Alabama CHOOSE Act approved expenses 2026-27: what your ESA funds can pay for

Published July 7, 2026

Last updated July 28, 2026

Alabama CHOOSE Act 2026-27: the quick overview

Alabama's CHOOSE Act (Creating Hope and Opportunity for Our Students' Education Act) is an education savings account (ESA) program. It's funded through a refundable state income tax credit, but families don't file anything at tax time: once you're approved, funds are loaded directly into a ClassWallet digital wallet you spend during the school year. For 2026-27, those funds are now fully available in ClassWallet. [1]

Award amounts vary by how your child receives their education:

Participating private school students: $7,000 per student per year
Home education students: $2,000 per student per year, capped at $4,000 per family

For 2026-27, families must have an adjusted gross income (AGI) at or below 300% of the federal poverty level to be eligible. Starting with the 2027-28 academic year, that income requirement goes away, and the CHOOSE Act opens to all Alabama K-12 students regardless of household income. [1]

How funds work through ClassWallet

The Alabama Department of Revenue (ALDOR) contracted with ClassWallet to distribute and manage CHOOSE Act funds. Once your family is approved and your award is issued, funds appear in your ClassWallet digital wallet. You browse approved Education Service Providers (ESPs) directly through ClassWallet and pay them from your wallet, with no out-of-pocket cost for approved purchases.

This is not a reimbursement program. You do not pay first and request money back. The wallet model means your spending is limited to approved ESPs on the ClassWallet platform, and all transactions are automatically tracked. [1]

Who qualifies as an approved Education Service Provider?

ALDOR approves individual schools, organizations, and businesses as ESPs. To be listed, providers apply through ALDOR's ESP application portal and receive approval within 14 days. Approved providers appear on the ALDOR ESP directory and are searchable in ClassWallet.

ESP categories include online education classes and courses, private K-12 schools, tutoring providers, curriculum and instructional materials vendors, assessment and testing services, educational technology providers, and therapeutic or specialized service providers. [1]

What CHOOSE Act funds can cover: ESP categories explained

Online education classes and courses

Online learning platforms approved by ALDOR fall into this category. Outschool is listed on the ALDOR ESP directory under "Online Education Classes/Courses" as both "A Learning Marketplace (Outschool.com)" and "Outschool.com," and is bookable directly through ClassWallet. [1]

This covers live group classes, 1:1 tutoring sessions, and self-paced courses from approved platforms, across core academic subjects as well as enrichment and specialized topics.

Private K-12 school tuition and fees

Families using CHOOSE Act funds to enroll in a participating private school apply the $7,000 award toward tuition and required fees at that school. The school must be an approved CHOOSE Act participating school.

Tutoring services

Private tutoring from approved tutoring providers qualifies. If you are booking a 1:1 tutoring session through an approved online learning platform like Outschool, it falls under the online courses category. In-person or platform-specific tutoring services approved through ALDOR as standalone tutoring providers fall here.

Curriculum and instructional materials

Curriculum packages, workbooks, textbooks, and instructional materials from approved vendors qualify. Materials must serve a direct academic purpose and be purchased from an ESP listed on the ClassWallet platform.

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Assessment and testing services

Standardized tests and academic assessments from approved providers qualify. This includes norm-referenced tests, diagnostic assessments, and college entrance exams from approved vendors.

Educational technology

Computer hardware and educational software from approved technology vendors may qualify. Check the ALDOR ESP directory for approved technology vendors before purchasing, as not all technology purchases are automatically eligible.

Specialized educational and therapeutic services

For students with qualifying disabilities or special needs, approved therapeutic services that support learning, such as speech therapy, occupational therapy, or behavioral support, may qualify when provided by approved ESPs.

Expenses CHOOSE Act funds do not cover

Purchases from providers not listed on the ALDOR ESP directory
Food, clothing, and general household expenses
Entertainment and non-educational software or subscriptions
Sports and recreational activities without academic components
Any purchase made outside the ClassWallet platform

Because all purchases go through ClassWallet, the platform's ESP directory is effectively your eligibility guide. If a provider is not listed in ClassWallet, you cannot purchase from them using CHOOSE Act funds.

How to use CHOOSE Act funds for Outschool classes

Outschool's listing on the ALDOR ESP directory means Alabama families can book classes directly through ClassWallet. Here is how it works:

Log in to your ClassWallet family account.
Search for Outschool in the ClassWallet marketplace.
Browse available classes and select what fits your child's learning goals.
Complete the purchase through ClassWallet. Funds are deducted from your ESA balance.

Three class formats are available on Outschool, all of which qualify under the "Online Education Classes/Courses" category: live small-group classes, 1:1 tutoring sessions, and self-paced courses. For more on the CHOOSE Act program itself, see our Alabama CHOOSE Act program guide, or visit our Alabama ESA hub to browse class categories and get funding updates.

Key dates for 2026-27

Application portal: Closed March 31, 2026. The 2027-28 cycle will open in early 2027.
Award notifications: Sent via email beginning April 15, 2026.
2026-27 funds: Fully funded and available in ClassWallet wallets as of July 2026.
2027-28 eligibility change: Income requirement eliminated. All Alabama K-12 students will be eligible regardless of household income.

Frequently asked questions

My child is homeschooled. Do we qualify for the full $7,000?

No. Home education students receive $2,000 per student per year, capped at $4,000 per family. The $7,000 award is for students enrolled in a participating private school. Both tracks access funds through ClassWallet and can purchase from approved ESPs including Outschool.

Can I use CHOOSE Act funds from a prior year for 2026-27 purchases?

CHOOSE Act ESA funds are issued per academic year. Contact ClassWallet to confirm any carryover rules that may apply to your specific account and situation.

What if the provider I want to use is not in ClassWallet?

Providers must be approved by ALDOR and listed in ClassWallet to accept CHOOSE Act funds. If a provider you want to use is not listed, they can apply through ALDOR's ESP portal at revenue.alabama.gov/tax-policy/the-choose-act/. Purchases outside of approved ESPs are not eligible.

Is there an income limit for 2026-27?

Yes. For 2026-27, families must have an adjusted gross income at or below 300% of the federal poverty level. Beginning with the 2027-28 academic year, the income requirement is eliminated.