Alabama CHOOSE Act: the 2026-27 guide for families

Alabama families approved for the CHOOSE Act: your funds are available as of July 1, 2026. If your child was awarded an Education Savings Account, your ClassWallet account is now funded. This guide covers how the program works, who qualifies, how to apply for the next cycle, and how to start spending your funds, including at Outschool, a confirmed approved Education Service Provider. [1]

Alabama CHOOSE Act at a glance (2026-27)

• What it is: Alabama's Education Savings Account (ESA) program, funded by a refundable state income tax credit and delivered through a ClassWallet digital wallet.
• Award amount: $7,000 per private school student; $2,000 per home education student, capped at $4,000 per family.
• Income limit (2026-27): Adjusted gross income at or below 300% of the federal poverty level. This requirement is eliminated starting 2027-28.
• How funds are spent: Through ClassWallet, paid directly to approved Education Service Providers. No out-of-pocket cost, no reimbursement filing.
• When funds arrive: Deposited July 1 for approved families.
• Application window: January to April each year. The 2026-27 window closed March 31, 2026; the 2027-28 cycle opens in early 2027.
• Rollover: Unused funds return to the state at year-end and do not carry over.

What is an Education Savings Account (ESA)?

An Education Savings Account puts a portion of public education dollars directly in a family's hands. Instead of routing state funding to a specific public school, an ESA lets eligible families spend those funds on approved educational expenses: private school tuition, homeschool curriculum, tutoring, online classes, and more.

ESA programs are growing fast. As of 2026, families in more than 20 states can access some form of ESA. The rules, funding amounts, and approved expense lists vary by state. For Alabama, the CHOOSE Act is the program to know. If you're new to the concept, our guide to Education Savings Accounts breaks down the basics.

How does the Alabama CHOOSE Act work?

The CHOOSE Act (Creating Hope and Opportunity for Our Students' Education) was signed into law in 2024 as Alabama's official ESA. It's funded through a refundable state income tax credit, but families don't file anything at tax time. Once you're approved, funds land in a secure ClassWallet digital wallet, and you pay approved Education Service Providers directly from it. [1]

Families apply between January and April each year. If approved, funds are deposited into ClassWallet on July 1. All purchases go through the platform, and direct reimbursements are not accepted. [1]

Funding amounts

• Private school students: up to $7,000 per student
• Home education students: up to $2,000 per student, with a family cap of $4,000

Eligibility and priority groups

For 2026-27, families must have an adjusted gross income at or below 300% of the federal poverty level, which covers roughly 75% of Alabama families. Beginning in 2027-28, the income requirement goes away and the program opens to all Alabama K-12 students. [1]

The CHOOSE Act awards accounts using a priority system:

• Students with special needs (first 500 accounts)
• Siblings of current participants
• Students assigned to D- or F-rated public schools
• Dependents of active-duty service members

What can CHOOSE Act funds pay for?

Approved uses through ClassWallet include private school tuition and fees, homeschool curriculum and materials, tutoring, online learning programs, after-school and summer programs, test fees and exam prep, and therapy services for students with disabilities. For the full category-by-category breakdown, see our guide to Alabama CHOOSE Act approved expenses. [1]

How to apply for the CHOOSE Act

Applications open each January through the Alabama Department of Revenue. Here's the path for the 2027-28 cycle:

1. Confirm eligibility. For 2027-28, the income limit is eliminated, so all Alabama K-12 families can apply. Gather residency and student information before the window opens.
2. Apply in the January to April window at the official CHOOSE Act portal, revenue.alabama.gov/tax-policy/the-choose-act/. [1]
3. Watch for your award notification by email in the spring. Awards follow the priority order above if applications exceed available accounts.
4. Accept the program affidavit in ClassWallet once approved. You have to accept it before funds unlock.
5. Spend starting July 1 by searching approved providers in ClassWallet and paying them directly from your wallet.

