More than half of U.S. states have elected to participate in the new Federal Scholarship Tax Credit (FSTC) program created under the One Big Beautiful Bill Act (OBBBA). According to the IRS, 27 states have opted into the voluntary program. New York is currenlty noy one of them, but there is indication that they will soon follow suite.
Eligible taxpayers can claim a federal tax credit for making qualified contributions to Scholarship Granting Organizations (SGOs) that provide scholarships for elementary and secondary education expenses. To qualify for the credit, taxpayers must contribute to an SGO located in a participating state that has submitted a list of approved organizations to the IRS. The credit is available for contributions of up to $1,700.
The IRS will maintain and update a list of participating states as additional jurisdictions complete the election process.