What is the Alabama CHOOSE Act Program?

It’s not easy feeling like your child’s education is out of your hands. When school options feel limited or one-size-fits-all, it can be tough to give your learner the kind of support they truly need. Alabama’s new CHOOSE Act program offers a way to take some of that control back.

This new program puts part of the state’s education funding directly in your hands, so you can choose the learning tools, settings, and support services that match your child’s unique learning goals.

What is an Education Savings Account (ESA)?

An Education Savings Account (ESA) is a state program that gives you more say in how your child’s education funds are used. Instead of assigning state education dollars to a specific public school, an ESA allows eligible families to use those funds for approved educational expenses, like private school tuition, homeschool supplies, tutoring, or special education services. It's a way to make public funding work for a broader range of learning environments.

ESA programs are growing across the country. As of 2025, families in 18 states can apply for some version of an ESA. The eligibility rules, funding amounts, and expense lists can look very different from one state to the next. If you’re in Alabama, learning the details of the CHOOSE Act is the first step to making sure this program can work for your family.

What scholarship options are available in Alabama?

Alabama families currently have access to three main programs that support school choice and flexible education funding. Each one offers a different way to help cover tuition, curriculum, and other approved learning expenses.

Here are the key scholarship programs available:

• CHOOSE Act ESA Program: The state’s official ESA program gives families direct access to public funds for private school tuition, homeschool support, tutoring, and more.
• Parent-Taxpayer Refundable Tax Credit: A tax credit program for eligible families transferring out of “failing” public schools to approved private schools.
• Alabama Education Scholarship Program: A donor-supported scholarship that provides private school tuition assistance through registered Scholarship Granting Organizations.

Each program comes with its own eligibility requirements and funding process. In the following sections, we’ll break down how each one works so you can decide which fits your learner best.

Creating Hope and Opportunity for Our Students’ Education (CHOOSE) Act Program

The CHOOSE Act ESA Program, short for Creating Hope and Opportunity for Our Students' Education, was signed into law in 2024 as Alabama’s official Education Savings Account initiative. It allows eligible families to access public funds through a secure digital wallet to pay for a wide range of approved education expenses. These include tuition and fees at participating schools, homeschool curriculum, tutoring, therapies, and more.

The program is administered by the Alabama Department of Revenue (ALDOR) and managed through the ClassWallet platform. Once approved, families receive funds directly in their ClassWallet account and can use them with approved Education Service Providers. The program began phasing in during 2025 and will expand in future years, with income limits in place during early rollout.

Eligibility

• Residency: Student must be a legal resident of Alabama.
• Grade Level: Open to students in grades K-12. Kindergarteners must turn 5 by September 1, 2025.
• Income: For school years beginning January 1, 2025, and January 1, 2026, families must earn no more than 300% of the federal poverty level (e.g., $93,600 for a family of four in 2024–2025). Beginning January 1, 2027, income limits will no longer apply.
• Priority Groups:
  • Students with special needs (first 500 accounts)
  • Siblings of existing participants
  • Students zoned for D- or F-rated public schools
  • Dependents of active-duty service members

Rules & regulations

• Application Process: Families apply online between January and April. They must confirm the student’s intended school (or indicate homeschool) and provide:
  • Student’s birth certificate or proof of guardianship
  • Proof of income (tax return, W2, 1099, or Social Security statement)
  • Proof of Alabama residency (driver’s license, utility bill, etc.)
  • For priority applicants:
    • Special needs documentation (IEP, ISP, or 504 Plan)
    • Military ID or orders (for military dependents)
• Award Amount:
  • $7,000 per student attending a participating private school
  • $2,000 per student in a home education program (capped at $4,000 per family)
• Use of Funds: Funds must be spent on approved items such as:
  • Tuition and fees at approved private schools
  • Homeschool materials, curriculum, and instructional supplies
  • Tutoring services from qualified providers
  • Educational software, apps, and online programs
  • After-school or summer learning programs
  • Standardized test fees and college entrance exam prep
  • Therapy or support services for students with disabilities
  • Contracted services through public school districts
• Testing Requirements: Students must take standardized norm-referenced tests annually, unless they have special needs that exempt them from doing so.
• Continuation: Families must renew participation annually. Unused funds at year’s end or upon withdrawal will return to the state.
• Restrictions:
  • All purchases must be made through the ClassWallet platform, reimbursements are not allowed.
  • Students cannot receive both a CHOOSE Act ESA and an Alabama Accountability Act (AAA) scholarship in the same year (though siblings may be funded under different programs).

