No, Vermont lawmakers have explicitly moved to block the state’s participation in the federal Education Freedom Tax Credit program. This decision prevents Vermont families from accessing dollar-for-dollar federal tax credits of up to $1,700 for donations to local scholarship organizations.
Why is there confusion around the federal tax credit?
Many families heard the news of a new federal program designed to provide $10 billion in scholarship tax credits nationwide. This program, often called the Education Freedom Tax Credit (EFTC) or Section 25F of the Internal Revenue Code, was intended to help parents offset the rising costs of private, parochial, or specialized public education. However, the federal law includes a provision that allows individual states to opt out. Because Vermont has a long history of “town tuitioning,” many parents naturally assumed this new federal benefit would simply integrate with our existing system.
What changed in the Vermont legislature?
The tension lies in a shift toward centralized control over education funding. While Vermont property taxes are rising sharply, the House Ways and Means Committee recently introduced H.933. This miscellaneous tax bill does two things: it designates the Vermont General Assembly as the sole authority to decide on the program, and then it explicitly states that Vermont shall not participate. The tension is between a federal policy designed to empower individual donors and a state policy that views such credits as “loopholes” that might circumvent the state-controlled education system.
Who has the authority over a child’s education?
Our team operates from the conviction that God has granted parents, not the state, the primary responsibility for the education and upbringing of their children. This is a matter of parental stewardship. We believe that because God is the sovereign authority over all of life, the resources provided through the common grace of economic policy should be available to help parents fulfill this divine mandate. When a state blocks a neutral federal tax credit, it creates a barrier to the educational freedom that allows families to seek a curriculum that aligns with their deeply held biblical values.
What does the law actually say?
According to the text of H.933 and the previous bill H.770, Vermont is using its “opt-out” power under 26 U.S.C. § 25F. During committee hearings on February 11, legislative counsel confirmed that the federal credit is not a Vermont-funded program and would not cost the state treasury any money. Despite this, the committee chair expressed a desire to block the program to prevent “workarounds” to the current state-level education structure. As of now, the bill effectively voids any attempt by the Governor or executive agencies to enroll Vermont in the program.
What should Vermont parents do next?
While the state has moved to block this specific federal credit, your role as the primary educator of your child remains unchanged. I recommend taking these three steps:
- Monitor the Senate: The bill has passed the House committee, but the Vermont Senate may still take a different path. Contact your state senator to share how a $1,700 tax credit would help your family’s specific needs.
- Stay Informed: Join our mailing list to stay informed on all of the current EFTC issues.
- Review Act 73: Understand that other state-level changes to “town tuitioning” are also in motion, which may further restrict where your public tuition dollars can be used.
Why does this matter for your family?
This matters because education is not a “one size fits all” service provided by the government; it is the formation of a human soul. 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 us to be diligent with our resources, and we will continue to advocate for policies that return that authority to your kitchen table.
Source: https://vermontdailychronicle.com/vt-blocks-federal-scholarship-tax-credit-amid-rising-education-costs/amp/ “For educational use only. Not tax/legal advice. Details subject to pending IRS guidance and state approval.”