MONTGOMERY — Open enrollment for Alabama's new school choice educational savings account (ESA) program will begin in January.
Families may begin applying for the 2025-2026 school year, which will open on January 2, 2025, and close on April 7, 2025, with award notifications scheduled to be sent out on May 1, 2025.
"We'll get it started and see what the uptake is. That's a big component with the financial cap on there for 300% poverty for starters but eventually that will come off. It's going to be interesting to see: what is the first year participation rate for this program? What's the demand? Because that will affect ultimately the budgets and the cost," State Sen. Arthur Orr (R-Decatur) told 1819 News on Monday.
For the 2025-2026 school year, the program is open to families with an adjusted gross income (AGI) not exceeding 300 percent of the federal poverty level for the preceding tax year. The program will prioritize students with special needs, with a secondary focus on students who are dependents of active-duty service members enrolled in or assigned to a priority school. Remaining ESAs will be available to students based on the family's AGI as a percentage of the federal poverty level.
"I'm hearing anecdotally questions from constituents and others. The Department of Revenue has issued those rules. I'm eager to see what the take-up rate (and) the interest will be," State Rep. Danny Garrett (R-Trussville) told 1819 News on Monday.
According to the Alabama Department of Revenue, the CHOOSE Act, signed into law by Gov. Kay Ivey on March 7, 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.
With the CHOOSE Act being signed into law in March, Alabama became the 14th state in the nation to provide families with an education savings account option.
The refundable income tax credit would be $7,000 for students in participating schools, while non-participating school students — such as homeschooled students — are $2,000 per student and $4,000 per family.
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