Using your CHOOSE Act funds at Outschool

Outschool is a confirmed approved Education Service Provider under the CHOOSE Act. Alabama families with a funded ClassWallet account can spend their ESA dollars on Outschool's live classes, 1:1 tutoring, and self-paced courses, booked directly through ClassWallet. [1]

ESA funds can be applied toward:

• Live, small-group classes led by vetted teachers in any academic subject
• 1:1 tutoring for reading, math, writing, science, and more
• Self-paced enrichment classes for kids who need flexibility
• Core academic support for homeschooling families

Log into ClassWallet and search for Outschool to get started, or browse CHOOSE Act-eligible classes on Outschool first to plan your year. You can also visit our Alabama ESA hub for class categories and funding updates. Funds are available beginning July 1, 2026.

Other Alabama school choice programs

The CHOOSE Act isn't the only option. Two donor- and tax-credit-based programs run alongside it, and a child can only participate in one at a time.

Parent-Taxpayer Refundable Tax Credit

If your child is zoned for a public school classified as "failing" and you're considering a private school transfer, this credit (created under the Alabama Accountability Act of 2013) can offset tuition. Unlike an ESA, it doesn't provide upfront funding: you pay tuition first, then claim a refundable credit on your state income tax return, limited to the lower of your actual costs or the state's annual cap.

To qualify, the student must be an Alabama K-12 resident assigned to a "failing" public school and transferring to an approved nonpublic or non-failing public school. Students cannot receive both this credit and a CHOOSE Act ESA in the same year.

Alabama Education Scholarship Program

Established under the Alabama Accountability Act, this program is funded by private donors who contribute to registered Scholarship Granting Organizations (SGOs). Those SGOs award private school tuition scholarships directly to eligible K-12 students, so families don't pay upfront.

• Initial eligibility: household income at or below 250% of the federal poverty level (about $78,000 for a family of four)
• Renewal eligibility: income may rise to 350% of poverty level (about $109,200 for a family of four)
• Students in grades 2 through 12 must have attended an Alabama public school the prior year, with limited exceptions
• Priority: students at D/F-rated schools, students with IEPs or 504 plans, and previous recipients

Frequently asked questions

What's the difference between the CHOOSE Act and the AAA scholarship programs?

The CHOOSE Act ESA deposits public education funds into your ClassWallet account to spend during the school year. AAA programs offer either a refundable tax credit for parents or a private school scholarship funded by donor tax credits through an SGO. Each student can participate in only one program at a time.

Can homeschoolers receive CHOOSE Act funds?

Yes. Home education families can receive up to $2,000 per child, capped at $4,000 per family. Funds cover curriculum, learning tools, tutoring, and online classes through approved ClassWallet providers.

When are CHOOSE Act funds available?

Funds are deposited into ClassWallet on July 1 of each school year. You first have to accept the program affidavit in ClassWallet to access them.

Is Outschool an approved provider?

Yes. Outschool is a confirmed approved Education Service Provider under the CHOOSE Act. Search for Outschool in ClassWallet to book classes, tutoring, and self-paced courses with your ESA funds. [1]

Is there an income limit?

For 2026-27, families must have an adjusted gross income at or below 300% of the federal poverty level. Beginning in 2027-28, the income requirement is eliminated and all Alabama K-12 students are eligible. [1]

Do unused CHOOSE Act funds roll over?

No. Any unused funds at the end of the academic year are returned to the state and do not carry over.

Build an education plan that fits your family

Alabama's school choice programs give families more ways than ever to shape a learning experience that fits their child. Whether you're managing CHOOSE Act funds through ClassWallet, claiming a tax credit at year-end, or accessing a scholarship through an SGO, each option opens a different door. Our ESA back-to-school planning guide has more ways to make the most of your funds this fall.

Sources

1. Alabama Department of Revenue. (2026). The CHOOSE Act: Education savings account program overview. revenue.alabama.gov/tax-policy/the-choose-act/