SB261 Alabama 2022 Session

Summary

Primary Sponsor

Dan RobertsSenator

Republican

Co-Sponsors

Sam GivhanDel Marsh

Session

Regular Session 2022

Title

Schools, failing, scholarships for students assigned to in order to attend another public or nonpublic school, income tax credits for contributions to scholarship granting organizations increased, Sec. 16-6D-9 am'd.

Summary

SB261 expands Alabama's tax credit for contributions to scholarship granting organizations to fund educational scholarships, adds strict accountability rules, and applies retroactively to 2021 tax years.

What This Bill Does

It allows individuals, married couples, and corporations to claim a tax credit for contributions to scholarship granting organizations (SGOs), with the credit equal to the contributed amount up to the taxpayer's liability. Individual credits are capped (e.g., $50,000 for individuals or $100,000 for couples) while corporate credits apply against tax liability; all credits are limited by an annual statewide cap of $30 million and can be carried forward up to 3 years. The bill imposes extensive administrative, financial, and academic standards for SGOs and participating nonpublic schools, requires regular reporting and testing to measure student outcomes, and establishes enforcement mechanisms and public disclosures. It also makes the program retroactive to tax years beginning after December 31, 2021.

Who It Affects

• Taxpayers who donate to scholarship granting organizations (including individual filers, married couples filing jointly, and some corporate filers) would be able to claim tax credits for their contributions, subject to caps and carryforward rules.
• Scholarship granting organizations and qualifying nonpublic schools would face detailed accountability, reporting, testing, and financial requirements to participate and receive funds, plus potential penalties for noncompliance.

Key Provisions

• Provision 1: Tax credits for contributions to scholarship granting organizations are allowed up to 100% of contributions, with per-return caps for individuals and couples (e.g., up to $50,000 for an individual or $100,000 for a joint return) and 100% of tax liability for corporate filers; total credits may not exceed $30,000,000 annually; credits may be carried forward for up to three taxable years; retroactive to tax years beginning after December 31, 2021.
• Provision 2: SGOs and participating nonpublic schools must meet comprehensive standards—administrative, financial, and academic—including minimum spending on scholarships (at least 95% of donations), background checks, portability of scholarships, annual and quarterly reporting, testing of participating students, independent analysis of learning gains, prohibitions on donor-directed scholarships, and mechanisms to bar noncompliant organizations or schools.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Education