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HB342 • 2026

Taxation; participation in the federal tax credit for individuals making qualified contributions to scholarship granting organizations provided for

Taxation; participation in the federal tax credit for individuals making qualified contributions to scholarship granting organizations provided for

Education Taxes
Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor
DuBose
Last action
2026-03-05
Official status
Read Second Time in Second House
Effective date
Not listed

Plain English Breakdown

The official source material does not provide additional details beyond what is already stated in the candidate explanation.

Alabama's Participation in Federal Scholarship Tax Credit

This bill allows Alabama to join a federal tax credit program that gives people who donate money to scholarship organizations a tax break.

What This Bill Does

  • Allows Alabama to take part in the federal tax credit for individuals who give money to scholarship granting organizations.
  • Requires the Department of Revenue to make an annual list of all scholarship granting organizations in Alabama that meet certain requirements and publish it on their website.
  • Directs the Department of Revenue to confirm with the U.S. Secretary of the Treasury that Alabama can participate in this tax credit program starting after December 31, 2026.
  • Gives the Department of Revenue permission to create rules for how to run and manage this new tax credit program.

Who It Names or Affects

  • People who give money to scholarship granting organizations in Alabama
  • Scholarship granting organizations located in Alabama
  • The Department of Revenue

Terms To Know

scholarship granting organization
A group that gives out scholarships to help students pay for school.
tax credit
An amount you can subtract from the taxes you owe, which lowers how much tax you have to pay.

Limits and Unknowns

  • The bill does not specify what happens if a scholarship granting organization in Alabama does not meet the requirements.
  • It is unclear when exactly this act will become effective since it depends on federal regulations and guidance after December 31, 2026.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

FKN8PCD-1

R 654

Adopted

Plain English: FKN8PCD-1 02/11/2026 OW (H) HSE 2026-481 House Fiscal Responsibility Reported Substitute for HB342 Page 1 A BILL TO BE ENTITLED AN ACT Relating to federal tax credits; to provide for the State of Alabama's participation in the federal tax credit for individuals who make qualified contributions to scholarship granting organizations.

  • FKN8PCD-1 02/11/2026 OW (H) HSE 2026-481 House Fiscal Responsibility Reported Substitute for HB342 Page 1 A BILL TO BE ENTITLED AN ACT Relating to federal tax credits; to provide for the State of Alabama's participation in the federal tax credit for individuals who make qualified contributions to scholarship granting organizations.
  • BE IT ENACTED BY THE LEGISLATURE OF ALABAMA: Section 1.
  • (a) The Legislature voluntarily elects the State of Alabama to participate in the federal tax credit established under 26 U.S.C.
  • § 25F for individuals who make qualified contributions to scholarship granting organizations.
  • This amendment summary is using official source text because generated interpretation was skipped for this run.

Bill History

  1. 2026-03-05 Senate

    Read for the Second Time and placed on the Calendar

  2. 2026-03-04 Senate

    Reported Out of Committee Second House

  3. 2026-02-26 House

    Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 655 (Yeas 103, Nays 0)

  4. 2026-02-26 House

    Motion to Adopt - Adopted Roll Call 654 (Yeas 99, Nays 0)

  5. 2026-02-26 House

    Third Reading in House of Origin (Yeas 103, Nays 0)

  6. 2026-02-26 Senate

    Pending Committee Action in Second House

  7. 2026-02-26 Senate

    Read for the first time and referred to the Senate Committee on Finance and Taxation Education

  8. 2026-02-26 House

    Engrossed

  9. 2026-02-26 House

    Fiscal Responsibility Engrossed Substitute Offered

  10. 2026-02-12 House

    Read for the Second Time and placed on the Calendar

  11. 2026-02-11 House

    Reported Out of Committee House of Origin

  12. 2026-01-29 House

    Pending Committee Action in House of Origin

  13. 2026-01-29 House

    Read for the first time and referred to the House Committee on Fiscal Responsibility

Official Summary Text

Taxation; participation in the federal tax credit for individuals making qualified contributions to scholarship granting organizations provided for

Current Bill Text

Read the full stored bill text 
HB342 ENGROSSED
Page 0
HB342
FKN8PCD-2
By Representative DuBose
RFD: Fiscal Responsibility
First Read: 29-Jan-26
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HB342 Engrossed
Page 1
First Read: 29-Jan-26
A BILL
TO BE ENTITLED
AN ACT
Relating to federal tax credits; to provide for the
State of Alabama's participation in the federal tax credit for
individuals who make qualified contributions to scholarship
granting organizations.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. (a) The Legislature voluntarily elects the
State of Alabama to participate in the federal tax credit
established under 26 U.S.C. § 25F for individuals who make
qualified contributions to scholarship granting organizations.
(b) The Department of Revenue shall annually submit to
the U.S. Secretary of the Treasury and publish on the
Department of Revenue's website a list of all scholarship
granting organizations that meet the requirements under 26
U.S.C. § 25F and are located in this state. The Department of
Revenue shall certify to the U.S. Secretary of the Treasury
the Department of Revenue's authority to submit the list on
behalf of the state and comply with the requirements of 26
U.S.C. § 25F, including any applicable federal regulations or
guidance, to ensure that the state is eligible to participate
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HB342 Engrossed
Page 2
guidance, to ensure that the state is eligible to participate
in taxable years beginning after December 31, 2026.
(c) The Department of Revenue may establish rules for
the implementation and administration of this act.
Section 2. This act shall become effective immediately.
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HB342 Engrossed
Page 3
Section 2. This act shall become effective immediately.
House of Representatives
Read for the first time and referred
to the House of Representatives
committee on Fiscal Responsibility
................29-Jan-26
Read for the second time and placed
on the calendar:
1 amendment
................12-Feb-26
Read for the third time and passed
as amended
Yeas 103
Nays 0
Abstains 1
................26-Feb-26
John Treadwell
Clerk
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