‘WE ARE THRILLED’

Hochul announces New York will participate in Federal Scholarship Tax Credit, a win for Catholic schools

(Courtesy photo of CINDY SCHULTZ)

In a move that was lauded by Catholic leaders, New York Governor Kathy Hochul announced on Oct. 9 that the state will participate in the Federal Scholarship Tax Credit.

“We are thrilled that Governor Hochul stood up to the special interest groups and put kids first by deciding to opt in to the Federal Scholarship Tax Credit,” said Dennis Poust, executive director of the New York State Catholic Conference. “By doing so, she keeps money in New York to help kids regardless of where they go to school. Our hope is that she inspires governors in other states to do the same.”

Catholic education leaders have applauded proposed regulations for the credit, which incentivizes private contributions to K-12 scholarships benefiting students in public, charter or private schools, including religious. On Oct. 1, the U.S. Treasury Department and the IRS jointly announced the proposed regulations for the program (also known as the Education Freedom Tax Credit), which was enacted in 2025 and is set to launch Jan. 1. According to the two federal agencies, some 96 percent of children in participating states would be eligible to receive funds.

With Hochul’s announcement, New York becomes the 31st state to opt in to the program.

“We are all grateful to Governor Hochul for opting New York State in to the Federal Scholarship Tax Credit program. This is an important step forward in expanding educational opportunities for all families across our state,” said Dr. Christopher Bott, diocesan Superintendent of Schools. “The program encourages private contributions to scholarship-granting organizations, which have the potential to provide meaningful assistance to families in both public and nonpublic schools.

“The program will help families access educational opportunities that best meet their children’s needs. We believe every child deserves the opportunity to reach their full potential, and we are encouraged by this decision.  We look forward to working collaboratively to ensure that families in our Diocese and across the state can benefit from this opportunity.”

Under the program, participating states identify qualifying scholarship-granting organizations (SGOs) to which donors from any state can contribute to receive the tax credit. Married couples filing jointly will be able to claim up to $3,400 in tax credit for eligible contributions, while individuals can claim up to $1,700 for the credit.

“Governor Hochul deserves tremendous credit for recognizing the opportunity this program presents for New York families. By opting in, she is opening the door to new educational resources that can help children succeed, regardless of where they attend school,” said Dr. Steven F. Cheeseman, president/CEO of the National Catholic Educational Association (NCEA). “For Catholic school families, this program has the potential to make a values-based Catholic education more accessible and affordable. But the benefits extend well beyond Catholic schools, providing additional support for students in public, private and religious schools across the Empire State. 

“Governor Hochul’s decision sends an important message to governors across the country: When it comes to giving children more opportunities to succeed, we should be opening doors, not closing them. With the program set to launch Jan. 1, we encourage every remaining governor to follow New York’s lead and opt in. Families should not miss out on these opportunities simply because of the state in which they live. 

The recipient organizations must be qualifying public charities that award K-12 scholarships to students in their respective states and must spend 90 percent of their income doing so. SGOs must also provide funds to at least 10 students “who do not all attend the same school,” according to a Department of Education fact sheet.

Under the proposed regulations, states cannot impose restrictions on SGOs beyond those required by the federal agencies or “exclude otherwise qualifying SGOs.”

Scholarships can be used for “a broad set of expenses incurred in connection with or required” by their schools, according to the Department of Education’s fact sheet.

Among the examples listed by the department are tuition for a school of choice, tutoring for public school students, special education services, books, supplies and “qualifying extended day programs.”

Scholarship eligibility is extended to students whose prior-year household income is “no more than 300 percent of the area’s median gross income, adjusted for family size,” said the department.