Creating Hope and Opportunity for Our Students’ Education Act of 2024 The CHOOSE Act

chooseact.alabama.gov

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:

• $7,000 per participating student who is enrolled in a participating school
• $2,000 per participating student who is participating in a home education program (this includes an individual or group program, homeschool, co-op, etc.) and is capped at $4,000 per family

Year 1: Academic Year 2025-2026, the credits will be awarded as follows:

For participating students whose family have an adjusted gross income (AGI) 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 priority school as defined in Section 16-6D-4
• Remaining awarded for participating students* based on the family’s AGI as a percentage of the federal poverty level for the preceding tax year
  
  *Priority goes to siblings of participating students.

Year 2: Academic Year 2026-2027, the credits will be awarded as follows:

For participating students whose family have an AGI 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 priority school as defined in Section 16-6D-4
• Remaining awarded for participating students* based on the family’s AGI as a percentage of the federal poverty level for the preceding tax year
  
  *Priority goes to 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
• 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 priority school as defined in Section 16-6D-4
• Remaining awarded for participating students* based on the family’s AGI as a percentage of the federal poverty level for the preceding tax year
  
  *Priority goes to siblings of participating students.