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New York will become the 30th state to enter the historic state tuition tax program, marking a significant policy change for Gov. Kathy Hochul, D., and making New York the second Democratic-led state to adopt the program.
The announcement came in a letter to X from US Education Secretary Linda McMahon, who praised the move. “Governor Hochul has indicated that he will enter the Education Freedom Tax Credit – what a success for students and families across New York!” McMahon wrote.
A spokesperson for Hochul’s office confirmed with Fox News Digital that the governor intends to enter the program.
“Governor Hochul supports the tax credit scholarship and its potential to help New York students and schools. Our office is awaiting information from the federal government on the program and will carefully review the details of the poison pill policy that could harm New York’s education system,” said a spokesperson.
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New York will enter a federal tuition tax credit program, becoming the second blue-chip state to do so. (Adam Gray/Bloomberg via Getty Image)
This program, officially known as the Federal Scholarship Tax Credit (FSTC), was signed into law in July 2025 as part of the “One Big Good” Act. Unlike traditional government subsidies, this policy relies on individual governments to “step in” before their citizens can claim benefits.
Under these guidelines, individual taxpayers can receive a dollar-for-dollar income tax credit of up to $1,700 for donations made to Scholarship Granting Organizations (SGOs). These organizations then distribute funds to families with incomes up to 300% of their area’s gross income, helping them pay for private tuition, tutoring, or special education services. While opt-in is happening now, the first round of tax-deductible contributions is expected to begin on January 1, 2027.
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The Democratic governors’ decision comes after Education Secretary Linda McMahon expressed concern about Democratic governors refusing to join the program except for President Donald Trump. (AP Photo/Paul Sancia, File)
For years, “school choice” has been a third issue for Democrats, who often argue that such programs take away valuable funding from public schools and undermine teachers’ unions. However, the situation seems to be changing.
Colorado Gov. Jared Polis was the first Democrat to secede, putting his state on the agenda in January 2026. Polis dismissed critics at the time, he said. local media He would “go crazy” and join, realizing that the debt would give him power parents to pay for after-school or summer programs that were previously inaccessible.
New York’s entry brings the total number of participating states to 30. The move follows months of pressure from McMahon, who previously said “Faulkner Focus“In March that any refusal to join was part of the group.
“I believe that is the only reason [they would refuse],” McMahon said. “Why any governor wouldn’t want to get into this is a disgrace to me.”
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A federal tax-credit scholarship program, also called the Education Freedom Tax Credit, it allows taxpayers to reduce their taxes, but, the governors have to buy into the system. (Anna Moneymaker/Getty Images)
Supporters of the policy hailed Hochul’s decision as a victory for New York families.
“Finally, school choice is coming to New York, thanks to Governor Hochul’s courage and strong advocacy for many families,” Tommy Schultz, CEO of the American Federation for Children (AFC), told Fox News Digital. “We celebrate together with all the families who will know that they will soon have the opportunity to receive an education that meets the needs of their children.”
Critics, including several prominent New York teachers unions, remain skeptical. They expressed concern about the lack of state oversight of private institutions and the potential for the program to widen equity gaps in the state’s education sector.
Although New York has entered its intention to participate, the IRS is currently finalizing the regulatory framework. A public comment period is expected later this year before the plan officially goes live in the 2027 tax year.
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