NC private school families could get federal tax break. Lawmakers send bill to Gov. Stein
North Carolina parents who send their students to private schools could get a federal tax break if a bill passed by the General Assembly on Wednesday becomes law.
The bill was sent to Democratic Gov. Josh Stein to sign or veto.
The legislation doesn’t cost the state anything, Republican supporters said, but rather allows the state to participate in the federal tax credit that Republican President Donald Trump pushed in his mega spending bill, the Big Beautiful Bill Act, which became law earlier this month.
House Bill 87 was passed by the Senate on Tuesday, and by a final vote on Wednesday in the House.
The State Education Assistance Authority would run the participation in the program, according to the legislation, and create the list of scholarship-granting organizations that are eligible. It would also be posted on its website.
The bill summary explains that it would let “any taxpayer to receive a federal tax credit equal to the amount of their charitable contributions to qualifying scholarship granting organizations, up to $1,700, in taxable years beginning after Dec. 31, 2026.”
Republican House Speaker Destin Hall said the state’s Opportunity Scholarship Program, which provides private school vouchers, “is an important program, giving parents school choice about where they send their kids to school,” and that because participating in the federal tax credits doesn’t cost the state money, it was “frankly, in my opinion, a no brainer for us to do that.”
Hall said Republicans in both the House and Senate worked on the bill over the past week.
Senate leader Phil Berger said the federal tax credit also would have no impact on state revenue, though it would cost money for the education authority that maintains the list.
“It was our feeling that we needed to go ahead and get that moving,” Berger told reporters about why they decided to pass the bill in such a short time.
Democratic Rep. Julie von Haefen, a Wake County Democrat, said that fully reimbursing $1,700 in private school tuition, “bankrolled by the federal government” is a “fiscal disaster waiting to happen,” saying the tax break subsidizes private education to people who can already afford it.
Von Haefen said there should be public accountability for public dollars, and said the tax break “diverts attention and resources to private alternatives that serve only a privileged few.”
During the Senate debate, Democrats criticized the federal bill, saying allowing North Carolina to participate in the tax break could negatively impact public schools.
“The federal voucher program is an unprecedented dollar for dollar tax credit, where every dollar an individual donates to a scholarship-granting organization will most likely pay for private school tuition,” said Sen. Jay Chaudhuri, a Raleigh Democrat.
“This might sound like free money, but let’s be clear, it’s actually the opposite. Every dollar the federal government gives out in tax credits is a dollar no longer paying for public schools,” Chaudhuri said.
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