Secretary of State Michael Adams has formally opted Kentucky into the federal Education Freedom Tax Credit program established under the One Big Beautiful Bill Act, making the commonwealth eligible for a tax incentive that supporters say will expand educational options for K-12 students.

The decision follows the March 2026 veto override of House Bill 1 by the Republican-controlled Kentucky General Assembly. Democratic Gov. Andy Beshear had vetoed the legislation, citing concerns it would divert resources from public schools, but lawmakers voted to override his objection, sending the bill directly to Adams for signature.

Under the program, individual Kentucky taxpayers can claim a dollar-for-dollar federal tax credit up to $1,700 annually for donations to approved scholarship granting organizations (SGOs). Married couples filing jointly can claim up to $3,400 per household, with unused credits carrying forward for up to five years.

The scholarships can fund a range of educational expenses including private school tuition, tutoring services, textbooks, internet access and support services for students with disabilities. Eligibility is limited to K-12 students from households earning at or below 300 percent of the area median income.

Adams' office will establish a list of certified SGOs and submit it to the U.S. Treasury. The program is scheduled to take effect for the 2027 tax year. According to recent reports, Kentucky is the 29th state to adopt the program and only the second with a Democratic governor.

While supporters argue the measure brings supplemental education dollars to Kentucky without using state tax dollars, critics including the Jefferson County Teachers Association contend the program primarily benefits students already attending private schools.