The sharpest policy fight in Thursday night’s first debate between Gov. Maura Healey and Republican Mike Minogue was over a federal tax credit most Massachusetts voters have never heard of. Minogue said he would opt Massachusetts into it and that it could bring in $1.7 billion. Healey said “there’s no basis” for that figure and that a tax credit is “not an education plan,” according to WCVB and CommonWealth Beacon.
Both candidates were describing the same law: the Federal Scholarship Tax Credit, created by last year’s One Big Beautiful Bill Act and codified at 26 U.S.C. § 25F. It takes effect January 1, 2027, and only the governor can decide whether Massachusetts participates. Here is what the law says, what opting in would do, and where each candidate’s numbers come from.
What the debate was about
- The debate, hosted by WBZ-TV and moderated by Jon Keller, centered on affordability, education and President Donald Trump, WCVB reported.
- Minogue said he would opt into the federal scholarship tax credit and that it could bring in $1.7 billion, CommonWealth Beacon reported. Healey countered that the program came from the same federal law that included more than $1 trillion in health care cuts.
- A PolitiFact fact-check published by WCVB concluded that the $1.7 billion figure “is not a guaranteed amount” but is “not made up.” It depends on how many people donate. To reach $1.7 billion, at least 1 million individual taxpayers, or 500,000 married couples, would have to give the maximum, PolitiFact said.
The law: 26 U.S.C. § 25F
The statute gives an individual a federal income tax credit equal to the “qualified contributions” they make in a year, capped at $1,700. The key pieces:
- Dollar for dollar. It is a credit, not a deduction. A $1,700 donation reduces your federal tax bill by up to $1,700. The donation cannot also be claimed as a charitable deduction, and any state tax credit for the same gift reduces the federal one.
- Where the money goes. The donation must be cash to a “scholarship granting organization,” a 501(c)(3) charity that is not a private foundation, that keeps the money in separate accounts, spends at least 90 percent of its income on scholarships, serves 10 or more students who do not all attend the same school, and does not earmark gifts for a particular student.
- Who can get a scholarship. An “eligible student” is one whose household income is not greater than 300 percent of the area median gross income and who is eligible to enroll in a public elementary or secondary school.
- What it pays for. Scholarships may cover only “qualified elementary or secondary education expense[s],” defined by cross-reference to the expenses allowed for Coverdell education savings accounts in 26 U.S.C. § 530(b)(3)(A).
- When. The section applies to taxable years ending after December 31, 2026.
Why the governor decides
The credit only works through a “covered State,” defined as a state that “voluntarily elects to participate” and identifies scholarship granting organizations within it. Under § 25F(g):
- A participating state must give the Treasury a list of qualifying scholarship organizations located in the state, by January 1 of each year, or “as early as practicable” for the first year.
- “The election under this paragraph shall be made by the Governor of the State or by such other individual, agency, or entity as is designated under State law.”
- A “qualified contribution” must fund scholarships “solely within the State in which the organization is listed.”
In other words, no state list means no in-state organizations eligible for the credit. As the Salem News, reprinting State House News Service, summarized it: “To claim the credit of up to $1,700, a taxpayer must contribute to a scholarship granting organization located in a state that has opted into the program and has submitted a list of qualified organizations.”
Where things stand
- 27 states are in. According to the IRS, as reported by the Salem News, the states that have opted in include Alabama, Florida, New Hampshire, Ohio, Texas, Virginia and 21 others, mostly led by Republicans. New York’s Democratic governor, Kathy Hochul, has announced her intent to opt in, according to a Pioneer Institute letter quoted in the same report.
- Some Democratic governors have said no. Wisconsin Gov. Tony Evers vetoed a bill to opt his state in, and Kentucky’s legislature overrode Gov. Andy Beshear’s veto of an opt-in bill, the Salem News reported.
- Healey has not decided. Her office referred questions to the Executive Office of Education, whose spokesman said the administration was waiting on guidance from the U.S. Treasury and Department of Education, according to the Salem News.
- Minogue’s connection. Minogue has said he and his wife helped make the credit federal law. His wife, Renee, serves on the board of the Catholic Schools Foundation, which describes itself as the largest K-12 scholarship granting organization in Massachusetts, according to his campaign as reported by the Salem News.
The arguments
For opting in. Supporters, including the Pioneer Institute, Republican legislators and the Worcester Regional Chamber of Commerce, argue Massachusetts residents will otherwise watch scholarship dollars flow to other states. Chamber president Tim Murray estimated the credit could generate $660 million a year in Massachusetts, the Salem News reported.
Against. In his veto message, Wisconsin’s Evers called it a “nationwide voucher program” and wrote that it has “no student achievement metrics, no school accountability measures, no minimum or maximum scholarship size, no certain end date, and no cap on how much the federal government can spend,” according to the Salem News. Healey argued Thursday that a tax credit is “not an education plan,” CommonWealth Beacon reported.
What it would mean for families
- Donors. If Massachusetts opts in, a taxpayer could give up to $1,700 to a listed in-state scholarship organization and cut their federal tax bill by the same amount, starting with the 2027 tax year.
- Parents. Scholarships would go to students from households at or below 300 percent of area median income, decided by the scholarship organizations, not the state. The statute requires organizations to give priority to returning recipients and then to siblings of recipients.
- Public schools. The statute allows scholarships for any expense covered by § 530(b)(3)(A), which is not limited to private school tuition. How much would go to public school students depends on which organizations a state lists and how they award money.
Frequently asked questions
What is the Federal Scholarship Tax Credit?
A federal income tax credit of up to $1,700 for cash donations to qualifying K-12 scholarship organizations, created by the One Big Beautiful Bill Act and codified at 26 U.S.C. 25F. It applies starting with taxable years ending after December 31, 2026.
Has Massachusetts opted in?
Not as of this report. The Healey administration has said it was waiting on federal guidance. Mike Minogue has said he would opt in on his first day as governor.
Who decides whether Massachusetts participates?
Under 26 U.S.C. 25F(g), the election is made by the governor or by whoever state law designates. The state must then submit a list of eligible scholarship organizations.
Is the $1.7 billion figure real?
PolitiFact, writing for WCVB, called it possible but not guaranteed. It assumes about 1 million Massachusetts taxpayers each donate the full $1,700.
Who qualifies for a scholarship?
Students eligible to enroll in public school whose household income is not more than 300 percent of the area median gross income.
Sources: WCVB (including a PolitiFact fact-check) and CommonWealth Beacon coverage of the October 8, 2026 debate; Salem News (State House News Service) on the opt-in debate, including IRS participation figures and statements by the Healey administration, Minogue, Tim Murray and the Pioneer Institute. 26 U.S.C. 25F read in full at the Legal Information Institute. Candidates’ claims are reported as made. General information about the law, not tax or legal advice.