Secretary of State Michael Adams signed House Bill 1 on Tuesday, officially positioning Kentucky to participate in a federal scholarship program that will allow state residents to receive dollar-for-dollar federal tax credits for donations funding K-12 education. The measure was enacted after the legislature overrode Gov. Andy Beshear's veto on March 17.

The Education Freedom Tax Credit program, established by federal law in 2025, enables individuals to claim federal tax credits up to $1,700 annually for contributions to qualifying scholarship-granting organizations (SGOs). The state said in a statement that eligible students can use the scholarships for tuition, tutoring services, textbooks, internet access and other educational expenses at public or private schools.

"With House Bill 1, our commonwealth has stepped up to provide families with an opportunity to exercise their freedom of education," said Rep. T.J. Roberts, a bill sponsor. Rep. Kim Moser, the primary sponsor, said the measure "brings federal tax dollars back to our commonwealth that can support every child, no matter where or how they are educated."

The Senate voted 31-5 to override Beshear's veto on March 17, following a House vote a day earlier. Beshear had criticized lawmakers for placing administrative authority with the secretary of state rather than the governor, and said he believed "public dollars should only be used for public education." However, bill supporters argued the program uses federal tax credits—not state funds—for private donations.

Under federal rules, all K-12 students eligible to enroll in public schools qualify for scholarships if their family income does not exceed 300 percent of the area median income. The Secretary of State's 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, with full implementation scheduled for 2027.

More than 20 other states have already opted into the Education Freedom Tax Credit. Kentucky is the 29th state to adopt the program and only the second with a Democratic governor.

During the signing, Adams said: "I think this is the most important one I've ever gotten to do." Bill opponents, including the Jefferson County Teachers Association, argued the program primarily benefits private school students already in private schools. The bill takes effect July 1.