Pennsylvania Senators Announce Legislation to Opt Pennsylvania into the Federal Scholarship Tax Credit
A bipartisan group of Pennsylvania senators is preparing legislation that would seek to ensure Pennsylvania participates in the new federal scholarship tax credit program.
On August 5, 2026, a group of Pennsylvania senators circulated a co-sponsorship memorandum to all Senate members titled “Ensuring Pennsylvania’s Participation in the Federal Scholarship Tax Credit Program.” The memo is Senate Co-Sponsorship Memo 49085 of the 2025–2026 Regular Session.
What Just Happened in Harrisburg
The memorandum was circulated by Senate President Pro Tempore Kim Ward (R-39) and joined by:
- Sen. Joe Pittman (R-41), Senate Majority Leader
- Sen. Scott Martin (R-13), Appropriations Committee Chair
- Sen. Lynda Schlegel Culver (R-27), Education Committee Chair
- Sen. Judy Ward (R-30)
- Sen. Anthony Williams (D-8), Philadelphia
The senators say they plan to introduce legislation in the near future intended to ensure Pennsylvania families and parents can benefit from the new federal educational resources made available through the Federal Scholarship Tax Credit.
Three points from the memo are particularly important.
- Every state is eligible. The memo emphasizes that Pennsylvania is eligible to participate in the new federal program.
- Participation is not automatic. States must affirmatively elect to participate in the federal scholarship tax credit program.
- Pennsylvania has not yet opted in. The memo says Gov. Josh Shapiro has not committed to participation, which the sponsors argue could put millions of dollars in new educational funding for Pennsylvania families at risk.
How the Federal Scholarship Tax Credit Works
The federal law established a new tax credit of up to $1,700 for qualifying contributions made by individual taxpayers.
The credit applies to donations made to qualifying Scholarship Granting Organizations, or SGOs. That federal designation is similar in concept to the scholarship organizations that already participate in Pennsylvania’s Educational Improvement Tax Credit program.
For Pennsylvania students and families to benefit from the federal program, however, the Commonwealth must first elect to participate.
This Is a Co-Sponsorship Memo… Not Yet a Bill
It is important to distinguish the August 5 announcement from introduced legislation.
A co-sponsorship memorandum is circulated among members of the General Assembly before legislation is formally introduced. It allows lawmakers to explain the proposal and gather additional co-sponsors.
As of the memorandum, no bill number had been assigned. The next step will be the introduction of the actual legislation, which will provide the specific statutory language proposed by the senators.
Pennsylvania Is Still Waiting for Federal Guidance
Gov. Shapiro has not yet opted Pennsylvania into the federal scholarship tax credit program. Throughout 2026, his administration’s stated position has been that it is waiting for additional federal guidance before deciding whether Pennsylvania should participate.
Other states have raised similar questions about how the federal program will be implemented and how much oversight, accountability, and flexibility states will retain.
Additional guidance is now approaching. Treasury previewed forthcoming Treasury and IRS guidance concerning implementation of Section 25F in June 2026, and reporting surrounding the Pennsylvania Senate memorandum indicates that fuller federal regulations are expected in September.
What to Watch Next
Two developments will be especially important in the coming weeks:
- The September regulations. Additional federal guidance is expected to address requirements for Scholarship Granting Organizations and the certification process. That guidance could answer many of the questions Pennsylvania officials have cited while considering participation.
- The Governor’s decision. Pennsylvania’s participation ultimately depends on the Commonwealth making the election required under the federal program.
Where Friends of Education Stands
Friends of Education is an approved scholarship organization under Pennsylvania’s Educational Improvement Tax Credit program.
If Pennsylvania elects to participate in the Federal Scholarship Tax Credit, Friends of Education intends to seek inclusion on the Commonwealth’s list of qualifying Scholarship Granting Organizations.
At this time, no Pennsylvania organization appears on a federal list of qualifying SGOs because Pennsylvania has not yet elected to participate in the program.
Friends of Education will continue to monitor the proposed Senate legislation, forthcoming federal guidance, and Pennsylvania’s decision on participation and will share updates as they develop.
Want to be notified when Pennsylvania makes a decision or when new federal guidance is released? Contact Friends of Education.
