Thomas Jefferson said that “the execution of the laws is more important than the making of them.” However, laws can’t be executed properly without well-written regulations that follow the intent of the drafters.
In that spirit, Agudath Israel of America and its coalition partners recently submitted detailed comments to the Treasury Department as it prepares to write rules for the new federal scholarship tax credit (FSTC).
Background: Starting in 2027, the FSTC allows individual taxpayers to contribute to a nonprofit scholarship granting organization (SGO) and receive a dollar-for-dollar tax credit worth up to $1700. The SGO then pools the funds and distributes scholarships to eligible students for a wide range of K-12 educational expenses including private school tuition However, in order for SGOs to be approved, the state in which they are located must opt in to the tax credit and include them on a list sent to Treasury. Treasury and the IRS recently requested public input on key issues necessary for implementation.
The Agudah and coalition comment letters identified many examples of how certain interpretations of the statute could be harmful to the implementation of the tax credit as intended. They provided alternative interpretations, important context, and helpful suggestions as requested by Treasury.
“As states begin opting in to the new tax credit this week, it is critical to have clarity on what states and scholarship granting organizations must do in order to comply with federal requirements,“ said Rabbi A. D. Motzen, Agudath Israel of America’s national director of government affairs. “We look forward to continuing to work with stakeholders to ensure smooth implementation of this historic opportunity.”
To read Agudath Israel of America’s comment letter click here.
To read Agudath Israel of New England’s comment letter click here.
To read the Federal Scholarship Tax Credit Coalition comment letter click here.
To read the Council for American Private Education comment letter click here.
Click here to watch Rabbi Avi Schnall and Rabbi A.D. Motzen discuss what was in the comment letters and why it matters.