What is the Alabama Accountability Act?

The Alabama Accountability Act Scholarship Program, which the Department of Revenue's lists call the Alabama Educational Scholarship Program, awards scholarships through approved scholarship granting organizations. Act 2023-418 caps a scholarship at $10,000 per student per academic year for tuition and mandatory fees. The cumulative tax credits are $40 million a year. If the credits issued exceed 90 percent of that cap in three of four consecutive years, the cap rises by $10 million a year until it reaches $60 million.

How does a family apply for an Alabama scholarship?

The family applies to a scholarship granting organization. Act 2023-418 says the organization, not the school, decides whether the student is eligible. The Department's approved list dated November 15, 2025 has eight organizations, including the Alabama Opportunity Scholarship Fund.

How does a donor claim the Alabama credit?

The donor contributes to an approved scholarship granting organization, then reports that donation in My Alabama Taxes under Manage Tax Incentives, Report a Donation to an SGO. The Department's Section 9 procedure says the organization must verify the donation within 30 days of receiving notice of it. Act 2023-418 sets the credit at 100 percent of the contribution, up to 100 percent of Alabama income-tax liability, and not more than $100,000 for an individual taxpayer or a married couple filing jointly. Unused credit carries forward for up to three taxable years.

Alabama Educational Scholarship Program

Alabama Accountability Act Scholarship Organizations

The Alabama Accountability Act Scholarship Program is defined in Alabama Code §16-6D-4. The Department of Revenue's published lists call it the Alabama Educational Scholarship Program. Scholarship granting organizations award scholarships of up to $10,000 per student per academic year for tuition and mandatory fees at a qualifying school.

An eligible student's family income for the calendar year before the scholarship may not exceed 250 percent of the federal poverty level. A student who has already received a scholarship remains eligible until family income exceeds 350 percent of the federal poverty level. The student must have been eligible to attend a public school in the preceding semester or be starting school in Alabama for the first time, and must live in Alabama while receiving the scholarship. An eligible student with unique needs has a current IEP or Section 504 plan, attended a school in Alabama the preceding year, is not currently enrolled in a public school, and lives in Alabama. The statute says that student may participate regardless of the resident school district's academic performance. It does not state an income percentage for that definition.

The federal scholarship tax credit is up to $1,700 per taxpayer ($1,700 single, $3,400 married filing jointly). The federal credit is reduced by any state tax credit claimed for the same contribution. Alabama's federal scholarship tax credit status on the tracker is Opted In. This page is for information only and is not tax advice.

8 SGOs listed · 1 accepting students · 8 accepting donors

Tax Credit100%

CreditDollar-for-dollar

GradesK-12

Max Scholarship$10,000

Annual Cap$40 million

Income Limit250% FPL (350% after a scholarship)

Frequently asked questions

What is the Alabama Accountability Act?: The Alabama Accountability Act Scholarship Program, which the Department of Revenue's lists call the Alabama Educational Scholarship Program, awards scholarships through approved scholarship granting organizations. Act 2023-418 caps a scholarship at $10,000 per student per academic year for tuition and mandatory fees. The cumulative tax credits are $40 million a year. If the credits issued exceed 90 percent of that cap in three of four consecutive years, the cap rises by $10 million a year until it reaches $60 million.
Which Alabama schools participate?: The Department of Revenue publishes the participating nonpublic schools. The workbook dated August 10, 2026 lists 163 schools. A scholarship granting organization pays a scholarship to a qualifying school, and the Department says to check that list before enrollment or scholarship issuance.
How does a family apply for an Alabama scholarship?: The family applies to a scholarship granting organization. Act 2023-418 says the organization, not the school, decides whether the student is eligible. The Department's approved list dated November 15, 2025 has eight organizations, including the Alabama Opportunity Scholarship Fund.
How does a donor claim the Alabama credit?: The donor contributes to an approved scholarship granting organization, then reports that donation in My Alabama Taxes under Manage Tax Incentives, Report a Donation to an SGO. The Department's Section 9 procedure says the organization must verify the donation within 30 days of receiving notice of it. Act 2023-418 sets the credit at 100 percent of the contribution, up to 100 percent of Alabama income-tax liability, and not more than $100,000 for an individual taxpayer or a married couple filing jointly. Unused credit carries forward for up to three taxable years.
How does the federal scholarship tax credit apply in Alabama?: Alabama has opted in to the federal scholarship tax credit. The federal scholarship tax credit is up to $1,700 per taxpayer ($1,700 single, $3,400 married filing jointly). The federal credit is reduced by any state tax credit claimed for the same contribution.

