Virginia formally opts in program to expand school choice

Last week, Gov. Glenn Youngkin announced that Virginia was the first state in the nation to opt in to the Education Freedom Tax Credit, also known as the Federal Scholarship Tax Credit (FSTC), a new federal program that incentivizes individuals and companies to donate funds to provide scholarships for K–12 students to expand school choice. On January 1, 2026, Virginia formally elected to participate in the FSTC.

Beginning January 1, 2027, the Education Freedom Tax Credit program allows taxpayers to claim a dollar-for-dollar nonrefundable federal tax credit of up to $1,700 that fund K-12 scholarships through approved Scholarship Granting Organizations (SGOs). Scholarships funded through the Education Freedom Tax Credit can be used for tuition, tutoring, educational therapies for students with disabilities, and other education-related services that help families, including those enrolled in public schools, choose the learning environment that best meets their children’s needs.

As part of Virginia’s opt-in, Youngkin submitted a letter to the U.S. Department of the Treasury and the Internal Revenue Service identifying the Commonwealth’s initial list of eight Scholarship Granting Organizations—including two Virginia-based and six national organizations—that will serve Virginia students and families when the program commences next year.

“Virginia is proud to lead the nation once again as the first state to opt in to the Education Freedom Tax Credit,” said Youngkin. “This decision expands school choice for families across the Commonwealth by opening access to federally tax credit-funded scholarships, empowering parents and helping ensure students, especially those with the greatest needs, can choose the learning environment that is right for them.”

The Commonwealth will continue to coordinate with the Treasury and the Internal Revenue Service, as additional implementation guidance becomes available, and work with participating scholarship-granting organizations to support compliance, transparency, and effective program administration.