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Board members seek clarity on Choose Act tax‑credit program, department refers questions to Revenue
Summary
Board members pressed the department for details about the Choose Act education tax‑credit program; officials said revenue collection and rulemaking are handled by the Alabama Department of Revenue and referred parents and superintendents to Revenue’s website, while summarizing application priorities for 2025–26.
Board members raised numerous questions about the Choose Act education tax‑credit program and asked how the department is involved in implementation.
Department officials told the board that the Choose Act was designed as a tax‑credit law and that oversight, rulemaking and application administration were assigned to the Alabama Department of Revenue. “In the eyes of the legislature, this is not an education act. It is a tax bill,” a department official said, and the department said it had not been consulted on rule development.
Officials summarized the program’s first‑year priorities as described in the statute and current Revenue guidance: for 2025–26 applications, participating students whose families have an adjusted gross income up to 300 percent of the federal poverty level will be eligible; the first 500 Education Savings Accounts (ESAs) will be reserved for participating students with special needs; the second priority is dependents of active‑duty service members assigned to priority schools; remaining awards will be distributed by family AGI percentage, with sibling priority noted.
Department staff emphasized that application does not guarantee an award because prioritization and funding limits apply. They also said Revenue has set up a public website and a contact point for questions; board members were advised to refer parents and superintendents to Revenue for procedural and eligibility clarifications.
Board members asked how the tax credit works for families who pay little or no state income tax. Department staff explained the distinction between a tax rebate and a tax credit and said a credit can produce a benefit even if a taxpayer’s tax liability is low; they added that award payments go directly to the provider and do not pass through parents’ hands.
Officials said the legislature included $50 million in the current supplemental budget to support the program’s initial year, and they expect additional appropriations in subsequent fiscal years. The department offered to invite representatives from the Department of Revenue to a work session so board members can get rule and implementation details directly from Revenue staff.
