The Alabama Department of Revenue to roll out the The CHOOSE Act.
Published: June 28, 2024
By: Carol Muse Evans
Alabama Governor Kay Ivey signed “The CHOOSE Act” into law earlier this year (House Bill 129), affecting school children and schools in Alabama.
“Today is a historic day as we officially sign our education savings account bill, the CHOOSE Act, into law,” Ivey says. “Our plan will not only work for Alabama families–it will work for the state and will be effective and sustainable for generations to come,” Ivey adds.
According to Ivey, Alabama is only the 14th state in the nation with an “education savings account option.”
According to the Alabama Department of Revenue, The CHOOSE Act makes refundable income tax credits called education savings accounts (ESAs) available to support the causes of every K-12 student in Alabama. 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 service providers (ESPs) in Alabama.
The Alabama Department of Revenue explains how the Act will be implemented, 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
Year 1: Academic Year 2025-2026, the credits will be awarded as follows:
- The first 500 ESAs awarded for participating students* with special needs
- Participating students* who are dependents of active-duty service members enrolled in or assigned to a priority school
- Remaining awarded for participating students* whose families have an adjusted gross income not exceeding 300 percent of the federal poverty level for the preceding tax year
*Priority goes first to participating students and siblings of participating students.
Year 2: Academic Year 2026-2027, the credits will be awarded as follows:
- The first 500 ESAs awarded for participating students* with special needs
- Participating students* previously awarded in the prior academic year
- Participating students* who are dependents of active-duty service members enrolled in or assigned to a priority school
- Remaining awarded for participating students* whose families have an adjusted gross income not exceeding 300 percent of the federal poverty level for the preceding tax year
*Priority goes first to participating students and siblings of participating students.
Year 3: Academic Year 2027-2028 and beyond, the credits will be awarded as follows:
- The first 500 ESAs awarded for participating students* with special needs
- Participating students* previously awarded in the prior academic year
- Participating students* who are dependents of active-duty service members enrolled in or assigned to a priority school
- Remaining credit awarded for participating students* regardless of adjusted gross income
*Priority goes first to participating students and siblings of participating students.
And you can read more at a later date as details are updated at revenue.alabama/gov/tax-policy/the-choose-act.
As might be expected, reactions from many educators, parents and state officials are mixed. At the time of this publication, Birmingham Parent reached out to more than seven educational institutions, but none of them provided a statement.
Elizabeth BeShears, the National Communications Director for the American Federation for Children and part of Moms on a Mission in Alabama, says this bill for “school choice” was expanded for low-income and special needs kids and compares what she hopes will be the same success as programs in Florida, Arizona, Texas and other states.
BeShears says she believes that public school quality goes up with competitive effect and student outcomes go up, and parenting satisfaction goes up, parental satisfaction goes up,” she says.
“The competitive effect makes education more competitive, and therefore, better,” BeShears points out.
Look for more information about the CHOOSE Act in future issues of Birmingham Parent as more details become available to educational organizations and parents.