Congressman Fong Calls on California to Opt Into New Federal Tax Credit Scholarship Program

WASHINGTON, D.C. - This week, Congressman Vince Fong (CA-20) called on Governor Gavin Newsom to opt California into the new Federal Tax Credit Scholarship Program. Established under the Working Families Tax Cut passed by Congress last summer, this first-of-its-kind federal scholarship tax credit program would offer Californians a nonrefundable tax credit of up to $1,700 for donations to nonprofit organizations that provide K-12 scholarships for students from low- and middle-income families.

"Education is the foundation of opportunity," said Congressman Fong (CA-20)."I'm calling on Governor Newsom to support real educational choice for California families - so every child can succeed. The Working Families Tax Cuts legislation creates a Scholarship Tax Credit to expand school choice, but only if states opt in. California must say yes. It's time to unlock opportunity for families and put parents first. Children in the Central Valley and across the Golden State deserve nothing less."

States must opt in to participate and, beginning in 2027, certify a list of eligible Scholarship Granting Organizations (SGOs) to the Secretary of the Treasury by January 1 of each year. Qualifying SGOs as determined by federal guidelines may receive donations and administer student scholarships, consistent with eligibility and program standards established at the federal level.

Scholarships awarded under the program may be used across all educational settings including public, charter, private, religious, and homeschool options, and may cover a wide range of education-related expenses. Eligible uses include tuition, books, room and board, tutoring, special education services, uniforms, educational software, technology, and other approved costs that help families meet their children's individual learning needs. Importantly, the program places no cap on the total amount of scholarship assistance a family may receive and does not require families to choose between education programs.

You can read the full letter here and below:

Dear Governor Newsom:

To strengthen our state's commitment to educational access, I write to encourage and advocate for California's participation in the new federal tax credit scholarship program. This new federal credit, which was established under Section 25F of the Internal Revenue Code by P.L. 119-21, allows Californians to claim a non-refundable tax credit of up to $1,700 for contributions to Scholarship Granting Organizations (SGOs) supporting students from low- and middle-income families.

Under the program, scholarship recipients can use the funds for tuition, books, room and board, tutoring, special education services, uniforms, computers, and other approved education-related expenses that help families meet their children's needs. By raising additional scholarship funds for students who face the greatest barriers to educational opportunities without imposing federal mandates on curriculum, school participation, or education policy, this tax credit directly addresses educational disparities and advances efforts to ensure all students have access to quality education.

Importantly, as state participation is entirely voluntary, this credit is not automatically available nationwide; California must opt-in for residents to claim this federal tax credit for contributions made to qualifying, state-certified SGOs. By electing to participate, you would ensure this new federal education benefit will flow to California students, regardless of whether they attend a public or private school, and at no cost to the State.

As you know, K-12 education is essential to ensuring a strong and prosperous future, not just for California but for our country as a whole, preparing upcoming generations for success and laying the groundwork for access to long-term opportunities. For these reasons, I strongly encourage California to submit an Advance Election to the U.S. Department of the Treasury and the Internal Revenue Service as soon as possible to participate in the Federal Tax Credit Scholarship Program for calendar year 2027 and to work toward timely submission of the State SGO list. My office stands ready to assist California in this process so that every student can reach their full potential.