Parent-Taxpayer Refundable Tax Credits

If your child is zoned for a public school classified as “failing” and you’re considering moving them to a private school, Alabama offers a refundable tax credit that can help. The Parent-Taxpayer Refundable Tax Credit, part of the original Alabama Accountability Act of 2013, allows you to claim a credit on your state income taxes to help offset the cost of tuition and fees at an approved nonpublic school.  The credit may also be claimed for mandatory fees if a student transfers to a non-failing public school.

Unlike an ESA or scholarship, this program doesn’t provide upfront funding. You’ll pay tuition out of pocket first, then claim the credit when you file your Alabama tax return. The amount you receive back is limited to either the actual cost you paid or the annual cap set by the state, whichever is lower. If you're planning ahead for tuition payments, this credit can make a big difference at tax time.

Eligibility

• Residency: Student must be an Alabama resident.
• Grade Level: Open to students in K-12.
• School Assignment: The student must be assigned to a public school classified as “failing” by the Alabama Department of Education.
• Transfer Requirement: Families must transfer the student from the assigned failing public school to an approved nonpublic school or non-failing public school.
• Enrollment Timing: The student must be enrolled in the new school during the academic year for which the credit is claimed.

Rules & regulations

• Application Process: No formal application is required through a state portal. Parents claim the credit when filing their Alabama income taxes. Documentation may be required to prove school transfer and payment of tuition and fees.
• Students must be assigned to or currently attending a failing public school.
• Tax Filing Requirements: Families must retain documentation showing:
• The public school to which the student was zoned
• The name and tuition payment details for the nonpublic school
• Proof of enrollment and attendance
• Award Amount: The credit amount is capped annually and cannot exceed the actual tuition and fees paid. The maximum allowable credit is determined by statute and may vary year to year.  The credit equals the lesser of:
• 80% of the state’s average per-pupil spending; or
• The actual tuition and mandatory fees paid by the parents.
• Restrictions:
  • Only families of students assigned to a designated failing public school may qualify.
  • Funds cannot be combined with an ESA from the CHOOSE Act or an AAA scholarship for the same student.

Alabama’s Education Scholarship Program

The Alabama Education Scholarship Program is another school choice option created under the Alabama Accountability Act (AAA) of 2013. This program is supported by private donations from individuals and businesses, which are funneled through Scholarship Granting Organizations (SGOs). These SGOs use the donated funds to award private school scholarships to eligible K-12 students across the state. 

Unlike the Parent-Taxpayer Refundable Tax Credit, this program doesn’t require you to pay for your child’s tuition upfront, the scholarship is awarded directly to the school on the student’s behalf. Families do not claim a tax credit themselves under this program. Instead, the tax credit goes to the donors who contribute to the SGO.

