On Oct. 3 we wrote up Treasury's draft rules for the new school-choice tax credit, built around the $3,400 cap for couples. Friday's Journal fills in the other side of the map — 19 states and the District of Columbia still haven't opted in — plus payroll giving, the limits Treasury puts on states and the questions still open. The sources are an editorial and a letter on the same page from Darla Romfo, who runs the Children's Scholarship Fund in New York. Here's the version with the politics taken out.
The mechanics first. From Jan. 1, 2027, a taxpayer can send up to $1,700 a year to an approved scholarship-granting organization — $3,400 for a married couple filing jointly — and subtract the full amount from the federal income tax bill. Not a deduction; a credit. Romfo's letter frames it as a redirect: the $1,700 that would have gone to the IRS goes to a scholarship instead. The rules also let people give through payroll deduction, which turns a once-a-year decision into a line on the pay stub. One more fact from our Oct. 3 piece, drawn from the Journal's earlier report: a donor in a state that hasn't opted in can still give to a group in a state that has and claim the federal credit.
Who the money serves: students in households at or below 300% of local median income, for public and private school expenses. Romfo adds that scholarships could cover intensive tutoring, SAT prep and similar supplemental help. Under Treasury's rules, a state that opts in can't shut out private-school students, can't bar scholarship groups that meet the federal requirements, and can't dictate which schools or expenses those groups pay for. Still unwritten: the list of eligible K-12 expenses, which may also settle how homeschoolers are treated. And most of the package is still a proposal open to public comment, to be finalized later — though Treasury says the draft governs in the meantime.
The map
Here's the hole. A state's opt-in decides whether scholarship money can reach students living there, and 19 states plus the District of Columbia hadn't opted in as of Friday's paper. Several governors had said they'd wait for the rules; one said Wednesday he's open to the credit and will decide within weeks. The editorial doesn't print the full list, so we won't guess at any state's status. One practical wrinkle from Marguerite Roza at Georgetown: income verification may put off public-school families who'd mostly use the money for small fees — though Treasury says students in certain low-income areas won't need to verify for some services.
Our read
This is Tax, and we'd file it under 2027, not 2026 — nothing here changes this year's return. For a donor household the move is small and concrete: a credit of up to $3,400 that costs close to nothing net if you'd owe at least that much federal tax anyway, available through payroll where an employer offers it, with the expense rules still in draft. Put it on the 2027 list beside the retirement contributions and wait for the final rules. Your state's answer decides whether the money can help students near you; as we reported Oct. 3, it isn't what decides whether you get the credit. For a family that might receive a scholarship, the state's answer comes first and the 300%-of-local-median line second — and the paperwork question Roza raises is real; the money only helps if it's worth the forms.
Whatever one thinks of school choice, the household math is the same: for a donor who owes at least that much federal tax, a credit is tax you were going to pay anyway, redirected. We'd neither chase it nor ignore it; we'd mark it for the first week of January 2027 and check the final rules and the state map once more before then. It's a small line on the plan — and if payroll giving is on offer, it's the kind you set up once and stop thinking about.