(The Lion)–The federal government is allowing states that want to participate in the new federal school choice program to opt in as early as next month, giving their scholarship-granting organizations a full year to prepare for the program.
The Treasury Department and the Internal Revenue Service announced late last week that starting Jan. 1, 2026 – one year before the program takes effect – states can submit a form indicating their participation without listing approved scholarship-granting organizations, or SGOs.
Participating states must ultimately list eligible SGOs, which will receive funds from taxpayers and distribute them to qualified K-12 students, but states making an “advance election” will not have to do so on that initial form, the government said in a release.
The federal tax credit scholarship program was signed into law on Independence Day as part of the One Big, Beautiful Bill Act. A $1,700 tax credit will be available to taxpayers in every state who contribute to approved SGOs, but scholarships may be awarded only to students in states that choose to participate.
“For contributions to an SGO to be eligible for this credit, the SGO must be listed on a state list of one or more covered states for the applicable calendar year,” the government agencies said. “A covered state is defined as one of the states, or the District of Columbia, that, for a calendar year, voluntarily elects to participate in the credit and identifies SGOs in the state.”
Once active, the scholarships will be available to families earning up to 300% of the area median income. That could be as much as $585,600 for a family in Northern California’s Silicon Valley, or as low as $113,100 for a family in South Dakota’s Pine Ridge Reservation, according to an interactive map created using Housing and Urban Development estimates (click here to check your area).
The funds may be used for qualified education expenses such as private school tuition, homeschooling supplies and tutoring. Public school students and students with special needs are also eligible – a provision that may encourage blue states, which have been more resistant to school choice, to opt in.
Some red states, including Texas and Nebraska, have indicated a willingness to participate, while several blue states have said they will not. Many states – and scholarship-granting organizations – are reportedly waiting to see the program’s final rules before opting in.
Through Dec. 26, the government is soliciting public input on the program’s rules, a process that could take about six months to complete, one expert told The Lion.
School choice has spread to 35 states and has more than 1.3 million participants.
