The Next Chapter of School Choice in Alabama: Understanding the Education Freedom Tax Credit

June 24, 2026

Beginning January 1, 2027, a new federal opportunity will expand educational options for Alabama families while creating new ways for donors to support students and schools across the state.

What It Means for Alabama Donors

For years, Alabama taxpayers have supported educational opportunity through the state's Accountability Act tax credit scholarship program. Now, eligible donors will have an additional way to support students through a federal tax credit.


The EFTC provides:

  • A federal tax credit of up to $1,700 per tax return
  • A dollar-for-dollar reduction in federal tax liability
  • An opportunity to support scholarships for Alabama students
  • A way to keep education dollars benefiting local communities and families


One unique feature of the EFTC program is that donors have the ability to direct their contribution to a specific participating school. For donors who are passionate about supporting a particular school, community, or educational mission, this provides a direct way to invest in the success of that institution while helping families access the educational opportunities that best meet their needs.


Whether supporting a local independent school, faith-based school, or other participating educational institution, donors can play a meaningful role in expanding access for students while strengthening the schools that serve their communities.


What It Means for Alabama Families

One of the most significant aspects of the new federal program is that eligibility is based on Area Median Income (AMI) rather than the criteria used by Alabama's CHOOSE Act or Accountability Act scholarship programs. Families with household incomes up to 300% of Area Median Income may qualify.


For many Alabama families, this means eligibility could extend well into the middle-income range.


Estimated 2025 Income Limits for a Family of Four


Because AMI varies by region, eligibility thresholds are different across the state. This means many families who may not qualify for other scholarship programs could qualify for assistance through the federal Education Freedom Tax Credit program.


In addition to private school tuition, scholarships may be used for a variety of educational expenses, including tutoring, instructional materials, educational therapies and other approved learning costs.


What It Means for Alabama Private Schools

The federal tax credit presents an opportunity to reach more families and strengthen enrollment.


As more scholarship dollars become available, schools may be able to:

  • Expand access for families who previously could not afford tuition
  • Increase enrollment by serving a broader range of students
  • Build more diverse student populations
  • Invest in academic programs, staffing, and student services
  • Meet growing demand for educational options across Alabama


Schools that are already serving scholarship students understand the impact financial assistance can have on a family's ability to choose the learning environment that best fits their child. Additional scholarship funding means more families may have access to those opportunities.


Looking Ahead

EFTC is designed to work alongside existing educational choice programs, not replace them. For Alabama families, that means scholarship funds may be layered with other available resources, including Accountability Act (AAA) scholarships and CHOOSE Act education savings accounts. This ability to "stack" funding can be especially meaningful for families of students with special needs, whose educational expenses often extend beyond tuition to include therapies, specialized instruction, tutoring, assistive technology, and other support services.


By creating another source of scholarship funding, the Education Freedom Tax Credit has the potential to help families bridge affordability gaps and access the educational environment and services their children need to thrive. For many Alabama families, it represents not just another scholarship opportunity, but greater flexibility to build an educational experience tailored to their child's unique needs.


As implementation details continue to emerge, the our team is ready to help donors, families, and schools understand how this new federal opportunity can expand educational access across our state.

