Pro-school choice Jewish groups praised the Trump administration on Thursday for new regulations that they say will effectively double an education tax credit for married couples.
Under the One Big Beautiful Bill Act passed in 2025, “any taxpayer” could receive a $1,700 credit for payments to charities that disburse K-12 scholarships. In new guidance released on Thursday, the U.S. Department of the Treasury clarified that it interprets the legislation to mean that a married couple filing jointly may receive a $3,400 credit.
Nathan Diament, executive director of the Orthodox Union Advocacy Center, said these were “essential provisions” for advocates of religious school choice.
“That literally doubles the potential for this program to transform the math of funding Jewish education in America,” Diament told JNS.
Sheila Katz, chief Jewish life officer for Jewish Federations of North America, said that the tax credit “creates an opportunity that has never existed before.”
“For the Jewish community, this has the potential to make Jewish day school more affordable and will drastically increase access to Jewish education for generations to come,” she stated.
The Trump administration hailed the underlying program, which is set to take effect in 2027, as “the largest expansion of school choice in history.”
“The Education Freedom Tax Credit marks a new chapter in educational freedom and opportunity by establishing America’s first nationwide school choice program and empowering states to give students and families more options,” stated Scott Bessent, U.S. treasury secretary.
While the credit is available nationwide, individual states must opt in to the program. So far, 30 states have done so.
Although a handful of blue states, including Colorado and New York, have said that they will participate, the holdouts are mostly among Democratic strongholds in the northeast, midwest and Pacific coast.
Rabbi A.D. Motzen, national director of government affairs at Agudath Israel of America, which has advocated for states to enter the program, told JNS that the newly promulgated rules should create an incentive for those remaining states to join.
“If they don’t opt-in, the money from their state will flow out because donors in their state will contribute to scholarship organizations, and therefore to kids, in other states,” he said. “We think that once governors read these rules, from our conversations, many of them will opt-in.”
Under the system, the path from a donation to the funding of a child’s education is indirect. Donors will be able to give money to “scholarship granting organizations,” which are charities that in turn disburse education funding for both private and public school needs, and then receive a tax credit from the government for the donation. The donation cannot be earmarked to fund the tuition of the donor’s own children.
An open question regarding the tax credit was whether governors would be able to restrict the kind of scholarship granting organizations that are eligible. States opposed to school choice might have tried to limit eligibility to those charities that provide additional funds to public school students, for instance.
The Trump administration said on Thursday that it would bar states from excluding any charity that met the federal requirements for inclusion.
“The proposed regulations ensure that scholarship granting organizations are able to conduct their scholarship-granting activities with the maximum flexibility permitted under the statute,” the IRS stated.
Motzen told JNS that the broad definition of “scholarship granting organization” should benefit both states with existing school choice programs and those that do not.
“Even states like New York, which doesn’t have a scholarship on a state level that the state is involved in, there are private scholarship organizations that help kids,” he said. “Those scholarship funds exist. The infrastructure exists. The donors exist.”
“Now they can get more donors, because until now they were relying on the charitable donations of wealthier people who have the extra income to make those charitable donations,” he said. “Now they can go to every person who has tax liability—even if it’s $100—and can accept donations and give a tax credit in return.”
Rep. Tim Walberg (R-Mich.), chairman of the House Education and Workforce Committee, touted the guidelines as a “major step” for school choice.
“Parents know their children best, and they deserve the freedom to choose the education that works best for their family,” Walberg stated. “The Education Freedom Tax Credit will give millions of families more options and more control over their children’s education, regardless of their ZIP code or income.
