The New National School Choice Law Was Signed. Now What?

By Rabbi AD Motzen, National Director of Government Affairs, Agudath Israel of America

On Friday, I shared the good news about the new national school choice law that will help students across the country.

Many of you had questions about how it works and what are the next steps.

What does it mean?

1. Beginning in 2027, donors in all 50 states can receive a dollar-for-dollar tax credit for contributing to nonprofit scholarship organizations. These nonprofits will then provide K-12 scholarships to eligible students.
2. The maximum contribution amount is $1700 per taxpayer, but there is no overall cap, allowing communities to raise money from any taxpayer across the country .
3. The credit is now permanently in the tax code so the only reason we have to go back to Congress is to make it bigger and better.
4. Most families in our communities will be able to benefit from a scholarship thanks to the generous income threshold which is determined by the family’s place of residence (see here for chart)

To learn more about this exciting opportunity and hear some of the inside story of how we got there, please watch Tuesday’s livestream here.

For a simple summary of the bill please click here. We will be creating an FAQ that will be updated as questions come in.

What’s Next?

Agudah is already working with our regional offices and coalition partners to ensure that each state chooses to participate and that every community will be able to benefit from this new tax credit opportunity. There is more work to be done to ensure that Treasury’s rules will help maximize participation and ease implementation. We will also continue our work to expand school choice on the state and federal levels including making this law bigger and better in the future.

Thank you to those who offered their thoughts and many prayers – this was nothing short of a miracle so the tefilos really helped! We saw the hand of Hashem many times throughout this process and while many people served as His messengers, we are truly grateful to the One above for this great breakthrough for families.

P.S. What else is in the bill?

The nearly 900-page One Big Beautiful Bill Act contains many policies that will affect Americans in different ways and we will be providing more information about some of the highlights of the bill and how they may affect you and your community in the days ahead.

Some of the new tax policies that benefit families with young children include:

• enhanced Child Tax Credit
• increased Child and Dependent Care Credit
• “Trump accounts” of $1000 per child
• doubling of annual withdrawal limits for 529 accounts from $10,000 a year to $20,000
• widening the definition of 529 “qualified expenses”

Additional changes include increased deductions for seniors and a new “above the line” charitable deduction of up to $2,0000 (if married filing jointly) for those who don’t itemize.