in the meantime.
Scholarship Granting Organizations in California
Our directory tracks the Scholarship Granting Organizations running today’s state tax-credit scholarship programs, the organizations most likely to administer the federal EFTC once official §25F lists are certified.
Browse the national SGO directory →Other states with the same status
States that have also no decision yet.
Recent California EFTC / FSTC news
Coverage of California’s Federal Scholarship Tax Credit decisions and developments.
- State action · June 24, 2026The biggest prize in §25F is still on the table: a new California resolution urges Newsom to opt in and claim up to $4.9 billion in scholarships
- State action · February 11, 2026California students mount a “Purple Postcard” campaign pressing Newsom to opt into the federal §25F scholarship credit
Learn more about EFTC
In-depth guides on how the program works, who qualifies, and how to participate.
- The real obstacle isn't politics, it's adoptionOnce a state opts in and the program is live, the question that decides whether the Education Freedom Tax Cred…
- Get the credit in your paycheck, not the refundMost people assume a January 2027 donation means waiting until the April 2028 refund to see the $1,700 back, r…
- The CPA's guide to §25FA practitioner's reference to IRC §25F (the EFTC / ECCA / FSTC): the $1,700 dollar-for-dollar credit, why it w…
- Year-end planning: which December mattersThe Education Freedom Tax Credit takes effect January 1, 2027, which turns the usual year-end playbook upside …
- The EFTC, explained for your communityA plain-language, forward-it-to-anyone explainer of the new federal scholarship tax credit: what it is (up to …
- Designating your gift to a schoolSection 25F bans earmarking a donation for any particular student, and that ban is exactly as wide as it sound…
Make your voice heard in California
Contact Governor Gavin Newsom and let them know that California families want access to EFTC scholarships when the program begins January 2027.
Contact Governor Newsom →
Get EFTC updates in your inbox
Stay updated on opt-in votes, guidance, and deadlines as the January 2027 launch approaches.