Vermont Governor Phil Scott signed H.933 into law on June 18, 2026, establishing state-level regulations for participation in the federal Education Freedom Tax Credit (EFTC) program. The law restricts scholarship use to public school students and those attending eligible independent schools, mandates non-discrimination, and imposes reporting and audit requirements on Scholarship Granting Organizations (SGOs).

H.933 limits scholarship funds to benefit only public school students or students attending independent schools eligible to receive public funds. Of the four types of independent schools in Vermont, only Approved Independent Schools and Therapeutic Approved Independent Schools are eligible to receive public funds.

The legislation requires SGOs to award scholarships solely for after-school programs, programs during school breaks, or supplemental tutoring that are educational in nature. H.933 prohibits SGOs from discriminating against any student based on race, color, religion, ancestry, national origin, sex, sexual orientation, gender identity, place of birth, crime victim status, age, or disability status when determining scholarship awards.

Under the law, the governor or their designee may annually opt Vermont into the EFTC program and is authorized to audit any SGO participating in or seeking to participate. To qualify, an SGO's core mission must be to provide educational opportunities to economically underprivileged students. SGOs must also submit annual reports to the Vermont House and Senate Committees on Education detailing the number and amount of scholarships awarded, donations received, and operating expenses.

H.933 states that if any provisions are invalidated by a federal act, federal agency rule, or court, the Vermont Attorney General must notify the Governor, the Speaker of the House, and the President Pro Tempore of the Senate. In such an event, the state may not participate in the EFTC program until the Legislature enacts new legislation addressing invalid provisions. The House passed H.933 on March 27, 2026, and the Senate passed it on May 5, 2026.

The EFTC is a nonrefundable federal tax credit allowing individuals to receive credits for donations up to $1,700 to authorized SGOs. The total amount of available credits is not capped. To qualify for scholarships, students must reside in households earning no more than 300% of the area's median gross income and be eligible to enroll in K-12 schools. The program is scheduled to take effect on January 1, 2027.

States that participate must provide a list of SGOs to which taxpayers can donate. Students in states that do not opt in cannot receive scholarships funded under the program. However, donors in non-participating states can still receive a federal tax credit by donating to SGOs in participating states. The program will not affect state budgets. As of June 30, 2026, 31 states have either opted in or indicated their intention to do so. The U.S. Department of the Treasury had not issued regulations to implement the program as of that date, though a June 10, 2026 preview stated that states would likely not be authorized to issue standards stricter than federally required. The Treasury expects to propose regulations in September 2026.