New York Educational Opportunities Coalition
Expanding Educational Opportunity for New York Families Through the Federal Scholarship Tax Credit (FSTC)
The New York Educational Opportunities Coalition is a growing statewide coalition of organizations, schools, scholarship programs, community leaders and businesses working together to encourage New York State to opt into the federal scholarship tax credit program. This action will enable families, schools and scholarship organizations to prepare for its effective date of January 1, 2027.
This historic federal initiative could bring hundreds of millions of additional education dollars from charitable donations into New York State to support students and families — at no cost to the state budget. Our goal is simple: to ensure New York families are able to benefit from this opportunity. We believe this effort will be strongest if it reflects broad support from parents, organizations and community leaders who care about educational opportunities for children across New York State.
What Is the FSTC and Who Could Use FSTC Scholarships?
The Federal Scholarship Tax Credit allows individual taxpayers beginning on January 1, 2027 to receive a 100% dollar for dollar tax credit against federal individual income taxes for donations made to eligible nonprofit scholarship granting organizations (SGOs). These organizations can then provide scholarships for a wide variety of eligible educational expenses to support students in K-12 education, in both public and non-public school settings.
Taxpayers can donate up to $1,700 annually to SGOs.
For students to benefit from these scholarships, federal law gives discretion to governors of states (or duly authorized state officers or entities) to decide whether their respective states participate in this federal scholarship program. State participation requires they take action to allow SGOs to operate, commonly referred to as “opting in.”
All students in public and non-public schools, from households with incomes not to exceed 300 percent of the area median family income would be eligible to benefit. The income ceilings for 2026 are provided by the U.S. Department of Housing and Urban Development here.
Scholarships funded by “qualified contributions” under this federal law, that would secure the 100 percent tax credit, could fund tutoring, technology, special education services, enrichment programs, transportation, tuition and other eligible educational expenses described in section 530(b)(3)(A), known as Coverdell education savings accounts.
The federal scholarship tax credit will:
- Bring significant new educational investment into New York communities with additional scholarship funding for students in public and non-public schools.
- Support students across a wide range of educational settings: district public schools, charter public schools, independent and religious schools, and homeschools.
- Expand access to tutoring, enrichment, after-school programs and specialized services.
- Help families access educational opportunities that best meet their children’s needs.
Keep in mind:
- There is no cost to state or school district budgets; rather, this measure puts more money in the hands of families to be spent on their children’s education in all school settings.
- Failure to opt in will result in millions of dollars in New York taxpayer donations benefitting children in other states that do opt in, since taxpayers can give to any eligible SGO in any state that has opted in.
- According to Education Reform Now, if just 15 percent of eligible New York taxpayers make annual donations of $1,700 and take the tax credit, more than $750 million will be available for K-12 students; if 30 percent of taxpayers donate that maximum, over $1.5 billion will benefit New York students. (Otherwise, New York taxpayers can donate these funds to help children in other states).
Why Should New York Opt-In to the FSTC?
A broad coalition of organizations and leaders across the country, in both Republican and Democrat-led states, are already working to implement the program. Colorado Governor Jared Polis became the first Democratic governor to officially opt his state into the federal tax credit in January.
In early May, Governor Kathy Hochul publicly stated her support for the program, however she is waiting for the Treasury Department’s regulations before she makes her support official, so we cannot afford to take a New York State opt-in for granted.
What it Means to Join the Coalition
Joining the coalition demonstrates support for expanding educational opportunity in New York and a willingness to help raise awareness in ways that fit your organization’s mission and capacity. Coalition members commit to:
Participation may look different for each organization, and coalition members are encouraged to engage at the level that best fits their mission and capacity.
We are currently inviting organizations and leaders across New York State to join the New York Educational Opportunities Coalition.
Together, we can help ensure New York families have access to the opportunities made possible through the federal scholarship tax credit.
New York Educational Opportunities Coalition
