Governor Kay Ivey on Friday signed Executive Order No. 742, expanding school choice in the state of Alabama even further by participating in the newly-created Federal Education Freedom Tax Credit program, also known as the Federal Scholarship Tax Credit.
Last week, during her state of the state address, Ivey restated her commitment to making Alabama “the most school choice friendly state in the nation.” The governor’s action also comes ahead of National School Choice Week, which begins January 25.
“For over a decade, Alabama has been a trailblazer in offering parents and students options to access and afford the best quality education, and soon our families will have even more resources,” Ivey said. “Beginning with the Alabama Accountability Act passed in 2013, many qualifying students have benefitted from scholarships allowing them to move to a better performing school. Two years ago, I championed and signed Alabama’s universal school choice law, the CHOOSE Act, which provides families with refundable income tax credits for qualifying educational expenses, including tuition, textbooks and after-school programs. And, today, I proudly signed an executive order to further expand Alabama school choice funding options by allowing qualified Alabama families to participate in the Federal Education Freedom Tax Credit program.”
The One Big Beautiful Bill Act signed by President Trump last July created the Federal Education Freedom Tax Credit. “The federal scholarship program is similar to the Alabama Accountability Act and offers federal tax credits for contributions to approved scholarship granting organizations. Those contributions will then be used to provide scholarships to eligible elementary and secondary education students. Scholarship funds can be used for tuition, books, fees, supplies, tutoring and special needs at both public, private, and religious schools. CHOOSE Act participants and Alabama Accountability Act recipients may be eligible to participate in the federal scholarship program,” Ivey’s press release stated.
By building on Alabama’s existing scholarship infrastructure and accountability systems supported by the Alabama Accountability Act, the federal scholarship program will further expand educational opportunities for students and families while also providing taxpayers an additional way to support students across the state, according to Ivey’s office.
By signing Executive Order No. 742, Governor Ivey confirmed Alabama’s participation in the Federal Education Tax Credit program and authorized the Alabama Department of Revenue to administer the program, including certification of eligible participating scholarship programs within the state.
The Federal Education Freedom Tax Credit program will take effect in January 2027.
