New York Governor Plans to Opt State into Federal Scholarship Tax Credit Program

The federal scholarship tax credit, part of the FY2025 Reconciliation Act signed by President Donald Trump and dubbed the “One Big Beautiful Bill Act,” offers a credit of up to $1,700 for contributions to approved scholarship-granting organizations (SGOs). Scholarships may cover tuition, fees, tutoring, supplies, after-school programs and transportation; the credit appears on 2028 tax returns and launches Jan. 1, 2027. Eligibility covers households earning up to 300 % of local median income, capped at $309,000 for New York City families. There is no statutory limit on scholarship dollars a family may receive, SGOs may raise unlimited funds, and more than 20 states have opted in, making New York the prospective 31st participant.

Governor Hochul May Opt NYS Into Federal Scholarship Tax Credit

Gov. Kathy Hochul supports the credit but will review federal details for “poison pills” that could harm New York’s education system, a stance echoed by her spokesperson. The UJA-Federation of New York called the program a “significant opportunity” to ease tuition costs for Jewish families and praised Hochul’s leadership. Teach Coalition described the credit as “game-changing” and Agudath Israel of America said it culminates a decade-long campaign.

Ed Source

The United Federation of Teachers, New York State United Teachers and GOP nominee Bruce Blakeman argue the credit could divert students and public dollars from schools, labeling it a “school-choice” scheme that threatens public-school funding.

Hochul Fends Off Critics Over Tax Credit Program That Helps Families Pay for Private School

Sources differ on the number of states opting in—“more than 20” versus New York as the 31st—and on eligibility, describing thresholds as either “under 300 % of an area’s median income” or a $309,000 NYC ceiling, with Treasury rules pending.

Governor Hochul May Opt NYS Into Federal Scholarship Tax Credit

• “This is a huge development and an important step forward for our school community and for all families working hard to afford a high-quality Jewish education and seeking some meaningful relief,” — Rabbi Binyamin Krauss, principal, SAR Academy

Governor Hochul May Opt NYS Into Federal Scholarship Tax Credit

• “For almost every family in our community, tuition is their largest expense and this is finally a benefit that includes the middle class,” — Rabbi A.D. Motzen, national director of government affairs, Agudath Israel

Governor Hochul May Opt NYS Into Federal Scholarship Tax Credit

• “And no funding comes from the state. It is all federal. Nothing will take away from the public school funding,” — Sydney Altfield, CEO, Teach Coalition

Governor Hochul May Opt NYS Into Federal Scholarship Tax Credit

• “it’s not public dollars that could have been going to public schools are now going to private schools. It’s just not how it works.” — Governor Kathy Hochul

Hochul Fends Off Critics Over Tax Credit Program That Helps Families Pay for Private School

If adopted, the credit could give families across public, private and charter schools financial relief for tuition, tutoring and services, with supporters saying it supplements state funding and critics fearing a shift from public schools.

Hochul Fends Off Critics Over Tax Credit Program That Helps Families Pay for Private School

Gov. Hochul is expected to issue an opt-in after reviewing Treasury regulations; State Sen. John Liu may draft legislation to block participation if restrictions appear detrimental, and New Jersey, Pennsylvania and Connecticut have yet to decide.

Hochul Fends Off Critics Over Tax Credit Program That Helps Families Pay for Private School