Staff Reports
Earlier this month the Treasury Department and the IRS published temporary and proposed rules to put the new federal scholarship tax credit into motion. The tiny-print logistics are now public, and governors across the country have a simple choice: opt in and let scholarship-granting organizations start serving kids in their states, or sit on the sidelines and pretend politics matters more than a child’s chance to read. Spoiler alert: some governors chose politics.
What the Treasury and IRS rules actually do
The regulations spell out how the Federal Scholarship Tax Credit (IRC §25F) will work in practice. Individual donors can get a dollar-for-dollar federal tax credit for contributions to qualifying scholarship-granting organizations (SGOs) — $1,700 per taxpayer, and the Treasury treats married couples as two taxpayers for purposes of the cap, meaning up to about $3,400 on a joint return under the agency’s reading. The rules set eligibility, reporting and recordkeeping standards, and a state “opt-in” process. They also establish the deadlines for states to certify SGOs so scholarships can flow. The IRS projects the program could grow substantially — potentially billions of dollars and millions of students served if enough states and donors participate.
Governors who balked — and what they’re really doing
Some governors, mostly Democrats, are refusing to opt in. Their stated worries range from “it mostly helps private schools” to concerns about federal limits on state control and administrative headaches for public districts. Those are legitimate policy questions to debate. But when the choice is framed as “kids get help or we make a point,” the point looks petty. In states where reading and math scores lag, denying a path to tutoring, books, or special services in the name of symbolism is cruel. Political theater does not teach a child to read.
Wisconsin’s veto and the real-world hit to students
Take Governor Tony Evers of Wisconsin. He vetoed legislation that would have required the state to opt in to the federal program, saying he prefers other priorities and worried about private school benefits. The practical result: in-state SGOs can’t award scholarships to Wisconsin kids under the federal credit while the governor refuses to opt in. Donors could still give to out-of-state SGOs and claim the credit, but that is no substitute for a state-based scholarship ecosystem that reaches neighborhood kids. Advocates estimate sizable fundraising under reasonable participation scenarios — numbers often cited in debate — which is why this fight is so heated. But for parents and students, the question is simple: will your governor let kids get help, or will they keep playing politics?
The choice voters should watch and remember
The Treasury/IRS rules set a clear calendar and force a decision: states must act within an election window and certify SGOs if they want scholarship money on the ground. Governors who pretend this is a minor administrative spat are choosing messaging over children. Voters should demand answers: if a governor declines to opt in, what specifically will replace the scholarships, tutoring, and support families could receive? If the answer is “political principle,” that won’t sit well in school districts where too many kids are still behind. At some point the political grandstanding ends and the bill comes due — for taxpayers, for parents, and most of all for the children who need help now.
