Gov. Gretchen Whitmer is reviewing federal rules before a Jan. 1 deadline to opt Michigan into a tax-credit program that could fund scholarships. Which expenses would qualify remains unclear.
Treasury rules issued Oct. 1, 2026, are under review by Gov. Gretchen Whitmer's administration, Chalkbeat Detroit reported. Michigan must decide by Jan. 1 whether to join the federal school tax-credit program for 2027. Whitmer has not announced a decision.
The program was created by the One Big Beautiful Bill Act, signed in July 2025, and takes effect Jan. 1, 2027. Taxpayers who donate to qualifying scholarship-granting organizations can claim a federal tax credit. Those organizations then award scholarships to families. The maximum credit is $1,700 for an individual taxpayer and $3,400 for a married couple filing jointly. The credit goes to the donor, not directly to a family.
Scholarships could cover private school tuition or tutoring. They may also pay for after-school programs. Computers could qualify, along with room and board in some cases. The expenses covered will depend on federal rules and the scholarship organization, so joining would not guarantee the same coverage for every family.
Under federal requirements described by The Spokesman-Review, a scholarship-granting organization must award scholarships to at least 10 students attending 10 different schools. It must spend at least 90% of its funds on scholarships. A state that opts in must send federal officials its list of qualifying organizations by Feb. 15, 2027. States must decide each year whether to participate.
As of the Oct. 13 report, 31 states had opted in. Michigan was among 19 states that had not decided. If the state stays out, students in Michigan would not receive scholarships through the program as Michigan participants. Taxpayers may still be able to donate to organizations in states that join.
Michigan has no state school-voucher or private-school tax-credit program. Its constitution bars public money or tax benefits from going to nonpublic schools, including private and denominational schools. That raises a legal and political question about how the federal program fits with the state's constitutional provisions.
The Michigan State Board of Education adopted a resolution in May 2026 opposing participation. It said federal education policy should focus on strengthening public schools. The resolution does not decide the issue for Whitmer. Her deadline to opt in for 2027 is Jan. 1.
The choice has entered the 2026 gubernatorial campaign. Republican candidate John James' campaign says he would opt Michigan in "on day one." Democratic candidate Jocelyn Benson opposes participation. Whitmer's decision must come before the next governor's term.
The proposed credit would create a possible source of scholarship funding alongside existing public and private school financing. A separate earlier Michigan report found public school spending exceeded $23,000 per student. It also described a decline in third-grade reading proficiency since 2019, despite new laws and increased investment. That report covered school spending and test results, not the effects of the federal tax credit.
If Michigan opts in, the state must submit its list of qualifying scholarship-granting organizations by Feb. 15, 2027.
