Federal Scholarship Tax Credit

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Governor Hochul Intends to Opt In to the Federal Scholarship Tax Credit

A new federal program could dramatically expand educational opportunities for families across the country—including in New York. This program would help ease the burden on tuition-paying families at Catholic and other private schools, while also supporting public schools through a broad array of services. Governor Kathy Hochul has announced that she intends to opt New York into the new Federal Scholarship Tax Credit.

While this announcement is welcome news, the process is not yet complete. New York must still formally opt into the program once federal regulations are finalized to ensure students and families can benefit from this historic opportunity.

In the meantime, we encourage New Yorkers to learn more about the Federal Scholarship Tax Credit and continue showing their support for New York's participation. Together, we can help ensure this promising program becomes a reality for families across our state.

Read our statement here.

 

What Is the Federal Scholarship Tax Credit?

The federal scholarship tax credit is a new initiative designed to help families access the educational options that best meet their children’s needs. The program allows taxpayers to receive a 100% federal tax credit of up to $1,700 for donations made to nonprofit Scholarship Granting Organizations (SGOs). These organizations then distribute the funds as scholarships to eligible students. Any American taxpayer who owes federal income tax can qualify for this credit and redirect up to $1,700 to a SGO instead of paying that amount to the IRS. Unlike many government programs, this initiative relies on private donations rather than government spending.

Scholarships could be used for a variety of educational needs, including:

• School tuition

• Tutoring

• Special education services

• Education technology

• Academic supplies and other educational supports

The program has the potential to benefit millions of students nationwide if states choose to participate.

 

Who Could Qualify?

Eligibility for scholarships extends to families earning up to 300% of the regional median income, which could include more than 90% of K–12 students in many areas.

 

Does My Diocese Have an SGO?

Find your diocese below to see whether an SGO is available and learn how you can support educational opportunities for students in your community.

 

When Would the Program Start?

The federal scholarship tax credit is scheduled to take effect January 1, 2027.

 

What Happens Next?

The federal law requires each state to opt into the program. To participate, a governor must submit a list of approved Scholarship Granting Organizations (SGOs) to the U.S. Treasury Department each year. If New York does not opt in, taxpayers could still donate and receive the federal tax credit, but their donations must go to scholarship organizations in other states, benefiting students elsewhere instead of New York families. Whether New York families benefit rests solely on Governor Kathy Hochul.