This page is for information only and is not tax advice.

Am I eligible?

A student may qualify for the Alabama Educational Scholarship Program under the Alabama Accountability Act (Act 2023-418) if all of the following are true:

Family income for the calendar year before the scholarship does not exceed 250% of the federal poverty level. A student who has already received a scholarship remains eligible until family income exceeds 350% of the federal poverty level.
The student was eligible to attend a public school in the preceding semester, or is starting school in Alabama for the first time.
The student lives in Alabama while receiving the scholarship.

An eligible student with unique needs is a separate definition. The student has a current IEP or Section 504 plan, attended a primary or secondary school in Alabama during the preceding school year, is not currently enrolled in a public school, and lives in Alabama. The statute says that student may participate regardless of the resident school district's academic performance. It does not state an income percentage for that definition.

Scholarship granting organizations give priority to eligible students zoned for a priority school: a public K-12 school that received a D or F on the most recent state report card, or a school the State Superintendent designates as a priority school.

At least 75% of first-time scholarship recipients at each organization must not have been continuously enrolled in a private school during the previous academic year.

How much can my child receive?

Up to $10,000 per student per academic year for tuition and mandatory fees at a qualifying school.

For an eligible student with unique needs, Act 2023-418 also lists textbooks required by a qualifying school, a licensed or accredited tutor, curriculum, an approved nonpublic online learning program, educational services from a licensed or accredited provider, and contracted services from a public school district, including individual classes.

How to apply

Choose an approved SGO from the list on this page. The Department of Revenue's list dated November 15, 2025 has eight organizations.
Apply to that SGO. The statute says the SGO, not the school, decides whether the student is eligible.
The scholarship is paid to a qualifying school on the Department's participating-schools list.

Key Dates & Deadlines

SGO deadlines vary. Each organization sets its own application dates.
November 15, 2025: date on the Department's approved SGO list.
August 10, 2026: date on the Department's participating nonpublic schools list.

How the tax credit works

Alabama offers a 100% state income tax credit for a contribution to an approved scholarship granting organization (Act 2023-418).

Individual taxpayer or married couple filing jointly: 100% of the contribution, up to 100% of Alabama income-tax liability, and not more than $100,000
Corporate income-tax taxpayer: 100% of the contribution, up to 100% of tax liability. The act does not set a separate dollar cap for that credit.
Pass-through entities: an Alabama S corporation or Subchapter K entity may claim the credit, and it passes through to an eligible shareholder, partner, or member
Carry forward: unused credit carries forward for up to three taxable years

How to donate

Contribute to an approved scholarship granting organization.
Report the donation in My Alabama Taxes: Manage Tax Incentives, then Report a Donation to an SGO.
The organization verifies the donation within 30 days of receiving notice of it. The Department's Section 9 procedure says the credit is conditional on that verification.
Claim the credit on the Alabama income-tax return for the year of the contribution.

The Department's page still titles this step "Reserving Tax Credits by Indicating Donations." The portal action is "Report a Donation to an SGO," and the Section 9 procedure says the donor enters the donation already made.

Key Dates & Deadlines

$40 million statewide cap for a calendar year. If credits issued exceed 90% of the cap in three of four consecutive years, the cap rises by $10 million a year until it reaches $60 million.
30 days: the scholarship granting organization verifies the reported donation.
Three taxable years: carry forward for unused credit.

Federal Tax Credit Program

Alabama has opted in to the federal scholarship tax credit. The federal scholarship tax credit is up to $1,700 per taxpayer ($1,700 single, $3,400 married filing jointly). The federal credit is reduced by any state tax credit claimed for the same contribution.

Resources for Alabama

For FamiliesFor Donors8 min read

The Federal Tax Credit Scholarship Program: What You Need to Know

A clear explainer on the new federal tax credit for donations to Scholarship Granting Organizations — up to $1,700 per taxpayer ($1,700 single, $3,400 married filing jointly), who qualifies, and what it means starting in 2027.

