Montana chooses opportunity by adopting the new federal education choice tax credit

Montana has taken a meaningful step to expand educational opportunities for families across the state. On January 21, 2026, Governor Greg Gianforte announced that Montana will opt into the nation’s first federal education choice tax credit scholarship program, positioning the state among early adopters of this historic federal initiative and reaffirming its commitment to putting students first.

The Educational Choice for Children Program was created under the One Big Beautiful Bill Act (OBBA) and represents a significant shift in federal education policy. For the first time, federal tax law establishes a permanent, dollar-for-dollar federal income tax credit of up to $1,700 per year for individuals who make cash contributions to qualified nonprofit Scholarship Granting Organizations (SGOs). This is historic, as most education-related tax incentives are deductions or partial credits, which means its value depends on a taxpayer’s tax rate. However, this program offers a 100% credit.

The design of the federal tax credit encourages broad participation while maximizing benefits for students and families. Donors may contribute to approved SGOs and SGOs then use these funds to provide scholarships to eligible K–12 students, expanding access to educational resources at no cost to the state.

Scholarships awarded through the program may be used to support students in all education settings, including public, charter, private, religious, and homeschool programs, with funding directed toward tuition, tutoring, curriculum, educational software, technology, and specialized services. This flexibility allows families to address learning gaps, pursue enrichment opportunities, and tailor educational experiences to their children’s individual needs.

Importantly, the OBBA places no limit on the total amount of scholarship funding a family may receive and does not require families to choose between programs. Montana families may continue to participate in existing state-based education initiatives while also using scholarships funded through the new federal tax credit. This layered approach recognizes that no single education model works for every student and creates an opportunity for states to thoughtfully align federal and state programs.

For states like Montana that already offer education choice, the new federal credit provides a chance to strengthen and harmonize existing systems. By opting in early, Montana has the opportunity to align eligibility rules across existing programs to help ensure that families understand their options and can access the full range of resources available to them.

State participation in the federal program is voluntary, and students may only receive scholarships if their state formally opts in. While taxpayers nationwide may donate to SGOs, families in nonparticipating states are excluded from receiving funds. Montana’s decision aligns it with neighboring Idaho, which has also opted into the program, while Wyoming and Washington continue to consider participation but have not yet formally signed on.

This contrast underscores the importance of timely action: states that move forward ensure their families are eligible to benefit, while those that delay risk leaving educational resources unused, and face tighter implementation timelines.

By opting in early, Montana ensures its families will have access to this new source of educational support when the program launches in 2027. Participation comes at no cost to state taxpayers and relies entirely on voluntary charitable contributions, while opening the door to new educational possibilities for students across the state.

Governor Gianforte’s leadership reflects a growing recognition that families deserve access to every available educational resource. By embracing the federal education choice tax credit scholarship program and by thoughtfully aligning it with existing state initiatives, Montana is empowering parents, supporting students with diverse learning needs, and demonstrating how federal and state policies can work together to expand opportunity and strengthen educational outcomes.

In choosing to opt in, Montana has sided with more education opportunities for families and students.