The federal scholarship credit in Alabama
What it means for families in Alabama
K-12 students who live in Alabama can get a federal scholarship toward tuition and fees once the program starts. Household income has to be at or below 300% of your area's median, and foster children qualify automatically.
Scholarships are paid to a partner school, so the first step is finding out whether your child's school takes part. If it doesn't yet, recommend it and we'll reach out.
What it means for donors in Alabama
Any US taxpayer can donate and claim up to $1,700 against federal income tax, dollar for dollar, starting January 1, 2027. When you donate to CEN SGO, you choose the partner school your donation supports.
Alabama also has its own scholarship tax credit. Donors cannot claim a federal and state tax credit on the same funds, so your $1,700 federal credit contribution needs to be claimed separately from any claimed state credit contribution.
For schools in Alabama
Families only get scholarships through a partner school, so schools come first. Registering with CEN SGO costs nothing. It's one agreement, and CEN handles donor receipts, income checks, awards, payments and reporting.
Schools that register before donations open on January 1, 2027 can run a pledge campaign with their parents first.
In Alabama, scholarship granting organizations are certified by the Alabama Department of Revenue.
Alabama at a glance
Alabama has opted in to the federal Education Freedom Tax Credit, so families here can get scholarships when the program starts on January 1, 2027.
- January 16, 2026
- Opted in · Executive Order 742
- Kay Ivey
- Governor
- January 1, 2027
- The federal credit goes live
- $1,700
- The most a donor can claim each year
- Accountability Act SGO program
- State scholarship credit
- Alabama Department of Revenue
- Certifies SGOs · Criteria published January 2026
Key dates
Every date in one placeJanuary 16, 2026
Alabama opted in (Executive Order 742)
Fall 2026
States open certification for scholarship granting organizations
Next
January 1, 2027
The first day a donation earns the federal credit
December 31, 2027
The last day to donate for the 2027 return
Early 2028
The IRS form comes out and 2027 returns are filed
Questions
Questions about Alabama
Short answers for families and donors in Alabama. Every other question is on the FAQ page.
Does Alabama take part in the federal credit?
Yes. Opted in January 16, 2026 (Executive Order 742). Families here can get scholarships when the program starts on January 1, 2027.
Who decided for Alabama?
Governor Kay Ivey opted Alabama in. Each year the governor sends Treasury the list of qualifying scholarship granting organizations.
Can people in Alabama donate and claim the credit?
Yes. Any US taxpayer can claim up to $1,700 against federal income tax for a donation to a qualifying scholarship granting organization, starting January 1, 2027.
When does it start?
January 1, 2027. Donations made on or after that date count toward the credit.
Can I claim a state credit too?
Yes, with two separate donations. Donors cannot claim a federal and state tax credit on the same funds, so your $1,700 federal credit contribution needs to be claimed separately from any claimed state credit contribution.
Keep reading
Guides for families and donors
Is your child's school in Alabama?
Recommend it and we'll reach out to the school about taking part. It takes a minute.