Can I Use the Federal Education Freedom Tax Credit for My Child’s Schooling in Vermont?

Why is there confusion around the federal tax credit?

Families heard about a new federal program providing $10 billion in scholarship tax credits nationwide — the Education Freedom Tax Credit (EFTC), codified at Section 25F of the Internal Revenue Code — designed to help parents offset the rising cost of private, parochial, or specialized public education. But the federal law lets individual states opt out. Because Vermont has a long history of “town tuitioning,” many parents naturally assumed the new federal benefit would simply plug into the existing system. It will not.

What changed in the Vermont legislature?

The shift is toward centralized control of education funding. Even as Vermont property taxes climb sharply, the House Ways and Means Committee introduced H.933 — a miscellaneous tax bill that does two things: it names the Vermont General Assembly as the sole authority to decide on the program, and it explicitly declares that Vermont shall not participate. A federal policy built to empower individual donors now collides with a state policy that treats such credits as “loopholes” around the state-controlled education system.

Who has authority over a child’s education?

Our team operates from the conviction that God has granted parents, not the state, primary responsibility for the education and upbringing of their children. This is a matter of parental stewardship. Because God is the sovereign authority over all of life, resources provided through the common grace of economic policy should be available to help parents fulfill that mandate. When a state blocks a neutral federal tax credit, it erects a barrier to the educational freedom that lets families seek a curriculum aligned with their deeply held biblical values.

What does the law actually say?

Under the text of H.933 and the earlier H.770, Vermont is exercising its “opt-out” power under 26 U.S.C. § 25F. In committee hearings on February 11, legislative counsel confirmed that the federal credit is not a Vermont-funded program and would cost the state treasury nothing. The committee chair nevertheless expressed a desire to block the program to prevent “workarounds” to the current state-level education structure. As it stands, the bill effectively voids any attempt by the Governor or executive agencies to enroll Vermont.

What should Vermont parents do next?

The state has moved to block this specific federal credit — but your role as the primary educator of your child is unchanged. We recommend three steps:

• Monitor the Senate.The bill passed the House committee, but the Vermont Senate may still chart a different course. Contact your state senator and share how a $1,700 tax credit would help your family’s specific needs.
• Stay informed. Join our mailing list to keep up with every current EFTC development.
• Review Act 73.Other state-level changes to “town tuitioning” are also in motion and may further restrict where your public tuition dollars can be used.

Why does this matter for your family?

When the state blocks access to federal credits, it limits your ability to choose an environment where your child can flourish academically and spiritually. Stewardship requires diligence with our resources — and we will keep advocating for policies that return that authority to your kitchen table.