Alabama opens its §25F SGO application: a Notice of Intent to Participate, emailed to the Department of Revenue

Alabama is taking applications. The Alabama Department of Revenue (ALDOR) has posted a two-page Education Freedom Tax Credit Program Scholarship Granting Organization Notice of Intent to Participate, and on November 13 it added a new answer to its Education Freedom Tax Credit page: “How does an organization apply to become a certified Alabama SGO?” You fill in the form, initial eleven statements, attach seven documents and email the whole package to the department. ALDOR “will review the submission and verify the organization’s eligibility before certification is granted.” It's the filing step Alabama organizations have waited on since Gov. Kay Ivey named ALDOR to run the program in Executive Order 742 on January 16, and since the department published its certification criteria the next day.

How you file. Email the completed notice and “ALL required documentation” to EFTCProgram@revenue.alabama.gov. Section I asks for the organization's legal name as it appears on its 501(c)(3) determination letter, its federal tax ID, year of formation and taxable year, mailing address, phone, email and website, and whether it's a single-state or multistate SGO. Then come the principal officer completing the form and, if it's someone else, a primary contact. The principal officer signs Section III, attesting that the documents are true and correct and agreeing that the organization will comply with §25F and “the associated federal and state regulations.” The organization also promises to tell the department immediately if its eligibility changes. Neither the form nor the page lists a fee or a state deadline. Questions go to the department at 334-242-0950, the number printed on the form, which closes with a warning: submitting it “does not constitute automatic approval.”

The eleven statements. Section II has you initial each line, and each one tracks §25F or Treasury's rules. The organization is authorized to do business in Alabama and complies with the state's charity laws, which is how Treasury defines being located in a state (§ 1.25F-1T(a)(10)). It's a 501(c)(3) public charity, not a private foundation, that “has received recognition or has a pending application.” It keeps one or more separate accounts only for qualified contributions. It meets §25F(d), funds 10 or more students who don't all attend the same school, and spends at least 90 percent of its income on scholarships. It pays only qualified expenses under §530(b)(3)(A) and gives priority to students who had a scholarship the year before, then to their siblings. It never earmarks a gift for a particular student, verifies each applicant's household income and family size against the limit of 300% of area median gross income, and makes no award to a disqualified person under rules like §4946. Unlike the department's web page, the form doesn't add an Alabama-only rule (more on that below).

The seven documents. The package carries your IRS determination letter confirming 501(c)(3) status; proof of entity registration or a Certificate of Authority from the Alabama Secretary of State; a Certificate of Compliance from ALDOR; written policies showing you keep separate accounts for qualified contributions; your scholarship award policies, including how you verify income; policies showing you follow the §4946 disqualified-person rules; and a board resolution authorizing the principal officer to submit the form, or a certificate of incumbency or articles of incorporation that name that officer. The form doesn't say how to request the Certificate of Compliance, so ask when you call. The four policy documents are the real work, and a new organization can write them before it has awarded a single scholarship. The free SGO Builder walks through each one.

If your Form 1023 is pending. Ask before you file. The second statement covers an organization that “has received recognition or has a pending application,” but the document list asks for an “IRS Determination Letter confirming 501(c)(3) status” and offers nothing in its place, and the page doesn't say. Treasury's temporary regulations, which take effect without a comment period and apply from September 1, 2026, let a state list organizations whose applications are pending if it lists every pending applicant that asks and certifies that the exemption, if granted, reaches back to January 1 of the list year or earlier (§ 1.25F-5T(d)(5)). For 2027 that means a nonprofit incorporated by December 31, 2026. Alabama hasn't said whether it will take that route. The states that do include Nebraska, Oklahoma and Alaska.

Register in Alabama first. An organization incorporated outside Alabama needs two state filings, and the first goes in the package. The Secretary of State's foreign corporation registration costs $150, or $156 online. The Attorney General's charitable organization registration is $25 a year; an organization raising $25,000 or less a year with unpaid fundraisers is exempt but still files the exemption form. Both go to the first statement you initial, that the organization is authorized to do business in Alabama and follows its charity laws. How to apply in Alabama links each one.

The Alabama-only line. The department's page still says an Alabama SGO “will only be able to provide scholarships to students in Alabama.” The form doesn't repeat it, and it asks whether you're a single-state or multistate SGO, so the department expects multistate organizations to file. Under the proposed rules a multistate SGO keeps a separate §25F account for each state that lists it, and scholarships paid from a state's account go to students who live in that state (prop. § 1.25F-3(c)(3) and (c)(7)), so Alabama money funds Alabama students either way. Treasury's temporary regulations bar a state from requiring SGOs to operate more restrictively than §25F(c)(5) (§ 1.25F-5T(e)(2)). If you serve other states too, ask the department how it reads its line before you sign.

What comes next. Alabama hasn't posted a deadline, but the federal calendar sets one: February 15, 2027 is the last day for 2027 state lists, and after it a state can't add organizations for that year (§ 1.25F-5T(d)(7)(ii)). Alabama's list has to include every organization located in Alabama that asks to be listed and meets the federal requirements. The notice is for the federal program only, and nothing on the page says a certification under the Alabama Accountability Act, the state's own scholarship tax credit, carries over. Like Alaska, Alabama takes applications by email; every state's process is in one place. The Alabama SGO page and Alabama state page will show the first approvals when the department names them.