New Jersey has until January 1, 2027, to decide whether it will join a federal tax-credit scholarship program that Republican lawmakers say could funnel as much as $911 million toward students statewide, and Gov. Mikie Sherrill still hasn't said which way she'll go. With the U.S. Treasury Department and Internal Revenue Service now having published the formal regulations she said she was waiting on, pressure is mounting from both the Statehouse and the pews to get New Jersey off the sidelines before the clock runs out.
State Senate Republican Leader Anthony Bucco and Assembly Republican Leader John DiMaio sent Sherrill a letter urging her to enroll New Jersey when the program launches in 2027, according to Shore News Network. “Every New Jersey family deserves the opportunity to pursue the educational path that best meets the needs of their children,” the two wrote, according to the outlet, adding that “New Jersey should act now to ensure that our families are not excluded from this opportunity.” The letter, sent from Trenton, frames the decision as separate from the broader fight over the law that created the credit.
That law is the One Big Beautiful Bill Act, which President Donald J. Trump signed on July 4, 2025. Sherrill voted against the bill and has criticized it over provisions touching health care, food assistance and federal taxes, per the same report. Bucco and DiMaio argue the scholarship provision should be judged on its own, writing that New Jersey should take advantage of it “regardless of the broader political fight over the law,” and that greater access to educational options “can empower parents, give families more flexibility, and provide additional pathways to student success.”
What the Treasury Rules Actually Require
The regulatory clock is now real. Under Section 25F of the federal tax code, states must formally elect to participate and submit opt-in paperwork to the Treasury by January 1, 2027, then follow up with a certified list of eligible in-state scholarship organizations by February 15, 2027, according to a local news account. Those binding rules, covering donor tax credit calculations and state election procedures, were published by the Treasury Department and IRS this month, according to a law firm analysis of the guidance.
Sherrill had previously said she wanted to review the formal federal regulations before deciding; those regulations have now been published. Under the program, individual taxpayers can claim a nonrefundable federal tax credit of up to $1,700 a year for donations to qualifying scholarship organizations, with married couples filing jointly eligible for up to $3,400, the firm's guidance states.
The $911 Million Question
Republican estimates put real money behind the deadline. New Jersey Republican lawmakers and educational advocacy groups estimate the state could see up to $911 million in scholarship assistance flow to students without touching the state budget, since the program runs on private donations offset by federal credits rather than state appropriations, according to WRNJ Radio.
There's also a one-way-door problem built into the law. Because Section 25F lets taxpayers claim the $1,700 credit regardless of whether their home state participates, New Jersey residents could still get the tax break by donating to scholarship organizations in other participating states if New Jersey sits out, according to Save Jersey. That dynamic, the outlet notes, risks pulling local donor dollars out of state entirely rather than funding scholarships for New Jersey kids.
GOP Lawmakers Have a Backup Plan
Republicans aren't just writing letters. Assemblymembers Michael Inganamort, Gerry Scharfenberger and Dawn Fantasia introduced Assembly Bill A4777 in March 2026, which would statutorily force New Jersey's participation and require the state Commissioner of Education to submit an annual roster of eligible scholarship organizations to the U.S. Treasury, per the New Jersey Legislature's bill record. The bill was referred to the Assembly Education Committee in a Legislature still controlled by Democrats.
New Jersey isn't alone in weighing this call. At least 30 to 31 states have formally elected or announced plans to join the federal scholarship tax credit, while Wisconsin's Democratic governor, Tony Evers, has publicly declined, according to Education Week. Wisconsin's Tony Evers vetoed a GOP bill in March that sought to force his state into the program, a decision Hoodline reported at the time.
Who Could Actually Use the Money
Eligibility is broader than private-school critics might assume. To qualify, K-12 students must live in households earning no more than 300% of their area's median gross income — an estimate from the American Federation for Children says the threshold could cover 92% of U.S. students if every state participates, per Education Week's reporting on the new rules. And the money isn't limited to private school tuition: scholarship-granting organizations can also fund books, tutoring, special-needs services, transportation and computer technology, uses that could benefit public school students too, Shore News Network reports.
Supporters of the program argue it could expand options for families seeking private schooling, tutoring or other educational services, while opponents of similar tax-credit scholarship systems counter that they can divert public resources toward private education and weaken funding for traditional public schools, according to the same report. Faith-based groups have now entered the fray directly: the New Jersey Catholic Conference launched a statewide advocacy push on October 5, distributing parish bulletin materials and online action alerts urging voters to pressure Sherrill's office, according to the Diocese of Trenton. Advocates from the Catholic Conference, Agudath Israel and other school choice coalitions are applying that pressure ahead of the January 1 deadline, framing the scholarships as a benefit for tutoring, technology and special-education support, not just private tuition, per Education Week.
For now, Sherrill has not announced whether New Jersey will opt in. With the February 15 paperwork deadline for naming eligible scholarship organizations following close behind the January 1 election date, the governor's office has only a narrow window left to make the call before the program opens in 2027.