Oct 22, 2026

For FamiliesFor DonorsFor SGOs3 min read

What Is a Scholarship Granting Organization (SGO)?

A comprehensive guide to SGOs — what they are, how they work, and how they connect donors, families, and K-12 schools through tax-credit scholarship programs.

Feb 27, 2026

Guide last updated October 10, 2026

Federal Tax Credit Scholarship Program

Opted In

Alabama has opted in to the federal scholarship tax credit program created by the One Big Beautiful Bill Act (signed July 4, 2025). A taxpayer can claim a federal tax credit of up to $1,700 per taxpayer ($1,700 single, $3,400 married filing jointly) for a cash gift made on or after January 1, 2027 only if Alabama has filed its election and submitted its SGO list, and only for an SGO on that list.

For 2027, a state must file its election by January 1, 2027 (11:59 p.m.) and submit its SGO list by February 15, 2027. If the state does not submit that list, no SGO in that state qualifies.

The federal credit is reduced by any state tax credit claimed for the same contribution.

Federal Credit

Up to $1,700 per taxpayer ($1,700 single, $3,400 married filing jointly)

Effective Date

January 1, 2027

Income Limit

300% AMI

Learn more about the federal program →See every state's status on the tracker →

Alabama's federal opt-in status

Opted In

Opt-in action (date): January 16, 2026
Official source: State announcement IRS participating-states list
Last verified: October 6, 2026

This page is for information only and is not tax advice.

Advisor guide to the federal credit Compare Alabama with every state on the tracker →

Participating schools

The Alabama Department of Revenue publishes the nonpublic schools participating in the Alabama Educational Scholarship Program. Its workbook dated August 10, 2026 lists 163 schools. A scholarship granting organization pays a scholarship to a qualifying school. The Department says to check this list before enrollment or before a scholarship is issued.

Participating nonpublic schools (PDF) · Excel · Alabama Accountability Act page

Alabama school profiles on SGOlist. A profile says whether its name is on the August 10, 2026 list.

Apply through an SGO

Families apply to a scholarship granting organization. Act 2023-418 says the organization decides whether a student is eligible. The Department's approved list, dated November 15, 2025, has these eight organizations. A.A.A. Scholarship Foundation is not on that list.

Alabama Opportunity Scholarship Fund — Birmingham, AL
Scholarships for Kids, Inc. — Birmingham, AL
Rocket City Scholarship Granting Organization, Inc. — Huntsville, AL
Children's Tuition Fund of Alabama (ACSI) — Colorado Springs, CO
Renaissance Scholarships, Inc. — Birmingham, AL
C2 Opportunity Scholarships LLC — Birmingham, AL
Deontaye V. Caple Scholarship — Phenix City, AL
Arete Scholars Fund, Inc. — Suwanee, GA

Qualified scholarship granting organizations (PDF)

Accountability Act vs. CHOOSE Act

The Alabama Accountability Act Scholarship Program is the scholarship program under the Alabama Accountability Act. Donors contribute to an approved scholarship granting organization, and that organization awards the scholarship. The statute is Act 2023-418.

The CHOOSE Act is a separate program the Department of Revenue runs. It provides refundable income tax credits called education savings accounts. For a student enrolled in a participating school the amount is $7,000. For a student in a home education program the amount is $2,000, capped at $4,000 per family. For the 2026–2027 academic year, the Department awards credits to students whose family adjusted gross income does not exceed 300 percent of the federal poverty level. The application portals for 2026–2027 closed at midnight on March 31, 2026.

CHOOSE Act page · Act 2023-418 (PDF)

A donor who also claims the federal scholarship tax credit uses the federal amount of up to $1,700 per taxpayer ($1,700 single, $3,400 married filing jointly). The federal credit is reduced by any state tax credit claimed for the same contribution.

SGOs in Alabama

Alabama Opportunity Scholarship Fund

Birmingham, AL

This organization is listed by the Alabama Department of Revenue as a qualified Scholarship Granting Organization under the Accountability Act program. Publicly available official roster information confirms it may participate in Alabama's tax-credit scholarship framework for eligible students seeking nonpublic K-12 options.

Accepting donorsAL · State program

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