Alabama: The Creating Hope and Opportunity for Our Students’ Education (CHOOSE) Act of 2024

Parents receive a tax credit worth either the lesser of

1. 80% of the average annual state cost of attendance for a K-12 public school student during the applicable tax year
2. Their student’s actual cost of attending school

• Income Limit: 300% x Poverty in 2025 and 2026. Beginning in 2027, no income limitations; priority by income
• Prior Year Public School Requirement: None
• Testing Mandates: State or nationally norm-referenced test; students with disabilities are exempt if testing is not appropriate
• Special Needs Pathway: Priority
• Homeschool Compatible: Yes

Students are eligible to participate in the CHOOSE program if they are residents of Alabama between the ages of 5 and 19 and who have not yet graduated the 12th grade. Children up to the age of 21 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.

For program years beginning in January 1, 2026, the credit available to parents of students whose family has an adjusted gross income not exceeding 300% of the Federal Poverty Level for the preceding tax year.

For program years beginning January 1, 2027, and for years following, the credit shall be available to the parent of an eligible student, without income limitations

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 student 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 of Revenue is required to give a tax credit to the parent of any other eligible students in a family who is a sibling of a student previously awarded an education savings account.

The CHOOSE Act Alabama Family Application can be viewed here. The timeline can be seen as followed:

1. January 2 - April 7: Family Application Opens

1. CHOOSE Act Alabama must be submitted by April 7. Ensure that all documents required are uploaded correctly prior to the award eligibility notification of May 1. The required documents are:

1. Proof of guardianship
2. Proof of residency
3. Proof of income

2. Additional documents that may be required by April 7: Special needs documentation for those requesting priority award; Public school tuition verification required for those enrolled in a public school for the upcoming school year.

2. Starting May 1: Notification of Award Eligibility

1. Families whose students are eligible for education savings accounts (ESAs) will be notified of their potential award.

3. Before June 30: Proof of Enrollment

1. $7,000 awards are contingent on proof of enrollment at a participating school. Parents must submit proof of enrollment no later than June 30. $2,000 awards for home education programs - no action is needed.

4. Beginning July 1: ESA Distribution

1. Beginning July 1, ESA funds, through a digital wallet, are deposited into participating students’ accounts.

5. July 1 - June 30:

1. Parents must use ESA funds during the academic year (July 1 - July 30 of the following year). Unused funds will be returned to the CHOOSE Act Fund.

Parents may use funds for eligible students in one or more of the following categories

• Tuition and fees at 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 norm-referenced testing
• College admissions tests
• 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.

Parents must use ESA funds during the academic year. Unused funds will be returned to the CHOOSE Act.

Additional Program Guidelines

• 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
• Budget Cap: None

Participant and Family Guidelines

• Education Requirements: N/A
• Parent Supplemented Funds/Scholarships: Allowed
• Disbursement Payment/Frequency: Annual
• Reimbursement Allowed: No
• Miscellaneous: Parent of an eligible student must:

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

• Agree to comply with rules adopted by the Department of Revenue for the administration of the program.

Education Provider Guidelines

• Accreditation/Approval:

• Be accredited, or in the process of obtaining accreditation as determined by the Department of Revenue, by one of the six regional accrediting agencies and/or the National Council for Private School Accreditation, Cognia, the American Association of Christian Schools, the Alabama Christian Education Associations, the Alabama Independent School Association, or one of their partner accrediting agencies. Comply with all applicable health and safety laws or codes
• Be an Alabama education service provider

• Employment Standards: Background checks and bachelor’s degrees for tutors
• Nondiscrimination:

• Agree not to discriminate based on the grounds of race, color or national services in the provision of its services
• Agree not to discriminate against participating students in setting tuition or fees

• Calendar/Curriculum/Attendance: Submit calendar to state
• Financial:

• Provide financial statements that demonstrate to the satisfaction of the Department of Revenue, the school’s ability to adequately provide for the participating students’ continued receipt of educational services in the event the school suffers a financial failure or file a surety bond in an amount determined by the Department to be equal to the aggregate amount of the program funds expected to be paid during the academic year from participating students.
• Agree to document amounts received for all qualifying expenses in a manner prescribed by the Department of Revenue.
• Require all participating students to make payments of tuition and fees periodically on a schedule

• Miscellaneous:

• Submit any information required by the Department of Revenue for implementation, including its address, contact information, and a summary of each program or service it proposes to provide to participating students.
• Agree not to refund, rebate, or share any portion of program funds with a parent or student in any manner, and only use program funds for qualifying expenses.
• Agree to submit annual reports to the Department of Revenue concerning implementation of the program, including the number of students participating, services provided, and other similar information.
• Agree to comply with the Family Educational Rights and Privacy Act, 20 U.S.C. Section 1232g.
• Hold a valid occupancy permit if required by the municipality where the school is located
• Comply with the Alabama Child Protection Act of 1999, Chapter 22A of Title 16, Code of Alabama 1975
• Require all participating students taking program funds to take a standardized assessment aligned to the curricula of the school, a nationally norm-referenced assessment or a nationally recognized aptitude assessment of the school’s choice, providing parents with individual results and the state with school-level test results
• Inform the state of any events affecting a participating student’s eligibility

Alabama Department of Revenue Administrative Code Chapter 810-28-1

(Last updated January 3, 2025)