120 Million Taxpayers Eligible for New School Choice Tax Credit

Ahead of a January 2027 deadline, 31 states have opted into the federal Education Freedom Scholarship Program, while 19 states and Washington, D.C. have not. Patrick Graff of the American Federation for Children explains that the program, created through the 2025 One Big Beautiful Bill Act, gives individual taxpayers a federal income tax credit of up to $1,700 annually for donations to certified scholarship-granting organizations. States including Colorado, Florida, Georgia, Louisiana, Nevada, New York, North Carolina, Ohio, Tennessee, Texas, and Virginia have opted in, while Hawaii, Minnesota, New Mexico, Oregon, Arizona, and Wisconsin have not, with Arizona Gov. Katie Hobbs and Wisconsin Gov. Tony Evers vetoing legislation that would have required participation, arguing it diverts funds from public education. Graff cites a new report finding that more than 120 million tax filers — three out of four taxpayers — have enough federal tax liability to claim the full credit, and he outlines a way for taxpayers to fund donations through paycheck withholding adjustments rather than paying $1,700 upfront. He projects that 10% taxpayer participation nationwide would generate $18.8 billion for scholarships, exceeding combined federal spending on Title I and IDEA special education programs, with funds going toward tuition, tutoring, special education services, and transportation costs for public, private, charter, magnet, and some homeschool students.