Education Freedom Tax Credit
New Jersey Should Opt In
The Education Freedom Tax Credit (EFTC) represents a once-in-a-generation opportunity to expand educational opportunity for New Jersey students—without increasing state spending or taking a single dollar away from public schools.
By opting into the EFTC, Governor Sherrill can unlock millions of dollars in privately funded scholarships and educational services for New Jersey families. The program empowers parents, supports students with diverse educational needs, and strengthens the broad educational ecosystem that serves our state's children.
The choice is simple: New Jersey can either allow its students to benefit from this historic federal opportunity—or leave those resources on the table while families in other states move forward.
NJCAPE believes Governor Sherrill should opt New Jersey into the Education Freedom Tax Credit because every child deserves access to the educational opportunities that help them succeed, every family deserves meaningful educational choice, and New Jersey should never turn away resources that benefit students without increasing the burden on taxpayers.
WHAT PARENTS AND FAMILIES SHOULD KNOW
How This Helps Eligible Families
-
The tax credit provides direct financial assistance for tuition, books, supplies, tutoring, and educational services
-
With funding support, the program allows greater choice and flexibility in education
-
The federal scholarship tax credit offers an easy way for relatives, friends, and community members to support your child’s school through tax deductible donations
Action Steps for Parents
This scholarship tax credit only becomes available if the State of New Jersey opts in to the program before the deadline. Stay tuned for news and action steps you can take to help.
*Final regulations surrounding the tax credit and SGOs are pending from the US Department of Treasury, which may affect eligibility rules and donation caps.
WHAT SCHOOLS AND PRINCIPALS SHOULD KNOW
How this Program Benefits Your School & Students
-
The federal scholarship tax credit provides a new source of scholarship funding for families
-
The funds support both public and non-public school students
-
The program helps to retain and enroll students who need financial assistance
-
The availability of the tax credit strengthens community partnerships
What Schools Can Do
New Jersey has not yet decided whether it will participate in the program. Because the outcome remains uncertain, NJCAPE encourages schools to take the following steps now so they are well positioned to respond if the state ultimately elects to participate:
-
Connect with your nonpublic school to learn of any efforts they are coordinating to promote the tax credit and ask about SGOs.
-
Educate your faculty, staff, PTO members about the Federal Education Tax Credit.
-
Inform Families about the Tax Credit who may not be aware of this resource.
-
Begin Identifying potential donors.
Stay tuned for news and action steps you can take to help.
*Final regulations surrounding the tax credit and SGOs are pending from the US Department of Treasury, which may affect eligibility rules and donation caps.
WHAT LEGISLATORS SHOULD KNOW
A new federal program could bring direct educational support to New Jersey families, if the state opts in. The Federal Educational Tax Credit was enacted in 2025 within the Federal Budget Reconciliation bill (One Big Beautiful Bill Act).
The program allows individuals to donate up to $1,700 per year to authorized Scholarship Granting Organizations (SGOs) and receive a dollar-for-dollar federal tax credit. Funds can be used to help cover real costs to students, such as tuition, supplies, and services. The program supports all students regardless of school type.
New Jersey has until the deadline to opt in, which is currently set for December 31, 2026.
Key Messages for Policymakers / Talking Points
-
This is a bipartisan opportunity to support students at no state cost
-
It represents an evidence-based way to improve educational outcomes
-
Broad support exists across public, private, and homeschool communities
-
Urge timely opt-in before the December 31, 2026 deadline
Call to Action – What Our Legislators Can Do
If & when the state opts in to participate, legislators can take the following steps to support this effort:
-
Contact the Governor’s Office (Voter Action)
-
Co-sponsor and support related resolutions
Stay tuned for news and action steps you can take to help.
*Final regulations surrounding the tax credit and SGOs are pending from the US Department of Treasury, which may affect eligibility rules and donation caps.
WHAT DONORS SHOULD KNOW
You Can Make an Impact as a Donor
If and when the state opts in to participate, you can turn $1,700 of federal tax liability into direct support for New Jersey students and receive dollar-for-dollar tax credit. These funds can help families with tuition, supplies, and more.
Next Steps for Donors - applicable when/if the state opts in
-
Donate to approved SGOs
-
Claim the credit on your federal tax return
-
Encourage friends and family to participate
Stay tuned for news and action steps you can take to help.
*Final regulations surrounding the tax credit and SGOs are pending from the US Department of Treasury, which may affect eligibility rules and donation caps.