Eligibility

• Residency: Student must be a resident of Alabama.
• Grade Level: Open to students in grades K-12 who are under age 19.
• Income Requirement:
  • Initial eligibility requires household income at or below 250% of the federal poverty level (e.g., $78,000 for a family of four in 2024–25).
  • Once awarded, families may remain eligible if income stays below 350% of the poverty level (e.g., $109,200 for a family of four).
• Enrollment History:
  • Kindergartners and first graders are automatically eligible.
  • Students in grades 2–12 must have attended a public school in Alabama the prior year unless they meet an exception.
  • No more than 25% of first-time scholarship recipients may have attended private school the previous year.
• Priority Groups:
  • Students zoned to D- or F-rated public schools
  • Students switching from “priority” public schools
  • Students with special needs (with IEP or 504 Plan)
  • Students previously awarded an SGO scholarship

Rules & regulations

• Application Process: Families apply directly through an approved SGO.  Each SGO has its own timeline and required documentation, which may include proof of income, student age or grade, and school assignment.
• Award Amount: Scholarship amounts vary depending on the SGO’s available funds and student need. Some SGOs offer partial scholarships, while others cover full tuition.
• Use of Funds:
• Private school tuition and required fees
• Textbooks, online programs, tutoring, instructional materials, and educational therapies for students with special needs
• Testing Requirements: Students must take a nationally norm-referenced or state assessment unless exempt under unique-needs criteria.
• Restrictions:
  • Families may not receive a CHOOSE Act ESA and an SGO scholarship for the same student at the same time.
  • SGOs must ensure that at least 75% of first-time recipients were previously enrolled in public school.
  • Scholarships must be used at accredited and qualifying schools that comply with program standards.

How to use your Alabama ESA funds on Outschool

Outschool is preparing to launch for Alabama families using the CHOOSE Act ESA. While we’re not yet an approved vendor for the state, we’re actively working to meet Alabama’s program requirements so families can use ESA funds on eligible learning experiences through Outschool.

Once approved, families may be able to use ESA funds on:

• Live, small-group classes led by qualified educators
• Self-paced courses designed to suit different learning styles
• Instruction in core subjects and academic enrichment
• Supplemental learning for homeschool, private school, or hybrid models

Want to stay in the loop? Check back here for updates and be the first to know when Outschool becomes available in Alabama.

Frequently asked questions (FAQs)

Still deciding if the CHOOSE Act or another Alabama program fits your family’s needs? Here are answers to common questions about eligibility, funding, and how to navigate the process with confidence.

What’s the difference between the CHOOSE Act ESA and the AAA scholarship programs?

The CHOOSE Act ESA provides public education funds in a digital wallet to use during the school year. AAA programs offer either a refundable tax credit for parents or private school scholarships funded by donor tax credits. Students can only participate in one program at a time.

Can homeschoolers receive CHOOSE Act ESA funds?

Yes. Homeschooling families can receive up to $2,000 per child (with a cap of $4,000 per family) if approved. Funds can be used for eligible curriculum, learning tools, and educational services.

When are Alabama ESA funds distributed, and how do I access them?

Funds are deposited into your student’s ClassWallet account beginning July 1 of the school year. To access the money, families must first accept the affidavit through the ClassWallet platform.

Can I use ESA funds for online classes or tutoring services?

Only if the provider is approved by the Alabama Department of Revenue. As of now, Outschool is not yet approved, but we’re launching in Alabama soon!

What if I miss the application deadline for the CHOOSE Act ESA?

If you miss the January–April window, you’ll need to wait until the next application cycle. Once the window closes, late applications are not accepted.

Can I keep leftover ESA funds for next school year?

No. Any unused funds at the end of the academic year are returned to the state and do not roll over.

Build an education plan that fits your family

No two families have the same approach to learning, and now, Alabama’s school choice programs make it easier to reflect that in your child’s day-to-day experience. From ESA funds you manage directly to scholarships handled by SGOs, there’s more room than ever to shape an education that feels right.

If you’re weighing your options, use this guide as a starting point. The programs are different, but they all aim to give families like yours better access to learning that supports your child’s growth. At Outschool, we understand how important it is to have choices that align with your values, goals, and learning style, and we’re excited to support Alabama families as these opportunities expand.

More resources for Alabama homeschoolers

Need more information? Our guide to homeschooling in Alabama provides helpful insights and resources to support families on their homeschool journey.