Accountability Act of 2013 Parent-Taxpayer Refundable Tax Credits

Eligibility for the program is characterized by the enrollment in, or assignment to attend, a priority school. Alabama defines a public school as priority if it meets one or more of the following requirements: (1) The school is designated as a priority school by the state Superintendent of Education, or (2) the school does not exclusively serve a special population of students and has received a D or an F on the most recent state report card. A student qualifies if they attended a priority school the prior school year; the student was assigned to a priority school for the upcoming year but previously attended elsewhere in the Alabama public school system; or the student was notified of assignment to a priority school for the next school year. Families may transfer students to public schools outside the assigned priority school zone or attend a nonpublic school to receive the credit. A student enrolled in the Department of Youth Services School District is not permitted. The student is eligible for the grade levels of the assigned priority school, even if the letter grade improves during the student’s enrollment or assignment. _(Last updated July 15, 2024)_

Parents may receive tax credits for the cost of transferring students to private schools to cover tuition costs and any mandatory fees. _(Last updated July 15, 2024)_

Parents receive a tax credit worth the lesser of (1) 80% of the average annual state cost of attendance for a K–12 public school student during the applicable tax year, or (2) their student’s actual cost of attending school. If the taxes owed by the parents are less than the total credit allowed, they may receive a rebate equal to the balance of the unused credit. The Alabama Department of Revenue funds any rebates from an appropriation of sales tax revenue in the Education Trust Fund. Alabama students may increase their scholarship value by taking advantage of both the Education Scholarship Program and this program. The sending public school keeps the remaining 20% of state funding in addition to any local or federal money associated with the cost of educating the transferring student. _(Last updated July 15, 2024)_

Both state and federal challenges to this program were successfully defeated. On April 8, 2014, a U.S. District Court judge dismissed a claim brought by the Southern Poverty Law Center challenging the Alabama Accountability Act on grounds the school choice program violated equal protection _C.M., et al., v. Robert J. Bentley, M.D. et al_., 13 F.Supp.3d 1188 (N.D. Ala. 2014). On March 2, 2015, the Alabama Supreme Court ruled, in an 8-1 decision, that the Alabama Accountability Act enacted in 2013, which includes Alabama’s refundable tax credit and tax-credit scholarship program, is constitutional. The high court overturned a May 2014 lower court ruling by the Montgomery County Circuit court which initially struck down the Alabama Accountability Act. _Magee v. Boyd,_ 175 So.3d 79 (Ala. 2015). _(Last updated December 6, 2023)_