Treasury Secretary Scott Bessent and U.S. Sen. Jon Husted stood before educators, school leaders and families Friday at Crown Preparatory Academy in Columbus to pitch a new federal tax credit designed to expand school choice across Ohio. The Education Freedom Tax Credit, created under the Working Families Tax Cuts Act, is scheduled to take effect in January 2027 and could let eligible taxpayers claim up to $1,700 for donations to approved scholarship-granting organizations, or up to $3,400 for married couples filing jointly.
The roundtable brought together educators, school leaders, adoption advocates, state officials and families, according to ABC 6 On Your Side, which reported that the credit was created under the Working Families Tax Cuts Act and is set to launch in January 2027. Scholarship-granting organizations that receive the donations must register with the Internal Revenue Service and spend at least 90% of the money they take in on scholarships, the outlet reported. Those scholarships can cover tuition, tutoring, books, computers, transportation and special education services.
Ohio Gov. Mike DeWine opted the state into the program in February, per the same report, positioning Ohio among the states ready to participate once the credit takes effect. Husted, who co-sponsored the federal Educational Choice for Children Act that served as the basis for the new credit, framed the program as an addition to Ohio's existing EdChoice scholarships rather than a replacement. “This can be a supplement on top of that to help families make ends meet,” he said at the roundtable.
Filling Gaps Left by Existing Scholarships
Husted argued that EdChoice scholarships help Ohio families but sometimes fall short of covering everything a student needs, and that the new federal credit could fill those gaps. He pointed to public-school students who are struggling to read at grade level and may need a tutor as one example of the kind of support the credit is designed to fund, noting the program is meant to help students in both public and private schools. He said the arrangement gives families flexibility to find educational resources that fit their children's individual needs.
Nationally, Treasury and the IRS estimate under proposed rules and safe harbors that roughly 96% of children in participating states would be eligible to receive section 25F scholarship funds; the figure measures scholarship eligibility, not taxpayer eligibility for the tax credit. EdChoice projects that donations could fund 2.2 million scholarships within the program's first three years. As of the group's analysis, 30 states had elected to participate in the federal tax credit for scholarships.
Ohio's EdChoice Program Faces Legal Uncertainty
The push for the new federal credit comes as Ohio's EdChoice scholarship program faces uncertainty after an appeals court ruled the state's voucher program unconstitutional. Husted criticized that ruling and said he expects it to be overturned on appeal, arguing that families in Ohio will continue to demand access to schools of their choice. He said officials are aggressively addressing supply and demand issues in education as part of that broader effort.
The legal fight over EdChoice unfolds against a backdrop of rapidly growing school-choice spending nationwide. Private school choice programs allocated an estimated $10.6 billion to students over the past year, a 29% increase, equivalent to 1.3% of a projected $783 billion spent on current expenditures by public schools nationwide, according to EdChoice's spending rankings. Florida remains the national leader, with choice programs accounting for 11.19% of its combined expenditures, while Oklahoma posted the biggest jump in the rankings this year after fully implementing its refundable tax credit.
Broader Economic Remarks From Bessent
Beyond the education credit, Husted described affordability in broader terms Friday, saying it means helping people earn more, keep more of their earnings and lower essential costs. He described the tax credit as another tool to help families secure educational support for their children, adding that families want that kind of support and will keep demanding access to alternatives.
Bessent also addressed the national economic picture during the roundtable, saying he expects wage increases to continue while inflation eases over time. “The wage increases are going to keep going. The inflation level will go down,” he said, according to ABC 6's account of the event. He acknowledged a short-term energy supply shock but said the country will work through it.
The Working Families Tax Cuts Act also expanded the federal adoption tax credit, raising its maximum to $17,670 per child, with up to $5,120 of that amount refundable, according to figures attributed to Husted's office. That refundable portion is designed to benefit families who owe little or no federal income tax. Families who spoke at the roundtable emphasized that educational support is about preparing children to read, graduate and enter adulthood ready for what comes next. The Internal Revenue Service has confirmed the credit's scheduled January 2027 launch and the $1,700 and $3,400 claim limits, while the U.S. Department of the Treasury has said it was developing proposed regulations covering implementation, compliance, reporting and program integrity ahead of that launch.
