In 2025, Congress enacted the first-ever federal 1-to-1 tax credit for donations to K–12 education scholarships. While championed by President Trump, the program reflects a broader bipartisan vision: empowering families, driving educational innovation, and keeping funding decisions closer to home. But unless Maine lawmakers act swiftly, Maine families and students will miss out on the full benefits – and potentially millions of education dollars donated by Mainers will flow to students elsewhere. 

Maine should pass an emergency bill in early 2026 to certify state-based scholarship-granting organizations (SGOs), enabling Mainers to claim this new $1,700 tax credit in 2027, while supporting Maine students and charities.

If Maine fails to certify SGOs, its residents will still be eligible to claim the federal credit — but only by donating to approved organizations in other states. That would mean missing out on local education funding as it vanishes across state lines at no benefit to Maine students or schools. In a time of stagnant performance and rural access challenges, we can’t afford to let that happen.

A Credit That Applies to Nearly Every Maine Household

The new federal tax credit allows individuals to claim up to $1,700 for donations made to organizations registered with their state to provide scholarships to students attending K-12 schools, as well as to homeschoolers and other alternative learning models.

Scholarships can be granted to any student and used for educational expenses including tuition, fees, tutoring, special needs services, books, supplies, computers, room and board, and transportation.

Contrary to the notion that it helps only high earners, it’s one of the most broadly available tax benefits in federal education policy history, and the money can’t go to scholarships for kids from high-income families–receipients must be from households which earn at or below 300% of a given area’s median gross income as measured by the federal government. 

Here’s why: an individual needs only to owe $1,700 or more in federal income taxes to claim the full credit — and that threshold is remarkably low. In Maine, any taxpayer earning at least $30,702 per year typically pays enough to fully benefit.

Based on Internal Revenue Service data, over 710,000 tax returns were filed in Maine in 2022. Roughly 70% of these filers earn enough to receive the full $1,700 tax credit, while many others could still reduce their federal tax liability by donating up to the amount they owe. In total, approximately 497,000 Mainers could donate the full $1,700.

Even if just 1 in 10 fully eligible Mainers participated, Maine students could receive over $84 million in education scholarships. With average Maine private school tuition sitting at around $22k, that would fully cover tuition for more than 3,800 students, or more than 2% of the state’s total K–12 enrollment, for example.

And that’s a conservative estimate. It assumes that every scholarship covers full tuition. Additionally, it doesn’t account for smaller grants, increased donations over time, or families using scholarships to access specialized services, hybrid programs, or alternative learning models. If every eligible Maine taxpayer took advantage of this credit, over 1-in-5 Maine students would be able to attend their preferred schools with no tuition paid out of pocket.

A No-Cost, High-Impact Opportunity

Unlike state tax credit programs, this new federal initiative doesn’t reduce Maine’s own revenue. The credit is entirely federally funded. That means more funding for scholarships, greater opportunities for students, and a stronger educational infrastructure — all without any direct cost to the state. 

If Maine opts in by certifying SGOs, those donations can be directed to programs rooted in local communities and aligned with Maine’s values. This is a double-edged sword, though, as the federal program allows people to donate to scholarship organizations in other states. If Maine doesn’t register organizations soon, we could see Maine dollars flowing into New Hampshire, Texas, and Florida schools instead of our own. 

This wouldn’t just be a missed opportunity–it would be a self-inflicted wound. By failing to act, Maine would effectively export education funding to other states while receiving none of the benefits.

Tailoring the Program to Fit Maine

Some might worry that embracing this program would force Maine to copy other states’ education models. But that’s simply not the case.

The law explicitly empowers states to create their certification processes for SGOs, including setting priorities for scholarship eligibility, defining geographic or demographic focus areas, and aligning program rules with state-specific educational needs.

Maine could, for example, design a system that:

  • Prioritizes rural and small-town access to alternative schooling options;
  • Supports scholarships for students with learning disabilities, behavioral challenges, or special language needs;
  • Encourages education providers that reflect Maine’s cultural diversity and workforce development goals;

There’s nothing “one-size-fits-all” about this policy. It provides a flexible tool to support student-centered solutions regardless of location. 

The Political Stakes

Some may want to delay action until after the 2026 election. But that delay could be both politically and practically costly.

Failing to act now means denying a nearly universal tax benefit and visible education funding to Maine’s families. That’s a tough sell in any district, especially to parents and voters looking for meaningful improvements in school options.

And politically, waiting could backfire. If a new legislative majority takes power in 2027, it may pass a certification program without incorporating the priorities of today’s majority. The smart move is to act now, shape the policy while the opportunity exists, and demonstrate proactive leadership on a program that serves working-class families.

Conclusion

The federal government has opened the door to transformative scholarship funding, and Maine has only to walk through it. Certifying SGOs in early 2026 is a commonsense, no-cost, only benefit action that would:

  • Keep nonprofit donations in Maine;
  • Unlock potentially tens of millions in scholarships for Maine children;
  • Expand educational access for low- and middle-income families; and
  • Ensure that Maine — not Washington D.C. or other states — controls the terms of local educational opportunity.

This is a rare opportunity where sound fiscal policy, meaningful education reform, and broad-based tax relief converge. Lawmakers should move quickly to ensure that Maine dollars stay in Maine to fund Maine-based education scholarships for Maine students — instead of allowing these dollars to flow to programs in other states. 

The Maine students who need these opportunities shouldn’t be the ones left behind.