Frequently Asked Questions

AOSF was established in 2013 and provides tax credited scholarships to low-income K-12 children across Alabama to attend the public or private school of their choice. Our mission is to empower families to choose the school that best fits their child’s unique educational needs. 

AOSF provides scholarships to income-eligible, K-12 children who are not succeeding in their current environment. Scholarships are funded by the donation of corporate and individual Alabama income tax liability. AOSF leads the way statewide in providing over 1,500 low-income children the educational opportunity that will give them a successful and productive future.

Yes. It is now more critical than ever since last year’s donations to all Scholarship Granting  Organizations (SGOs) declined drastically due to lack of clarity from the IRS. Once the IRS issued new guidance in December, it was too late for all previous donors to take advantage of 2019 tax credit donations. Because of this decline, some SGOs are no longer able to provide scholarships to hundreds of families across Alabama. 

Tax credit donations allow a donor to give a portion of their existing tax liability to an SGO like AOSF. Instead of sending 100% of an existing tax liability to the Alabama Department of Revenue (ADOR), contributors can donate up to 100% to directly fund scholarships and send the remainder to the ADOR. 

If I owe $30,000 in Alabama corporate income taxes, can I really send $30,000 directly to scholarships to help a child succeed? 

Yes. Alabama allows up to $40 million of tax liability to be redirected directly to fund scholarships for incomeeligible students. As long as credits are still available, you can donate.

It is important to note you cannot designate your tax-credit donation to a certain school. But you can be certain that your donation will help students in Alabama succeed.

Yes. If your CPA or tax advisor has any questions about the new changes or how to make a reservation on your behalf, please have them reach out to us. And some pass-through-entities can take an additional federal tax

deduction based on the donation as well. 

We always urge donors to reserve their tax credits and donate earlier in the year rather than later. Reserving tax credits now allows students and families to plan for the next school year knowing that funds will be available for their existing scholarships. Some students currently on scholarships recently found out that their scholarships won’t be renewed by their SGO next year. This will be a devastating loss for the students and the schools. 

For pass-through entities seeking to take advantage of the new IRS guidance, the credits are issued on a first-come, first-served basis. Quarterly taxpayers can reduce their April 15 estimated quarterly tax payment by the amount that they donate to AOSF.

Income-eligible students whose families want to choose a school that best fits their child’s unique educational needs.

Each year the Alabama Department of Revenue allocates $40 million in tax credits. These are available on a first-come, first-served basis, so if you want to support the ability of children to thrive in a school that fits their needs, this is a great way. Head to www.myalabamataxes.gov to make a reservation to donate up to 100% of your Alabama tax-liability to AOSF or contact your tax professional.

Yes! You can make the reservation yourself through the Department of Revenue self-service site. Please visit our donate page for more details.

Once your check is received, we will verify your donation with the ADOR and send you a donation receipt. The ADOR will send you a receipt for your tax credit.

Yes and no. Alabama tax credit scholarships are not new. However, clarifications from the IRS now mean that certain types of businesses called pass-through entities can further reduce their federal tax bill. Make your 2023 reservations now!

Andy Ryan

Executive Director

aryan@alosf.org

(205) 206-7808

P.O. Box 59188

Birmingham, AL 35259