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Alabama Education Savings Accounts

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Summary

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The CHOOSE Act, signed into law by Gov. Kay Ivey on March 7, 2024, makes refundable income tax credits called education savings accounts (ESAs), available to support the success of every K-12 student in Alabama.

Table of Contents

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Frequently Asked Question

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What is the funding amounts for academic year 2027-2028

  • The first 500 ESAs awarded for participating students* with special-needs
  • Second priority goes to participating students* previously awarded in the prior academic year
  • Next priority goes to participating students* who are dependents of active-duty service members enrolled in or assigned to a participating school
  • Remaining credit awarded for participating students* regardless of adjusted gross income

    *Priority goes to siblings of participating students.

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Scientific Definition

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The law requires the Alabama Department of Revenue to establish a framework and funding for ESAs, which may be used by eligible families to cover tuition, fees, and other qualified education expenses at approved education service providers (ESPs) in Alabama.

ESAs in the amounts below will be available beginning with the 2025-2026 Academic Year:

  • Up to $7,000 per participating student enrolled in a participating school
  • Up to $2,000 per participating student not enrolled in a participating school (e.g. students that participate in individual or group homeschool programs or co-ops, non-participating schools, or other similar programs); capped at $4,000

Video Explanation

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Academic Year 2025 - 2026

For participating students whose family have an adjusted gross income not exceeding 300 percent of the federal poverty level for the preceding tax year:

  • The first 500 ESAs awarded for participating students* with special-needs
  • Second priority goes to participating students* who are dependents of active-duty service members enrolled in or assigned to a participating school
  • Remaining awarded for participating students* whose family have an adjusted gross income not exceeding 300 percent of the federal poverty level for the preceding tax year

    *Priority goes to siblings of participating students.

Academic Year 2026-2027

For participating students whose family have an adjusted gross income not exceeding 300 percent of the federal poverty level for the preceding tax year:

  • The first 500 ESAs awarded for participating students* with special-needs
  • Second priority goes to participating students* previously awarded in the prior academic year
  • Next priority goes to participating students* who are dependents of active-duty service members enrolled in or assigned to a participating school
  • Remaining awarded for participating students* whose family have an adjusted gross income not exceeding 300 percent of the federal poverty level for the preceding tax year

    *Priority goes to siblings of participating students.

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