New Mexico opts into the federal scholarship tax credit, and the state now has to certify charities to run it
Gov. Michelle Lujan Grisham reversed her January decision on Nov. 4. New Mexico has no scholarship granting organizations yet, and the state must send the IRS its list of approved ones by Feb. 15, 2027.
Santa Fe. New Mexico will take part in the federal tax credit for gifts to nonprofits that give scholarships to schoolchildren, Gov. Michelle Lujan Grisham announced on Nov. 4, reversing the position she took against the program in January. The Santa Fe New Mexican counted New Mexico as the 32nd state to join; the IRS list of participating states, last updated Oct. 22, names 30 and does not yet include it.
Starting Jan. 1, 2027, an individual may claim a credit of up to $1,700, or $3,400 for a married couple filing jointly, for cash contributions to a scholarship granting organization on a participating state's list. The scholarships go to students from households earning no more than 300 percent of the area median income.
A list to build from nothing
New Mexico has no scholarship granting organizations, the New Mexican reported, so the state must now find and certify them. Under the IRS's instructions, the governor or an authorized delegate reviews each organization the state lists and confirms that it is a 501(c)(3) public charity, not a private foundation, that it is located in the state, that it keeps contributions in a separate account where required and that it follows the rules on who may receive scholarships. For 2027, participating states must send their lists to the IRS by Feb. 15, 2027.
The New Mexico Public Education Department will lead the work. Janelle Taylor García, a department spokeswoman, told the New Mexican that the agency had reached out to education organizations in the state and would release more information on the program and the application process once it becomes available.
The rules for the credit are now in hand: the Treasury Department and the IRS published temporary and proposed regulations on Oct. 2.
Reactions
The state's two teachers unions, AFT New Mexico and the National Education Association of New Mexico, said in a joint statement that they would work against the decision under the next governor, Deb Haaland, who was elected on Nov. 3. State Rep. Rebecca Dow, a Republican from Truth or Consequences who had urged the governor in March to join, welcomed it.
“At a time of diminishing federal investment in education, New Mexico must take advantage of every dollar we can to bolster public education and continue our state's upward trajectory in literacy and student achievement.”
About this story
501c3.help wrote this story from the sources listed with it, not from material an organization sent. Our editors approved it on Nov. 6, 2026. Stories in The Nonprofit Herald are free, and nothing is asked in return. Editorial rules.
Found an error? Write to [email protected] and we will correct it.