Thirty states had joined the federal government’s new school-choice tax credit as of mid-September, and Treasury projects the program could fund as many as 2.2 million scholarships a year by 2030. Both numbers come from Treasury and IRS announcements dated October 1, and they describe a program whose rules are still proposed and whose first eligible gifts are months away.
For households, the practical stake is a tax credit of up to $1,700 for an individual or $3,400 for a married couple filing jointly, available only in states that take part. The 2.2 million figure is the agencies’ forecast, not a count of anything awarded.
The thirty states on the IRS roster
Treasury’s press release gives the number but not the names, and points readers to the IRS Federal Scholarship Tax Credit page, reviewed September 16, 2026. That page lists thirty participants as of September 14, 2026. Grouped by Census Bureau region, they are:
- South (14): Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia.
- Midwest (8): Indiana, Iowa, Kansas, Missouri, Nebraska, North Dakota, Ohio and South Dakota.
- West (7): Alaska, Colorado, Idaho, Montana, Nevada, Utah and Wyoming.
- Northeast (1): New Hampshire.
Twenty states and the District of Columbia do not appear on the list. The IRS page notes that the roster reflects the date it was compiled, so it can change as more states decide.
What “signed on” means for a state
Participation is a state decision, not a federal mandate. The IRS page says a state or the District of Columbia must choose to participate and provide the IRS with a list of scholarship granting organizations, or SGOs, in that state before an individual taxpayer can donate. A state on the roster therefore has agreed to take part, but the release does not say every listed state has already delivered its SGO list.
The release also defines the organisation at the center of the credit. An SGO must be a section 501(c)(3) public charity that keeps qualified contributions separate, meets the statute’s scholarship requirements and appears on the applicable state’s SGO list. Treasury adds that a participating state cannot impose operating requirements on SGOs that are more restrictive than federal law, so the state’s role is to opt in and certify which organisations qualify, not to rewrite the federal terms.
Treasury Secretary Scott Bessent said in the release that the administration encourages all 50 states to participate. Education Secretary Linda McMahon, quoted in the IRS version, called the credit “the largest expansion of school choice in history.”
The 2.2 million figure and what it is built from
The projection sits in the same paragraph as several others. By 2030, according to Treasury and the IRS, the program could support 600 to 700 SGOs, with more than 11 million taxpayers making nearly $26 billion in qualified contributions each year. The agencies say that could support as many as 2.2 million scholarships annually, and that approximately 96 percent of children in participating states would be eligible to receive scholarship funds. The release says the proposed regulations would streamline eligibility verification for families already in needs-based programs, for foster children, and for students receiving tutoring or special-needs services in low-income areas. Like the other figures, the 96 percent share is the agencies’ estimate under rules that are not yet final.
The words “could” and “as many as” carry weight. The scholarship total depends on how many states stay in, how many SGOs qualify, and whether donors give at the scale the agencies assume.
One more estimate sits underneath the totals. The agencies describe a safe harbor for multistate SGOs that they expect to bring roughly 450 additional organizations into the program, adding up to $3 billion in annual contributions. Like the headline total, that figure is a forecast and not a count of organizations already approved.
Two caveats follow for anyone reading the 2.2 million number as a promise. Thirty states is the roster as of September 14, 2026, and the IRS page does not say what 2030 participation the estimates assume. The agencies also give the estimates for the program as a whole, with no state-by-state breakdown of scholarships in the announcements.
Where the rules stand: proposed, with a January 1, 2027 start
The credit is a nonrefundable federal income tax credit under Section 25F, and it applies to taxable years ending after December 31, 2026, with contributions beginning January 1, 2027. The IRS release, IR-2026-117, says the proposed regulations were issued with companion temporary regulations and that taxpayers may rely on the proposed rules for contributions starting that day.
IRS Chief Executive Officer Frank J. Bisignano said the rules “provide states, scholarship-granting organizations, and taxpayers with the clarity they need to prepare for this new education tax credit,” and Treasury dates the underlying law to 2025. Neither document gives a comment deadline or hearing date for the proposed regulations. No one has claimed the credit yet, because the earliest qualifying gift is dated 2027, and the scholarship figures stay forecasts until SGOs and donors start operating inside the rules.
For anyone holding an IRS refund letter that is hard to read
The guide described here is for taxpayers whose refund came back reduced, held, offset or impossible to direct deposit, and who are now looking at an IRS letter that does not explain the next step in plain language. It exists to turn that letter into a list of things to do and dates to meet.
The IRS Refund Recovery Kit includes a notice decoder and the refund-trace steps for Form 3911, in a 13-page guide that can be worked through one letter at a time.
Click here to get The IRS Refund Recovery Kit and decode a refund letter →
This article was prepared with AI assistance; each figure was checked against the Treasury and IRS pages it links.
