27 States Enroll in Trump's Federal Scholarship Tax Credit Program; 23 States Remain Uncommitted
The IRS announced that 27 states have opted into the Federal Scholarship Tax Credit (FSTC) program, which allows taxpayers to claim up to $1,700 in federal tax credits for donations to education scholarship organizations. The program, created under Trump's One, Big, Beautiful Bill Act, enables families earning up to 300% of area median income to use scholarships for private school tuition, tutoring, and other educational services. The program matters because it represents a significant expansion of education choice options, though 23 states have not yet participated, potentially directing scholarship funding away from non-participating states.
The IRS announced Monday that 27 states have formally elected to participate in the Federal Scholarship Tax Credit program, which allows eligible taxpayers to claim dollar-for-dollar federal income tax credits up to $1,700 for donations to Scholarship Granting Organizations (SGOs). The program, created under President Trump's One, Big, Beautiful Bill Act, enables families earning up to 300% of their area's median gross income to access scholarships for private school tuition, tutoring, career training equipment, and other qualifying educational expenses. Participating states include Alabama, Alaska, Arkansas, Colorado, Florida, Georgia, and 21 others, while 23 states including California, New York, Illinois, and Massachusetts have not yet joined. Although states are currently opting in, donations eligible for tax credits will not begin until January 1, 2027, with taxpayers receiving credits when filing 2028 tax returns. Notably, taxpayers in non-participating states can still donate to scholarship organizations in participating states and receive the federal tax credit, though this means scholarship funding flows to students in other states rather than remaining in their home communities.
What's missing
The coverage does not explain the policy rationale behind why some states have declined participation or the substantive policy disagreements between participating and non-participating states. Additionally, there is limited discussion of how this program relates to existing education tax credit programs or its projected fiscal impact on federal revenues.
How coverage differed
Newsweek's coverage presents the program neutrally with factual details about participation and mechanics, while the framing emphasizes the program's expansion of 'education choice' without substantial criticism. Sources advocating for broader state participation (EFTC Credit) are quoted, but coverage does not include perspectives from critics who view such programs as potentially undermining public education funding.
What different sources said
- NewsweekCenter
27 States Signed Up for Trump's New School Tax Credit—Here's Who Hasn't
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