Student Funding

Parents of eligible students may receive an annual credit up to $7,000 or the cost of the qualifying education expenses, whichever is less, deposited into an education savings account, when the student attends a participating school. For eligible participating students not enrolled in a participating school, the annual credit amount available to the parent is the lesser of $2,000, or the total cost of qualifying education expenses, with a $4,000 cap per family. At the conclusion of each academic year, unused funds are returned to the CHOOSE Act Fund. An annual appropriation of at least $100 million will fund the education savings accounts, with an additional $1 million appropriation given to the Alabama Department of Revenue in the upcoming fiscal year to fund the program’s administration.

Because the program is funded through an appropriation, participation is limited by availability of funding. The legislature has established a priority for awarding the tax credits. The first 500 tax credits awarded annually are reserved for the parent of an eligible student with special needs. Priority is given to the parent of students participating in the program, siblings of participating students, and next to dependents of active-duty service members participating in the program who are enrolled in or assigned to a priority school as defined by the state, and finally based on the family’s adjusted gross income as a percentage of the federal poverty level. The department is required to award a tax credit to a parent for any other eligible student in a family who is a sibling of a student previously awarded an education savings account.

(Last updated May 10, 2024)

Student Eligibility

Students are eligible to participate in the CHOOSE program if they are residents of the state between the ages of 5 and 19 and have not yet graduated the 12th grade. Children up to the age of 21 years of age who would qualify for services under the Individuals with Disabilities Act (IDEA) or Section 504 of the Rehabilitation Act are also eligible to participate in the program. Students must be lawfully present in the United States. Parents or custodians must also be residents of Alabama and lawfully present in the United States.

Students may not participate in the Alabama CHOOSE program while receiving funds through the Alabama Accountability Act or the Alabama Education Scholarship Program.

For program years beginning January 1, 2025, and January 1, 2026, the credit is available to parents of students whose family has an adjusted gross income not exceeding 300% of the federal poverty level (FPL) for the preceding tax year ($93,600 for a family of four in 2024). Beginning January 1, 2027, and for years to follow, the credit shall be available to the parent of an eligible student, without income limitations.

(Last updated May 10, 2024)

EdChoice Expert Feedback

A program’s universality is measured on three points: Student eligibility, funding amount and source, and use of funds. Eligibility and funding amount and source have been explained above. Here, we explain how funds for this program may be used.

Parents may use funds for eligible students in one or more of the following categories: tuition and fees at a participating schools, textbooks, fees for after-school or summer programs provided by a participating school, private tutoring, curricula, instructional materials, tuition and fees for nonpublic online learning, educational software and applications, fees for standardized and nationally recognized assessments, college admissions test and advanced placement exams and related prep courses, education services and therapies for students with disabilities from a licensed or accredited practitioner or education service provider, contracted services provided by a public school district including specific classroom instruction.

(Last updated May 10, 2024)

Rules and Regulations

• Income Limit: 300% FPL in 2025 and 2026; Beginning in 2027 no income limitations, but priority does take into consideration income as a percentage of FPL
• Prior Year Public School Requirement: None
• Geographic Limit: Statewide
• Enrollment Cap: Funded through an appropriation
• Account Cap: $7,000 for students in participating private schools; $2,000 for other students with a $4,000 cap per family
• Testing Mandates: State or national norm referenced test; students with disabilities are exempt if testing is not appropriate
• Available to all K-12 students by 2027/2028 school year

Parent Requirements

• Parent of an eligible student must:

o Submit any information required by the department, including the name of the student.
o Agree to claim the credit only for qualified expenses to provide an education for an eligible student.
o Agree that, to the best of the parent’s knowledge, no other person is claiming a credit for the eligible student.
o Agree not to claim the credit for a student who enrolls as a full-time student in a public school district unless they are participating provider.
o Agree to assume the full financial responsibility for the education of the student, including any additional costs incurred at an education service provider.
o Agree to comply with rules adopted by the department for the administration of the program.

(Last updated May 10, 2024)

Governing Statutes

https://casetext.com/statute/code-of-alabama/title-16-education

(Last updated May 10, 2024)

Legal History

No legal challenges have been filed against this program.

(Last updated May 23, 2024)