Revenue staff brief board on Choose Act education savings-account tax-credit program

A Department of Revenue representative briefed the State Board of Education on Choose Act Alabama, the Creating Hope and Opportunity for Our Students Education Act of 2024, describing eligibility, application timing, digital-wallet mechanics and approved expenses for families who receive the refundable income-tax credit.

The presenter (identified in the transcript as Cameron) said the program creates a refundable income-tax credit delivered as an education savings account (a digital wallet) administered through a third-party vendor, Class Wallet. For the 2025–26 academic year, the presenter said the program’s total appropriation is $100 million and that funds will be distributed to families beginning in July. Cameron said families with a child enrolled in a participating private school may be eligible for a $7,000 credit per student; families that place a child in a home-education program, co-op or micro-school may be eligible for a $2,000 credit per student; credits are awarded per student and are capped at $4,000 per family in some cases described by the presenter.

Eligibility for the first two years is income-limited: applicants must be Alabama residents whose household adjusted gross income does not exceed 300% of the federal poverty level (the presenter gave an example: a household of four with AGI up to approximately $93,600 would fall under the 300% threshold). Cameron said revenue’s analysis indicates roughly 75% of Alabama families would otherwise meet the 300% threshold.

Cameron described an application window that opened January 2 and runs through April 7; award notifications will be sent beginning May 1. The presenter emphasized that awards are not first-come, first-served; revenue will sort applications by AGI percentage so that lower-AGI applicants are prioritized. The first 500 digital savings accounts will be held for students with special needs (students with an individualized education program or a Section 504 plan), the presenter said, and a separate priority is available for dependents of active-duty military assigned to priority schools.

On wallet mechanics and allowable expenses, Cameron said the wallet is a closed, state-managed platform. Payments can be made by direct pay to participating education service providers (ESPs) or via an e-marketplace of approved curriculum and educational materials. Approved uses include tuition and fees at participating schools, textbooks and curriculum, private tutoring (with vendor qualification requirements), educational therapies (for example, occupational therapy, dyslexia services) and certain technology items with restrictions. Cameron added that unused funds do not roll over to the following year; they revert to the program fund.

Cameron described the ESP application process (open year-round) and a current count of participating providers: more than 200 participating schools, 47 e-marketplace vendors, 40 private-tutor providers and nine providers offering educational therapies, among categories described. He said the department contracted with Class Wallet for program coordination and that Class Wallet will provide customer support hours to parents and families.

Cameron said families must upload proof of Alabama residency and proof of income (tax returns or alternate documentation such as SNAP/TANF benefit documents) to complete the application; parents of special-needs students must provide IEP or 504 documentation to show eligibility for the special-needs priority.

Board members asked about consumer protections and what happens if a family is dissatisfied with a vendor. Cameron said participating schools must notify the program within 10 days if a child unenrolls; the department will freeze funds after unenrollment and reverify before reopening. For tutors and therapists, Cameron said enrollment and background-check requirements are screened at onboarding and parents may switch providers if a service is not meeting their child’s needs.

Board action: this was an informational briefing; no board vote was recorded.

Ending — Next steps: revenue staff will continue outreach and webinars; the presenter provided contact information for follow-up and said the department will monitor enrollment and ESP onboarding during the application window.