U.S. school choice programs expand via tax credit

School choice programs are expanding across the United States through the Education Freedom Tax Credit program. Currently, 30 states have opted into the program, while 20 states and Washington, D.C., have not. Scheduled to take effect on January 1, 2027, the initiative supports K-12 education expenses, including tuition and tutoring.

The U.S. Department of the Treasury and the Internal Revenue Service estimate the program could support nearly 700 Scholarship Granting Organizations (SGOs) and generate $26 billion in annual contributions from over 11 million taxpayers by 2030. Under the clarified rules, the donation cap is $1,700 per individual, or up to $3,400 for married couples filing jointly.

Government officials state the program does not divert funds directly from state public-school budgets; instead, taxpayers receive a federal tax credit for donations made to an SGO. Darla Romfo, CEO of the Children's Scholarship Fund, noted that taxpayers can direct support to any qualified SGO regardless of their residence, suggesting that states opting out may see their residents' tax credit donations benefit students in other states.