Private School Tax Credit Spurs Questions About Role of States

Backers and skeptics of a new federal tax credit for donations to private school scholarships are asking the Treasury Department to flesh out the role of the states, which hold significant sway over the new program.

Republicans created the credit in their 2025 tax-and-spending law to further their support for students to attend private schools. The break starts in 2027 and applies to donors to scholarship-granting organizations that typically provide financial assistance for low-to-middle income K-12 students to attend these schools. The groups can also give scholarships for tutoring or other education assistance in public schools.

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