The Federal Scholarship Tax Credit in New York
Last updated: October 2026. New York has not formally opted in.
Where things stand
New York has not formally opted in to the Federal Scholarship Tax Credit as of October 2026. Governor Kathy Hochul announced her intent to participate on May 8, 2026, and recommitted publicly on September 17, 2026, saying "we are opting in." But she has not filed the formal election (IRS Form 15714) that makes it official.
After Treasury released the implementing regulations on October 1, 2026, Hochul declined to make it official, saying she wanted to review the rules for what she called "poison pills." The IRS list of 30 participating states does not include New York.
The decision rests solely with the governor. No legislative vote is required. The federal deadline for filing the election is midnight on January 1, 2027.
What this means for New York families
If New York does not opt in by January 1, 2027, New York students cannot receive federal scholarships, and donations to New York SGOs will not qualify for the credit. New York donors could still give to SGOs in other participating states and claim the credit, but the money would go to students in those states, not New York.
The political fight
New York is a Democratic trifecta, which makes this complicated. Hochul is seeking re-election in November 2026 with backing from teachers unions, and she is publicly breaking with them on this issue.
Opposition includes the United Federation of Teachers (whose president led a "Hochul Opt-Out!" rally in Manhattan), the American Federation of Teachers, New York State United Teachers, the NAACP, the NYCLU, and the state school boards association, which is running a "Take Action" campaign against opting in.
Support comes from Teach NYS, Agudath Israel, the American Federation for Children, the Catholic Conference, and Democrats for Education Reform, which has urged undecided governors to follow Hochul's lead.
Six New York House Republicans sent a letter in February 2026 urging the state to opt in. State Senator John Liu has urged the governor to opt out, calling it a "Faustian bargain."
What New York has now
New York has no state tax-credit scholarship or voucher program. An Education Investment Tax Credit was proposed for years but was blocked by Assembly Democrats under union pressure.
Instead, New York funds nonpublic schools through Mandated Services Aid ($240.2 million in the FY2027 budget), plus capital and STEM funding. About 380,000 students attend roughly 1,800 nonpublic schools in the state.
The state constitution's ban on aid to religious schools does not apply here. No state money is involved in the federal program.
Income limits if New York joins
Students qualify if household income is at or below 300% of the area median income. Based on HUD data, here is what that looks like for a four-person household in major New York areas:
| Area | Max household income (300% of area median) |
|---|---|
| New York City metro | ~$508,800/year |
| Nassau-Suffolk | ~$492,900/year |
| Buffalo / Erie County | ~$304,500/year |
| Rochester / Monroe County | ~$315,600/year |
Estimates based on FY2026 HUD income data. The IRS has not published official 2027 figures, and the income calculation method comes from proposed federal regulations, not final rules.
Organizations preparing in New York
No official SGO list exists. If New York opts in, its list would be due to the IRS by February 15, 2027. These organizations are positioned to participate:
- Futures in Education. Serves Catholic schools in Brooklyn and Queens. Has published information about the federal credit.
- Children's Scholarship Fund. Headquartered in New York City, founded in 1998. Has said it is preparing for the federal credit.
- Diocesan SGOs. The Archdiocese of New York and the Diocese of Rockville Centre are positioned to begin. The Diocese of Brooklyn/Queens has existing scholarship infrastructure.
- Bison Fund. Serves families in Buffalo and Rochester.
Key dates
| Date | Milestone |
|---|---|
| May 8, 2026 | Gov. Hochul announces intent to opt in |
| September 17, 2026 | Hochul recommits: "We are opting in" |
| October 1, 2026 | Treasury releases implementing regulations; Hochul declines to make it official pending review |
| November 2026 | New York gubernatorial election |
| January 1, 2027 | Deadline for New York to file its election; program goes live |
| February 15, 2027 | SGO list due to IRS (if NY opts in) |
Sources
- IRS: Federal Scholarship Tax Credit, participating states list (accessed October 2026)
- Chalkbeat: federal tax credit rules pose test for governors (Oct 2, 2026) (accessed October 2026)
- NY Post: Hochul vows to opt in despite union opposition (Sept 2026) (accessed October 2026)
- Futures in Education (Brooklyn/Queens Catholic SGO) (accessed October 2026)
- Ballotpedia: state participation in the federal K-12 education tax credit program (accessed October 2026)