Alabama Expands School Choice, Opens Federal Tax Credits to Families

Alabama's school choice landscape expanded significantly when Governor Ivey signed the CHOOSE Act into law on March 7, 2024, establishing refundable income tax credits called education savings accounts (ESAs). Beginning with the 2025-2026 academic year, eligible families can claim $7,000 per student enrolled in participating private schools, or $2,000 for homeschooled students—capped at $4,000 per family. The program prioritizes special-needs students, children of active-duty military members, and families below 300 percent of the federal poverty level. In January 2026, Governor Ivey accelerated Alabama's school choice expansion by signing Executive Order No. 742, confirming the state's participation in the Federal Education Freedom Tax Credit program created by President Donald Trump's One Big Beautiful Bill Act. This federal program mirrors the state's existing Alabama Accountability Act, offering tax credits for contributions to approved scholarship-granting organizations that provide educational funding to eligible K-12 students. Scholarship funds can cover tuition, books, fees, supplies, tutoring, and special-needs services at public, private, and religious schools. The executive order authorizes the Alabama Department of Revenue to administer the federal scholarship program and certify eligible participating scholarship organizations. CHOOSE Act participants and Alabama Accountability Act recipients may now qualify for both state and federal programs, creating a layered system of educational funding options. Beginning with the 2027-2028 academic year, the state will eliminate income requirements for ESA eligibility, opening the program to any Alabama resident with eligible K-12 students. The expansion represents a significant shift in Alabama education policy, offering families alternatives to traditional public schools while maintaining legislative funding through the state budget. The CHOOSE Act Fund requires the legislature to appropriate at least $100 million annually, with no cap preventing additional appropriations. Critics argue the program diverts public funds from traditional schools, while supporters contend it empowers families to choose educational paths suited to individual student needs.