North Carolina Just Took a Major Step Toward the New Federal Scholarship Tax Credit Program
North Carolina is now one step closer to participating in the new Federal Scholarship Tax Credit program, sometimes referred to as EFTC, after the North Carolina House voted to override Governor Josh Stein’s veto of House Bill 87. (ncnewsline.com)
The vote marks a significant moment in the national school choice conversation and signals that momentum around the new federal scholarship tax credit program continues to grow across the country.
What Happened?
On May 20, 2026, the North Carolina House voted 73-46 to override Governor Stein’s previous veto of legislation that would allow North Carolina to participate in the new federal scholarship tax credit program. (wral.com)
The bill now heads to the North Carolina Senate, where lawmakers are expected to consider the override next.
If finalized, North Carolina would officially opt into the federal program created under the federal legislation signed in 2025. Beginning in 2027, eligible taxpayers could receive a federal tax credit for donations made to approved Scholarship Granting Organizations (SGOs). (carolinajournal.com)
Why This Matters
This is bigger than politics.
This is about whether states are willing to position themselves early for what could become one of the most transformational education funding opportunities in decades.
Supporters of the bill argue that the federal program expands educational opportunity for students across multiple educational settings, including:
- Public school students
- Charter school students
- Private school students
- Homeschool students
(wral.com)
The federal program allows private taxpayers to voluntarily redirect a portion of their federal tax liability toward scholarship funding, rather than sending those dollars entirely to the federal government.
That distinction matters.
This is not a traditional voucher program funded directly through government appropriations. Instead, it is a scholarship tax credit model built around private contributions and donor participation.
The Debate Continues
Opponents of the legislation raised concerns about the long-term impact on federal revenues and public school funding. Governor Stein previously stated he would be more open to participation if public schools could also benefit from the program. (newsfromthestates.com)
That conversation is happening nationally right now.
One of the biggest misconceptions surrounding the new Federal Scholarship Tax Credit program is the belief that it only benefits private schools. In reality, the federal legislation was designed broadly enough that states may structure approved scholarship uses for a variety of educational expenses, depending on implementation and federal guidance.
That is why state-level planning matters so much.
What Schools and Organizations Should Be Doing Right Now
Regardless of political position, one thing is becoming increasingly clear:
States that prepare early will likely be positioned far better than states that wait.
Schools, scholarship organizations, and education leaders should already be thinking about:
- Donor development strategies
- Community education campaigns
- SGO partnerships
- Parent communication plans
- Tuition and affordability strategies
- Operational readiness
- Compliance and reporting infrastructure
The schools and organizations that understand scholarship tax credit advancement today will likely have a significant advantage when the program officially launches.
North Carolina Is Not Alone
North Carolina joins a growing list of states actively discussing or moving toward participation in the new federal scholarship tax credit program. Recent comments from governors and lawmakers across the country suggest that both Republican and Democratic leaders are beginning to recognize the potential impact this program could have on families and educational access. (wral.com)
The national conversation is shifting quickly.
And while federal guidance is still developing, one thing is certain:
The states that treat this as “someday” may find themselves years behind the states already building strategy, infrastructure, and community partnerships today.
At , we will continue monitoring developments across the country and helping schools and organizations prepare for what comes next.
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