New York will take part in the federal scholarship tax credit, Gov. Kathy Hochul says
Gov. Hochul said on Oct. 9 that New York will join the credit of up to $1,700 for gifts to scholarship granting organizations, which starts Jan. 1, after reviewing the federal rules issued this month. Her statement does not say when the state will file its election or list the organizations.
Albany. New York will take part in the new federal tax credit for gifts to nonprofits that give scholarships to schoolchildren, Gov. Kathy Hochul said in a statement on Oct. 9. Ms. Hochul, a Democrat, had said earlier that she intended to join and was waiting for the Treasury Department's rules, Chalkbeat reported. Treasury and the Internal Revenue Service issued those rules on Oct. 1.
The credit, Section 25F of the Internal Revenue Code, starts Jan. 1, 2027. A taxpayer may claim up to $1,700 a year for cash gifts to a scholarship granting organization on a participating state's list. The organization must be a 501(c)(3) public charity, and its scholarships may go to families earning up to 300 percent of the area median income.
What the governor said
Ms. Hochul said that after a careful review of the federal regulations, the state believes the program could bring millions of additional dollars to New York students and families without taking money from public schools or from state or local budgets. She said business leaders had committed to use the program to support public school students and their academic needs.
“I’ve been clear from the start that New York would participate in the federal scholarship tax credit program if, and only if, all schools and students, including those in our public schools, could benefit.”
Her statement does not say when New York will file its election or send the IRS its list of organizations. Under the temporary rules, a state electing for 2027 files Form 15714 by Jan. 1, 2027, and may send its list by Feb. 15, 2027. Each organization must register in a new IRS portal. New York was not on the IRS list of participating states, last dated Sept. 14.
Who is for it and who is against
New York is the second state with a Democratic governor to opt in voluntarily, after Colorado under Gov. Jared Polis, according to Chalkbeat. The governor cannot choose which organizations take part or limit scholarships to low-income students, Chalkbeat reported. Michael Mulgrew, president of the United Federation of Teachers, said in a statement that giving up local control of public education to the federal government through what he called the Trump administration's private school voucher scheme was a failure of leadership.
The state's Catholic bishops, in a statement posted by the New York State Catholic Conference, thanked the governor. They said the scholarship organizations help families in public, religious, independent and charter schools with tuition, tutoring, special needs services, transportation and books, and that they expect the credit to bring significant giving to new and existing organizations serving Catholic school and public school students.
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 Oct. 11, 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.