EFTC in North Carolina
North Carolina is participating in the federal Educational Choice for Children Act scholarship program. Also known as the Federal Scholarship Tax Credit (FSTC), the program was enacted as IRC §25F and takes effect January 1, 2027.
- Governor
- Josh Stein
- Democrat
- Status
- Opted in
- As of 2026-06-03
- Program begins
- January 1, 2027
- Federal tax credit live
What EFTC means for North Carolina
Because Governor Josh Stein has opted North Carolina into EFTC, families in North Carolina will be eligible for scholarships funded through the program when it goes live on January 1, 2027. Designated Scholarship Granting Organizations (SGOs) in North Carolina will receive donations from federal taxpayers and distribute them as scholarships to qualifying K–12 students.
Donors in North Carolina — and anywhere else in the country — can claim a federal income tax credit of up to $1,700 per tax return for contributions to a qualifying SGO, beginning January 2027. The credit is non-refundable and capped, but it lets taxpayers redirect federal income tax that would otherwise go to the U.S. Treasury into scholarships for students in their own community.
North Carolina's participation means federal tax dollars contributed by North Carolina residents stay in North Carolina, supporting families here rather than flowing to scholarship organizations in other states.
Frequently asked questions about EFTC in North Carolina
Does North Carolina participate in EFTC?
Yes. Governor Josh Stein has opted North Carolina into the program (decision: 2026-06-03), making North Carolina families eligible for scholarships when the program begins on January 1, 2027.
Who is the governor of North Carolina and what is their position on EFTC?
Governor Josh Stein (Democrat) has opted the state in. Stein vetoed HB 87; the House overrode on May 20, 2026 and the Senate completed the override 30-19 along party lines on June 3, 2026, enacting the bill over the governor's objection. North Carolina is now opted in via legislative override (no gubernatorial action required).
Can North Carolina 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. North Carolina residents can give to SGOs in North Carolina and the scholarships will fund North Carolina students.
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.
Other states with the same status
States that have also opted in.
Recent North Carolina EFTC / FSTC news
Coverage of North Carolina’s Federal Scholarship Tax Credit decisions and developments.
- State action · 2026-06-03North Carolina Senate completes veto override — NC opts into the federal Scholarship Tax CreditOn June 3, 2026, the North Carolina Senate voted 30-19 along party lines to complete the override of Governor Josh Stein's veto of House Bill 87, enacting the bill into law and opting North Carolina into the federal Scholarship Tax Credit (FSTC / ECCA / §25F). It is the third state to join through a legislative veto override.
- State action · 2026-05-20North Carolina House overrides Gov. Stein's veto of FSTC opt-in bill (HB 87)On May 20, 2026, the North Carolina House voted 73-46 to override Governor Josh Stein's veto of House Bill 87, which would opt North Carolina into the federal Scholarship Tax Credit (FSTC / ECCA / §25F). The Senate must still vote to complete the override; Republicans hold the votes to do so.
Learn more about EFTC
In-depth guides on how the program works, who qualifies, and how to participate.
- What is ECCA / FSTC?A complete guide to the Educational Choice for Children Act (ECCA), also known as the Federal Scholarship Tax …
- The federal tax credit, explainedHow the Education Freedom Tax Credit (EFTC / §25F) works for donors: $1,700 per tax return, 5-year carryforwar…
- Scholarship eligibilityWhich K–12 students qualify for EFTC scholarships, the income limits, what schools and educational expenses ar…
- How states opt inHow a state opts in to the federal EFTC scholarship program: the governor's annual Treasury submission, legisl…
- EFTC for special-needs familiesHow families of K–12 students with disabilities can use EFTC scholarships to fund therapies, specialized instr…
- EFTC for homeschool & microschoolHow homeschoolers, microschool families, learning pods, and hybrid-school families can use EFTC scholarships, …
Thank Governor Stein for opting North Carolina in
A short note of thanks from a constituent goes a long way — and reinforces that participation matters to families in your state.
Contact Governor Stein →