How Does It Work?

  • Every taxpayer in America is eligible to donate to a non-profit scholarship-granting organization (SGO) to receive the tax credit.
    There is no annual aggregate cap nationwide.


  • Each taxpayer can donate up to $1,700 to an SGO and will receive a dollar-for-dollar federal income tax credit for that contribution. Married couples can each contribute and claim the credit, for a combined benefit of up to $3,400. This tax credit is operated out of the Department of the Treasury, not Department of Education.


Who Benefits?

Student eligibility is 300% of median gross income by area, which covers approximately 90% of the K-12 students in every state. Estimated Annual Maximum Income for a Family of 4 (2025) in the following respective areas:

Huntsville



$345,300

Birmingham



$312,300


Montgomery



$266,400

Mobile



$249,900


What Should Families Know?

Builds on Alabama's existing school choice programs: EFTC doesn't replace what's already in place — families eligible for state programs like the AAA scholarships or the CHOOSE Act can still use those benefits alongside federal-tax scholarships (subject to program rules), helping families bridge the gap between available aid and the full cost of tuition.


Assistance with school related expenses: Under the EFTC initiative, scholarship funds may be used for expenses incurred in connection with an eligible K–12 student’s enrollment or attendance at a public, private or religious school, including*:

  • Tuition, uniforms, transportation and other fees
  • Books and supplies
  • Academic tutoring
  • Extended day programs
  • Computer technology, equipment, or internet access
  • Educational therapies (e.g., occupational, speech, behavioral, physical)


*as defined by the U.S. Department of the Treasury