Hochul Says New York Will Join Federal Scholarship Tax Credit Program Starting Jan. 1

Gov. Kathy Hochul said Friday, Oct. 9, that New York will take part in the federal scholarship tax credit program, which begins Jan. 1, 2027.

The program was created by the federal tax law signed in July 2025. It lets individual taxpayers claim a nonrefundable federal credit of up to $1,700 for contributions to nonprofit scholarship-granting organizations, which then pay for students' education costs. Only states whose governors opt in take part.

Treasury Department and IRS temporary regulations published Oct. 2 require a state to make its advance election on or before Jan. 1, 2027. A state may submit its list of qualifying scholarship organizations by Feb. 15, 2027, to perfect that election. Hochul's statement did not say whether New York has filed.

"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," Hochul said. "After a careful review of the federal regulations, we believe this program has the potential to bring millions of additional dollars to New York students and families without taking a single dollar from public schools or our state or local budgets."

She said she has been talking with business leaders who have committed to use the program to support public school students. Her statement did not name them or give amounts.

Melinda Person, president of New York State United Teachers, said the union is "profoundly disappointed" and that the program poses a threat "to the public schools that serve 90 percent of our state's children." She said the union and its allies "will continue working to repeal this program at the federal level."