New York to Become 30th State in Federal Scholarship Tax Credit Program

New York is set to become the 30th state to join a federal scholarship tax credit program after Gov. Kathy Hochul indicated she will opt in. The move makes New York the second state led by a Democrat to embrace the initiative.

U.S. Education Secretary Linda McMahon announced the decision in a post on X. "Governor Hochul has indicated she will opt-in to the Education Freedom Tax Credit — what a win for students and families across New York!" McMahon wrote.

A spokesperson for Hochul's office confirmed the plan to Fox News Digital. "Governor Hochul is supportive of the federal tax credit scholarship and its potential to help New York students and schools," the spokesperson said. "Our office awaits information from the federal government on the program and will thoroughly review the details of the policy for poison pills that could harm New York’s education system."

The program, called the Federal Scholarship Tax Credit, became law in July 2025 as part of the "One Big Beautiful Bill" Act. Governors must opt in for residents to claim benefits. Taxpayers can get a dollar-for-dollar federal income tax credit of up to $1,700 for donations to Scholarship Granting Organizations. Those groups distribute funds to families with incomes up to 300 percent of their area's median gross income to cover private tuition, tutoring or specialized educational services. The first donations eligible for credits start January 1, 2027.

Colorado Gov. Jared Polis became the first Democrat to opt in, in January 2026. He told local media he "would be crazy not to" join, as it would help parents afford after-school or summer programs.

McMahon had pressed holdouts during a March appearance on "The Faulkner Focus." "I do believe that’s the only reason [they would refuse]," she said of partisan motives. "Why any governor would not opt into this is absolutely anathema to me."

Tommy Schultz, CEO of the American Federation for Children, praised the decision. "Finally, school choice is coming to New York, thanks to the courage of Governor Hochul and the tremendous advocacy of countless families," Schultz told Fox News Digital. "We celebrate alongside every family who will soon, finally, have a chance to access an education that meets their children’s needs."

New York teacher unions expressed skepticism over limited federal oversight of private schools and risks to equity. The IRS is finalizing rules, with a public comment period expected later this year before the 2027 tax year.