It's Your Choice

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. 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

November 6, 2024 Update

On Sept. 30, 2024, the Alabama Department of Revenue released a draft version of guidelines for students, parents, and Education Service Providers (ESPs). You can read the full document by clicking here. We strongly encourage all interested parties to carefully read these guidelines.

On November 5th, the Department of Revenue hosted a public hearing on the draft guidelines. Multiple agencies and organizations, including the AISA, provided feedback and comments to inform the Department of Revenue’s considerations prior to the public hearing.

To provide greater clarity on the current status of the process, here’s an outline of key dates and actions:

• Certification Deadline: The Department of Revenue has until November 18th to certify the rule, which would then be published on November 27 in the Administrative Monthly.
• Legislative Council Review: Upon publication, the Legislative Council has until January 11, 2025, to act. If no action is taken, the rule automatically becomes effective.
• Alternative Timeline: If the Department delays certification until December, they would need to complete this step by December 19. The rule would then be published on December 31, with the Legislative Council’s action deadline extended to February 14, 2025.

While we are confident that the Department received substantial feedback, we do not anticipate significant changes to the rules as presented. Once we confirm that the information is stable, we will prepare a simplified informational document to share with our members.

In the meantime, we encourage you to stay informed by attending any of the upcoming webinars hosted by ClassWallet and the Department of Revenue through the official Choose Act website.

Below are some of the key takeaways from the most up-to-date version of the guidelines.

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How to Apply

For the 2025-2026 school year, parents of eligible students can begin applying on Jan. 2, 2025. Applications will close on April 7, 2025. Award notifications will go out to all families beginning on May 1, 2025.

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Requirements for Parents

In order for families to qualify, parents will need to provide documentation that verifies their income, residency, and guardianship. Parents of special needs students or parents who are active-duty service members will also need to provide documentation in order to receive Certain Priority Applicant Status.
There is no reimbursement or refund of any ESA funds directly to a parent of student. Any funds left in the ESA at the end of an academic year will be returned to the CHOOSE Act fund. Leftover funs will not rollover year to year.

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Requirements for Education Service Providers (ESPs)

ESPs must submit all required documentation to the Department of Revenue in order to participate in the program, as listed in the guidelines. These include, but are not limited to, the ESP’s verification of accreditation, maximum number of students who can enroll, tuition and fees, and financial statements that demonstrate the school’s ability to provide for students’ continued education in the event the school suffers a financial failure.

Among other requirements, ESPs must agree to submit annual reports to the department regarding the number of students participating, services provided, and the amount received for all qualifying expenses. ESPs must also agree not to discriminate against participating students in setting tuition or fees.

ESPs must also provide the department with school-level test results for participating students. Participating students must take a standardized assessment at least once annually. Special-needs students for whom standardized testing is not appropriate are exempt from the testing requirement.

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Requirements for Invoicing and Payment Requirements for ESPs

Parents can only direct payments from an ESA account to an ESP through the platform. Payment for services can be made before or after the service has been rendered. However, invoices will be approved only for services provided within an academic year for which a tax credit has been awarded.

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Qualifying Education Expenses

The following expenses are eligible for purchase from an ESP through the use of an ESA:

• Tuition, and the following fees:
• Enrollment and registration fees
• Student fees
• Activity fees
• School fee
• Security fee
• Programming fee
• Administration fee
• Technology fee
• Supply fees
• Textbooks
• Fees for after-school or summer education programs provided by the participating ESP
• Private tutoring, as outlined in the guidelines.
• Curricula or instructional materials, as outlined in the guidelines.
• Computers
• Laptop, desktop or tablet computers that have a cost not exceeding $1,200. Computers can be purchased every two years, as defined in the guidelines.
• >Certain technological aids are limited to $500 per academic year for participating students

The following fees are not eligible:

• Athletic fees
• Missed session/cancellation fees
• Late fees
• Capital or building fees
• Commitment fees
• Transportation fees
• Food
• Field trip fees
• Child-care fees
• Uniforms