MONTGOMERY, Ala. – Gov. Kay Ivey signed an executive order on Friday, Jan. 16 expanding school choice options in Alabama by committing the state to participate in a new federal scholarship tax credit program.
Executive Order No. 742 authorizes Alabama to join the Federal Education Freedom Tax Credit program, created under the One Big Beautiful Bill Act signed by President Donald Trump last July. The program, also known as the Federal Scholarship Tax Credit, offers federal tax credits for contributions to approved scholarship organizations that provide education assistance to eligible students.
Gov. Ivey’s action comes ahead of National School Choice Week, which begins Jan. 25, and follows her recent State of the State address, where she pledged to make Alabama “the most school choice friendly state in the nation.”
“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,” Gov. Ivey said in a statement.
The Governor pointed to the Alabama Accountability Act of 2013, which created scholarship opportunities for students transferring to higher-performing schools, and the CHOOSE Act, a universal school choice law signed two years ago that provides refundable tax credits for qualifying educational expenses.
Under the federal program, donors receive tax credits for contributions to scholarship-granting organizations. Those funds may be used for tuition, books, fees, supplies, tutoring, and special needs services at public, private, and religious schools. Participants in Alabama’s existing school choice programs may be eligible for the federal scholarships.
The executive order directs the Alabama Department of Revenue to administer the program and certify eligible scholarship organizations. The Federal Education Freedom Tax Credit program is scheduled to take effect in January 2027.
