Washington State is the holdout that can still grab $700 million for education.<\/p>\n\n\n\n
A year ago the Educational Choice for Children Act was a new line in the One Big Beautiful Bill. Today it is permanent federal law. It is IRC \u00a725F, the Federal Scholarship Tax Credit, often called the Education Freedom Tax Credit, and it turns on in 90 days. On October 2, Treasury and the IRS released the proposed rules.<\/p>\n\n\n\n
Taxpayers may donate up to $1,700 to a Scholarship Granting Organization (SGO) and take a dollar-for-dollar federal credit. The new rules confirm that a married couple filing jointly can claim up to $3,400. Eligible families have household income up to 300% of area median income, and their scholarships are tax-free. The money can go to K\u201312 costs such as private or religious school tuition, tutoring, special-needs services, books and computer technology. Treasury says detailed guidance on eligible expenses will come separately. Whether homeschool costs and dual enrollment qualify depends on that guidance.<\/p>\n\n\n\n
What Washington does not have is a yes from Gov. Bob Ferguson.<\/p>\n\n\n\n
Thirty states had elected in as of August, according to Treasury. Colorado\u2019s Jared Polis and New York\u2019s Kathy Hochul show this is no longer only a red-state project. If Washington stays out, residents can still take the credit, but only by funding students in states that said yes. Under the new rules, those dollars cannot come back: scholarships go only to students who live in the SGO\u2019s state. Advocates put the in-state prize at roughly $700\u2013732 million a year for about 1.19 million eligible children. There are no Washington SGOs yet because nonprofits will not staff up until the governor files. Once Washington is in, donors to national multistate SGOs can direct their gifts to a Washington account.<\/p>\n\n\n\n
Ferguson\u2019s office says it is waiting for final Treasury rules. That position no longer works. The rules released October 2 are proposed rules. Comments run for 60 days, and the public hearing is December 15. Final rules cannot arrive before Washington\u2019s deadlines:<\/p>\n\n\n\n
States, SGOs and donors can rely on the proposed rules for contributions made from January 1, 2027. There is nothing left to wait for.<\/p>\n\n\n\n
Filing is also low-risk. If Washington files the advance election and then does not submit its SGO list by February 15, it is simply out for 2027. The election locks in for the year only once the list is submitted. Filing by January 1 buys the governor six more weeks to read the rules, hear from the public and decide.<\/p>\n\n\n\n
Superintendent Chris Reykdal and the Washington Education Association still frame the credit as a voucher that will weaken public schools. That argument is harder to sustain than it was in 2025. The dollars are private donations, not a raid on the McCleary budget. Public-school foundations can run SGOs for tutoring and wraparound services, and the new rules bar the state from screening them out. Catholic schools already educate about 21,000 Washington children at no charge to the state. A January House memorial (HJM 4013) asking Ferguson to opt in never left committee. Polling paid for by choice advocates finds large majority support, including among Democrats.<\/p>\n\n\n\n
Opposition has not vanished. Senate and House Democrats have introduced repeal bills. Congress is also considering stripping the state opt-in entirely. Treasury still has to issue its guidance on eligible expenses. Those are reasons to watch the rules, not reasons to forfeit a federal credit other states are already organizing to capture.<\/p>\n\n\n\n
ECCA does not require Olympia to appropriate a dollar. It does require one signature. Ferguson should file the advance election by January 1. By February 15, he should submit the list of every qualifying Washington SGO, which the rules require to include public-school foundations, special-needs providers and private-school SGOs alike. Then the money stays in Washington.<\/p>\n\n\n\n
Details: eccacredit.com<\/a><\/p>\n\n\n\n