Over 30 states have joined the federal Education Freedom Tax Credit (EFTC). The most populous one has not, and until late June, no California lawmaker had formally asked the governor to reconsider.
On June 23, 2026, Assemblymember Josh Hoover introduced Assembly Concurrent Resolution 229, urging Governor Gavin Newsom to submit California’s election to participate in the federal program. Assembly Members Castillo, Hadwick, and Sanchez signed on as coauthors.
The resolution carries an estimate: if California participates, its residents could access up to $4.91 billion in scholarship contributions between 2027 and 2029.
Here is the honest answer to the question most readers arrive with. Nothing has changed about California’s status. The resolution expresses the will of legislators who sign it, and it cannot compel the governor to act.
What the Education Freedom Tax Credit Actually Is
Start with the mechanics, because the policy fight makes no sense without them.
The EFTC, written into federal law as Section 25F of the tax code, became law on July 4, 2025 as part of the One Big Beautiful Bill Act. Beginning January 1, 2027, an eligible taxpayer may make a charitable contribution to a nonprofit that awards K-12 scholarships, formally called a Scholarship Granting Organization (SGO), and later claim a dollar-for-dollar federal tax credit of up to $1,700 when filing.
The sequence matters. The gift comes first. The credit is claimed afterward, at tax filing, and it reduces federal income tax liability rather than functioning as a refund or an immediate offset.
One more piece separates this credit from most federal programs: it only reaches families in states that choose to participate. A governor or, in some states, a legislature must file the federal election. That is the decision sitting unmade in California.
Why California’s Absence Is Different From Any Other State’s
Every state that stays out leaves something unclaimed. California leaves the most, because it has the most residents who could give and the most students who could receive.
As of publication, Newsom has taken no public position on Section 25F. No bill authorizing participation or designating scholarship organizations has advanced in the 2025-2026 session. California has not filed IRS Form 15714, the form states use to make the election, and has not submitted a list of SGOs to the Treasury Department.
That means the largest pool of eligible families in the country currently sits outside a program over 30 states have joined.
The cost of waiting is real, and it is also bounded. The election is annual. A state that declines for 2027 may still participate in 2028 or any year after.
Two Very Different Groups, One Request
ACR-229 is not the first pressure Newsom has felt on this question. It is the first to come from inside the Capitol.
Earlier in 2026, students at a Los Angeles parish school organized what they called the Purple Postcard Campaign, mobilizing more than 1,100 students to ask the governor to file California’s election. The effort drew support from a Democratic-aligned coalition that included Democrats for Education Reform and the California Catholic Conference.
The result? Two constituencies with little else in common making the same request, one from a parish hallway and one from a committee docket.
The argument they share is arithmetic rather than ideological. The credit does not spend state money. It allows a state’s own residents to reduce their federal taxes by funding scholarships for children nearby, which is the reasoning that has persuaded governors of both parties elsewhere.
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Why the Resolution Will Probably Not Pass, and Why That Isn’t the Whole Story
Be precise about where ACR-229 stands. As of its latest recorded action, the resolution had come from the printer and was awaiting committee referral, the earliest stage in the process.
A resolution carried by Republican members in a Legislature with a Democratic supermajority faces an uncertain path to a floor vote. Supporters describe it as forcing a conversation. Its critics have not needed to organize opposition, because procedural inertia may settle the matter without a vote.
What the resolution does accomplish is narrower and more durable. It places the participation question on California’s official legislative record, framed as a specific dollar figure rather than an abstract debate.
Legislative records have a way of outlasting legislative sessions. The next time the question surfaces, it will not be the first time.
What This Means If You Live in California
If you are a California taxpayer who has been reading about the federal credit and wondering whether you can participate, the answer today is no, and it may change.
Until California files its election, residents cannot claim the credit for contributions supporting scholarships in their own state. Their credit-eligible dollars, if given, would support scholarship organizations elsewhere.
If you are considering building a scholarship organization in California, the practical signal from June is that pressure now comes from two directions while the governor’s position remains unstated. Nothing about the resolution changes what an operator can do today.
For families, the timeline is worth separating carefully. The law’s effective date, the January 1, 2027 program launch, the availability of contributions, and your state’s participation are four different things. We keep them apart in our EFTC timeline and in our explainer on how states opt in.
What to Watch Next
Three things will tell you where this goes.
First, whether ACR-229 receives a committee referral or stalls quietly. Second, whether Newsom addresses Section 25F publicly, in a budget document or otherwise. Third, whether Treasury’s final regulations, still pending as of publication, change how attractive participation looks to states weighing administrative cost.
The annual nature of the election means California’s story does not end in 2027. It just starts later than everyone else’s.
Where AFC Scholarship Fund Fits
Until the program opens on January 1, 2027, we will continued to publish plain-language explainers for people trying to understand a credit that has not started yet, including who is eligible.
If you want to know where your state stands and what happens next, sign up for updates. No donation is possible before January 1, 2027, and we will tell you plainly when anything changes.
No. As of publication, California has not filed IRS Form 15714 or submitted a list of Scholarship Granting Organizations to the Treasury Department, and Governor Gavin Newsom has taken no public position on the program.
No. A concurrent resolution expresses the will of the Legislature. It does not change law and cannot require a governor to act. As of its latest recorded action, ACR-229 was awaiting committee referral.
Yes. The election is made annually, so a state that does not participate in 2027 may participate in 2028 or a later year.
Not yet. The federal credit applies to qualified contributions beginning January 1, 2027, and final Treasury regulations are still pending. Eligible taxpayers may then claim a dollar-for-dollar credit of up to $1,700 (Treasury rules pending) at filing.
Residents of non-participating states cannot claim the federal credit for scholarships in their own state. Contributions made to scholarship organizations in participating states support students there instead.