August 10, 2026
Earlier this year, our Operations Manager Abbie Schofield shared her “why” for school choice . Now, as a mother navigating a housing market where a home’s school zone can be just as important as its price or location, she has a new perspective to share. Her story is a reminder that school choice isn’t about whether a school is “good” or “bad.” It’s about finding the environment where a particular child can feel safe, supported and capable of learning, and giving parents the freedom to choose it. I grew up in a small city with a fantastic public school system. Every teacher I had was kind, loving, and dedicated. Still, all I wanted to do was leave. In elementary school, I came home crying, begging my parents to send me to a local private school where my church friends went. I was bullied consistently to the point that school felt unbearable. I couldn't understand why I couldn't go—though I do now. It was a sacrifice my family simply couldn't afford. Had our state’s tax-credit scholarship program existed then, we would have qualified. Things eventually improved. I threw myself into academics and extracurriculars, graduating fourth in my class, Senior Class President, and Color Guard Captain. I worked part-time and took on every activity possible because I needed a scholarship to afford college. When an endowed scholarship ultimately made my dream of attending The University of Alabama affordable, it changed my life forever. Today, I manage finances and operations for the very scholarship program that could have changed my childhood. Every time I speak with a parent asking about our scholarships, I hear the same desperation I remember from my own mother—a longing for a happier, safer place for their child to learn. Now, as a mother, I find myself sitting on the other side of that table. My husband and I are currently house hunting to move closer to his job. Right down the road from one house we like sits an adorable home—$100,000 cheaper with significantly more square footage. But because it sits just across a boundary line, zoned for a different school track, I won’t even consider it. I am a parent with resources, a two-income household, and a career dedicated to navigating educational choices in our state. Yet I feel severely trapped by zip codes. I want the best public education for my son, who is in early intervention and will likely need an Individualized Education Program (IEP). Programs like the Alabama Accountability Act allow transfers out of failing school zones. But because the local elementary school isn't labeled "failing"—even if the middle or high school down the line is—transferring isn't an option. And even if neighboring public schools accepted transfers, a child requiring specialized IEP accommodations is rarely prioritized for open-enrollment slots. Meanwhile, stretching our budget to pay private school tuition on top of a mortgage would be a heavy financial burden. My husband and I are proud products of public K-12 schools and public universities. Some of my closest friends are public school teachers. They are deeply dedicated, overworked, and underpaid. They deserve far more support than they receive. But so do our children. Every parent deserves the ability to make educational choices that make their child feel safe, supported, and capable of learning. Sometimes a child needs a different environment not because a school is bad, but because their specific needs—whether ADHD, specialized learning, or safety—require a different fit. And when a school is failing, forcing a child to remain there for the sake of system optics or ADULT politics is indefensible. Our children deserve their best shot at their best possible future. The parents who know and love them best deserve the right to help get them there—regardless of their zip code or income.
Hands working over paperwork and receipts on a wooden table with a calculator and pens
August 3, 2026
Nearly $38 million in tax credits remain. Learn how to support Alabama students by redirecting your state tax dollars through AOSF.
July 27, 2026
School choice in Alabama is expanding, giving families more opportunities to find the educational environment that best meets their child’s needs. But with new programs and updates happening quickly, it can be challenging to understand how each opportunity works and how they fit together. In the latest episode of Bama Knows Education, from Love Your School Alabama , we take a closer look at three key programs shaping the future of education in Alabama: the Alabama Accountability Act (AAA) Scholarship Program, the CHOOSE Act, and the new Federal Education Freedom Tax Credit.
School hallway lined with colorful backpacks and coats against the wall
July 22, 2026
Can Alabama AAA Scholarship donors choose a specific school? Learn how tax credit scholarship contributions work and how your donation supports students statewide.
Student writing at a classroom desk while classmates sit behind them, with colorful posters on the wall.
July 20, 2026
Starting in 2027, Alabama taxpayers can redirect up to $1,700 in federal tax liability to support K-12 scholarships through the Education Freedom Tax Credit.
a
July 14, 2026
Learn how the Alabama AAA Scholarship Program turns tax credits into educational opportunity.
July 1, 2026
For 250 years, freedom has opened doors. See how educational opportunity is helping Alabama families build brighter futures.
June 22, 2026
From student-run restaurants to workforce training, a new Montgomery microschool is redefining education.
June 18, 2026
School choice is about more than accessing existing schools. It's also empowering educators to create new options. Read how Alabama educator Monette Mottenon is helping shape the future of educational opportunity.
June 15, 2026
New federal guidance signals major school choice opportunities ahead for Alabama families.