New Scholarship Tax Credit: Maryland’s Big Decision

A new federal tax credit will allow individuals to donate to nonprofit scholarship groups and receive a rebate of up to $1,700 on their taxes. The credit is designed to support K‑12 students with:

• Tuition
• Tutoring
• Special services
• Transportation
• Technology

The program begins in the 2027 tax year.

State Participation Requirements

• States must opt‑in by notifying the IRS and selecting approved scholarship groups before January 1, 2027.
• If a state does not opt‑in, families in that state cannot use the credit.

Maryland’s Decision

• Governor Wes Moore must decide whether Maryland will join.
• Join: Donors can fund scholarships that keep students in public schools or transition them to other settings.
• Stay out: Only families in the 20+ states that have already committed will benefit.

How It Works

• Unlike new federal funding, the credit redirects taxpayers’ existing tax liability toward scholarships operated by nonprofits.
• It does not alter state budgets.
• The goal is to enhance opportunities for all students, not just those in private schools.

Perspectives

The Core Question

Should Maryland allow its families to miss out on a federal opportunity that neighboring states can already use? The decision is framed not as politics but as an investment in students’ needs before 2027.