HB129 Summary: CHOOSE Act

• Establishes a refundable income tax credit and education savings accounts (ESAs) to help parents pay for qualifying educational expenses including tuition, tutoring, curricula, online programs, and special education services.

• For 2025-2026, credits are limited to families earning up to 300% of federal poverty level; starting 2027, credits available to all families with amounts up to $7,000 annually for participating school students and $2,000 for other education services (aggregate cap of $4,000).

• Requires Alabama Department of Revenue to administer the program, approve participating schools and education service providers, and create ESAs funded by tax credits that parents can use for qualifying expenses.

• Reserves first 500 tax credits for special-needs students and prioritizes participating students and siblings, then active duty military dependents, then based on family income as percentage of federal poverty level.

• Creates CHOOSE Act Fund with minimum $100 million annual appropriation beginning fiscal year 2026; excess funds above $500 million revert to Education Trust Fund.