The Education Freedom Tax Credit (ECCA), a new federal program pushed heavily by Agudath Israel that will help families cover the cost of private school tuition, tutoring, and other school expenses is moving closer to reality, and the Treasury Department just took another step to get it ready.

The ECCA was created as part of President Trump’s Working Families Tax Cuts Act, and it officially starts in January 2027. The the Treasury Department this week released a preview of ECCA’s rules so that families, schools, and donors can prepare in time.

So how does it actually work? It comes down to a swap. Instead of sending some of your federal tax money to Washington, you can send it to a scholarship fund that helps children pay for school.

Here is a simple example. Say you owe $1,700 in federal income taxes. If you donate $1,700 to an approved scholarship fund, you get that full amount back as a credit on your tax bill. In the end, you do not pay more than you would have anyway. Your money just goes to scholarships instead of to the government. The most any one person can claim is $1,700 a year, but if you cannot use the whole credit at once, you can carry the leftover amount forward for up to five years.

These approved scholarship funds are nonprofits known as Scholarship Granting Organizations, or SGOs. They collect the donations and hand out scholarships to children. There is no limit on how big a single scholarship can be. That is set by each fund. The money can be used for a lot more than tuition, including tutoring, school supplies, uniforms or equipment for job-training programs, and help for children with disabilities.

There is one important catch. Each state has to choose to join the program before its families can benefit. Once a state signs up, it gives the government a list of approved scholarship funds in that state, and donors give to the funds on that list. As for which children can receive a scholarship, the rule is broad. A child qualifies if they are old enough for public school and their family earns up to three times the typical income in their area, which covers most families in the states that join.

For the frum community, this is the result of years of hard work, much of it by Agudath Israel of America. Agudah helped write and push the legislation behind the credit, the Educational Choice for Children Act, working with the lawmakers who sponsored it. Its staff sat through hundreds of meetings and told Congress directly about the heavy burden yeshiva tuition places on parents, and the organization rallied thousands of letters from people across the country. The bill was signed into law on July 4, 2025. Agudah’s team, led by Rabbi A.D. Motzen, Rabbi Yossie Charner, and Rabbi Avi Schnall, is now pushing every state to join so more families can use it.

The Treasury fact sheet said 15 states had signed on as of January 20, and Agudah said that number had already climbed to 23 by early February.

The impact could be huge, with one estimate projecting $24 billion in new scholarship money every year. And because the whole thing runs on voluntary donations, Treasury says it does not take a single dollar away from public schools. Families can start using the credit for donations made on or after January 1, 2027.

(YWN World Headquarters – NYC)