Congress recently passed the first federal scholarship tax credit law on July 4, 2025, which will provide millions in
educational resources for students across the U.S.

HOW IT WORKS

Individual taxpayers can receive a dollar-for-dollar tax credit on their federal tax return for donations (up to
$1,700 per year) made to K-12 scholarship organizations. Scholarship-granting organizations must use the authorized
donations to provide scholarships for tuition, tutoring, special needs, supplies/technology, and other education expenses for
both public and private school students.
The Governor of each state, or designee provided by law, must opt in to this federal opportunity. States must opt in for the
first year by Jan. 1, 2027, and each January thereafter.

WHAT HAPPENS NEXT?

Governors are currently weighing whether to opt their state into this educational opportunity. If a state does not opt in,
scholarship-granting organizations in that state may not grant scholarships to kids under this law. However, individual taxpayers
can give incentivized donations to SGOs in states where governors have opted in.
The Treasury Department must form regulations for this federal educational opportunity. In states where governors have
already indicated they will opt in, scholarship organizations are preparing to take advantage of this opportunity. Similarly,
parents are gearing up in expectation of the new options that their children will have.

WHY OUR GOVERNOR SHOULD OPT IN

1. Zero cost to California: “Opting in” to the federal tax credit will not cost our state anything. States are not required to
   fund or administer anything. States’ only obligation is to decide to opt in and submit the SGO list by Jan. 1 annually.

• Keeps dollars in state: Failure to opt in will cause local dollars to leave our state through donations made by individual
  taxpayers to scholarship-granting organizations in other states. This will cause our state’s kids to lose out on these
  dollars for their education. Keep these dollars here for our kids!
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• Benefits all children: This will help both public and private school students. Scholarship Granting Organizations will
  benefit from the opt-in, enabling them to distribute scholarship funds to schools and organizations rather than to
  students.
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• Keeps funds in California: If our state does not opt in, parents may elect to send their dollar tax-for-dollar for a credit of $1,700 to one of the 29 states that have already opted in.

OUR ASK

We ask our governor to make an affirmative promise to opt into this educational opportunity. Our local parents, schools, and
scholarship organizations want to be ready to utilize this groundbreaking plan for the benefit of our kids!
Contact Governor Newsom’s office, Senators, and Assemblymembers to advocate for opting in.