EFTC in New York
New York has announced it intends to participate in the federal Educational Choice for Children Act scholarship program but has not yet formally finalized its opt-in. Also known as the Federal Scholarship Tax Credit (FSTC), the program was enacted as IRC §25F and takes effect January 1, 2027.
- Governor
- Kathy Hochul
- Democrat
- Status
- Announced (not finalized)
- As of 2026-05-08
- Program begins
- January 1, 2027
- Federal tax credit live
What EFTC will mean for New York
Governor Kathy Hochul has publicly announced that New York intends to opt in to the federal Educational Choice for Children Act (EFTC), with the announcement coming on 2026-05-08. Hochul announced intent to opt in May 8, 2026 via her FY2027 budget proposal, but said she will review IRS guidance before formally finalizing; not yet certified.
The opt-in is not yet formally finalized. To complete it, New York must submit a list of qualifying Scholarship Granting Organizations (SGOs) to the U.S. Treasury by January 1. Once finalized, families in New York will be eligible for scholarships funded through the program when it goes live on January 1, 2027, and federal tax dollars contributed by New York donors will stay in New York communities.
Until New York certifies its participation, the commitment remains an announcement rather than a guarantee. New York residents, parents, and taxpayers can urge Governor Kathy Hochul to finalize the opt-in before the program begins.
Frequently asked questions about EFTC in New York
Does New York participate in EFTC?
Not yet finalized. Governor Kathy Hochul has announced that New York intends to opt in (announced 2026-05-08), but the state has not yet formally certified its participation. Once finalized, New York families will be eligible for scholarships when the program begins on January 1, 2027.
Who is the governor of New York and what is their position on EFTC?
Governor Kathy Hochul (Democrat) has announced the state will opt in but has not yet finalized it. Hochul announced intent to opt in May 8, 2026 via her FY2027 budget proposal, but said she will review IRS guidance before formally finalizing; not yet certified.
Can New York 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 New York has announced but not yet finalized its opt-in, donations from New York residents would need to go to SGOs in opted-in states, funding scholarships for students in those states rather than in New York.
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 New York
To operate as a Scholarship Granting Organization (SGO) in New York under the federal Education Freedom Tax Credit, an organization must meet the §25F requirements that apply in every participating state, plus anything New York adds on top. Here is the current picture.
Federal requirements (apply in every 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.
New York-specific requirements
New York has not published SGO requirements beyond the federal rules yet. Certification mechanics are gated on Treasury’s proposed §25F regulations, expected by the end of September 2026, so watch for New York’s application window to open after that.
Full walkthrough: how to start an SGO. The intake, income verification, receipting, and disbursement a compliant program needs can run on software built specifically for the §25F workflow.
Scholarship Granting Organizations in New York
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 →Recent New York EFTC / FSTC news
Coverage of New York’s Federal Scholarship Tax Credit decisions and developments.
- State action · July 7, 2026Kansas completes its federal §25F election: the IRS roster grows to 29, and Kentucky is now the last override state waiting to file
- Analysis · June 4, 2026Not a party-line story: where Democratic governors landed on §25F
- State action · May 8, 2026New York Gov. Hochul announces opt-in to Federal Scholarship Tax Credit (FSTC / ECCA)
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 New York
Contact Governor Kathy Hochul and let them know that New York families want access to EFTC scholarships when the program begins January 2027.
Contact Governor Hochul →
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Stay updated on opt-in votes, guidance, and deadlines as the January 2027 launch approaches.