On June 18, Rhode Island Governor Dan McKee (D) signed H 7163 which requires the Rhode Island General Assembly and the governor to approve any effort to opt into the Education Freedom Tax Credit (EFTC). It specified that the state may only participate if the legislature passes a bill that the governor signs, but does not indicate whether or not Rhode Island will participate in the EFTC.
About the bill, McKee said, "Major decisions with long-term consequences for our students, schools, and taxpayers deserve thoughtful consideration and agreement among Rhode Island's elected leaders. This legislation ensures that participation in this program will be made deliberately and collaboratively."
About the EFTC, McKee said "I remain deeply concerned about the program itself," but indicated that he would consider enrolling depending on eligible uses for the program's scholarships:
"Should future federal guidance allow funds to be used exclusively for purposes such as after-school tutoring, transportation, and educational technology—without supporting private school tuition or voucher-equivalent programs—I would be willing to work with the General Assembly to evaluate participation under those limited circumstances."
The Department of Treasury is responsible for establishing rules for the implementation of the program. The department previewed that rulemaking on June 10 while indicating that it would address some other topics, including eligible expenses, through subsequent guidance. As enacted, the program defines eligible expenses by cross-referencing those for Coverdell Education Savings Accounts, which include tuition at private elementary and secondary schools. Therefore it is unlikely that forthcoming rules or guidance will exclude the use of the EFTC for private school tuition.
Support for the legislation divided mostly along party lines. In the Rhode Island House of Representatives, the bill passed 57-13 on June 10, with 56 Democrats and one Independent supporting it, and five Democrats and 10 Republicans opposing it; five Democrats did not vote. It passed the Senate 34-4 the next day, with all Democrats supporting it and all Republicans opposing it.
Jorge Elorza, CEO of Democrats for Education Reform and former mayor of Providence — who has argued that Democrats should support the program while saying that there should not be rigid programmatic requirements that limit the use of funds for diverse educational needs — said, "Gov. Dan McKee should veto the legislation."
Rhode Island is the first state with a Democratic trifecta to pass a law regarding the EFTC, but six states with a Democratic trifecta have opted into the program. Five states with divided governments and four Republican trifecta states passed legislation requiring participation in the program. In total, 37 states have indicated they will participate.
About the program
The EFTC is a nonrefundable tax credit, allowing individuals to receive federal tax credits for donations up to $1,700 to authorized scholarship-granting organizations (SGOs). It is a dollar-for-dollar nonrefundable tax credit, meaning individuals can lower their federal tax liability by $1 for every $1 donated to accredited SGOs; if a taxpayer donates more than $1,700, they will not receive a tax refund for the amount over $1,700. The total amount of credits the program can offer is not capped.
SGOs distribute donated scholarship funds to eligible families for a variety of private or public educational expenses, including private school tuition, tutoring services, textbooks, and more. To qualify for scholarships, students had to live in households earning no more than 300% of the area's median gross income (AGMI) and be eligible to enroll in K-12 schools. EdChoice published an interactive U.S. map on May 21, 2026, displaying what 300% of AGMI would be for FY 2026 across the country. The program will take effect January 1, 2027.
States that elect to participate must submit a list of SGOs that taxpayers can donate to in order to receive the federal tax credit. Students in states that do not opt in cannot receive scholarships funded under the program, but donors in those states can still receive a federal tax credit by donating to SGOs in participating states. As enacted, the program will not affect state budgets.
Latest news
In addition to Rhode Island's legislation, here is the latest on the program:
- On June 10, the U.S. Treasury released a preview of the guidance that it said it would propose by the end of September. Read our coverage of the preview here.
- On June 3, the North Carolina General Assembly overrode Gov. Josh Stein's (D) veto of a bill requiring the state to opt in.
- On May 7, New York Gov. Kathy Hochul (D) said the state would participate in the program. She became the second Democratic governor to opt in behind Colorado Gov. Jared Polis.
Read Ballotpedia's coverage of the program here, and of state participation in it here.