How to become an SGO in Alabama
Alabama is in the federal scholarship tax credit for 2027 but hasn't opened its application yet. Its list is due to the IRS by February 15, 2027, and it has to include every qualifying nonprofit that applies. Steps 1 to 5 below can be done now. If your nonprofit is incorporated in another state, Alabama's fees to get listed come to $175 before any application fee.
Deadline
Not open yet
Pending 1023 OK?
Not published yet
Application fee
Not published yet
State fees from out of state
$175, then $25/yr
How to apply in Alabama
No application yet. Executive Order 742 names the Department of Revenue to administer the federal credit. Its Education Freedom Tax Credit page lists what an Alabama SGO must be, including a 501(c)(3) that serves 10 or more students who don't all attend the same school, spends at least 90% of its income on scholarships, funds only Alabama students, and is certified by the Department. No application, fee, or deadline has been posted.
Contact: Alabama Department of Revenue, Income Tax Division: 334-242-1200 (corporate) or 334-353-0602 / 334-353-9770 (individual); help ticket at contact.revenue.alabama.gov/jira/servicedesk/customer/portal/6; mailing address 375 South Ripley Street, Montgomery, AL 36104.
Alabama’s requirements, in full (2)›
- May only fund scholarships for students in Alabama.
- Must be certified by ALDOR before participating.
What it costs in Alabama
For a nonprofit incorporated in another state. If you’re incorporated in Alabama, skip the registration line: your articles already cover it.
| What | Paid to | Once | Each year |
|---|---|---|---|
| Alabama SGO application | Alabama Department of Revenue | Not published | |
| Application for Registration (foreign corporation)Registers your nonprofit to do business in Alabama | Alabama Secretary of State | $150 | |
| Annual report | None for nonprofits | $0 | |
| Charitable organization registrationExempt while you raise $25,000 or less a year with unpaid fundraisers, but you still file the exemption form | Alabama Attorney General | $25 | $25 |
| Registered agentOnly if you have no Alabama address of your own. Commercial agents’ published prices. | A registered agent company | $100 to $160 | |
| Alabama state fees | $175 | $25 | |
Alabama dropped its annual report for corporations in October 2024.
The same wherever you apply: $600 to the IRS for Form 1023 ($275 for the EZ version, if you expect $50,000 a year or less in receipts), and a yearly audit once you’re listed, which Treasury estimates at about $10,000 at $500,000 or less in receipts and $30,000 above. Every state’s fees →
Fees checked October 20, 2026.
Your checklist for Alabama
Steps 1 to 5 are the same in every state, and you can do them now. Step 6 is Alabama’s application. Tick them off as you go; this browser remembers.
0 of 7 done · saved in this browser
Track it with an account in the free SGO Builder →1.Be a 501(c)(3) public charity
The IRS has to recognize you as a 501(c)(3), and you can't be a private foundation. Alabama hasn't said whether it takes nonprofits whose Form 1023 is still pending. If it does, it has to take every pending applicant that asks. Under Treasury's temporary regulations, a state can list a nonprofit whose Form 1023 is still pending only if the exemption, once granted, takes effect by January 1 of the list year. For 2027, that means the nonprofit has to be incorporated by December 31, 2026. (An exemption reaches back to the date you incorporated if you file Form 1023 within 27 months.)
2.Register in Alabama
Treasury's rules count you as "located in" Alabama if you're authorized to do business there and follow its charity laws. You don't need an office or staff there. If you're incorporated in another state, you register with the Alabama Secretary of State ($150) and for charitable solicitation with the Alabama Attorney General ($25). You'll also need a registered agent with a Alabama address.
3.Open a separate bank account for Alabama
Gifts for the credit go into an account that holds nothing else. If you're on more than one state's list, you keep one account per state and donors pick the state.
4.Put the §25F rules in your bylaws and policies
A new nonprofit has no track record, so the state reads its documents, and a promise to "follow the law" isn't enough. They have to require each rule: at least 90% of your income goes to scholarships, scholarships go to at least 10 students who aren't all at the same school, you verify household income, past recipients come first and then their siblings, no donor can earmark a gift for a particular student, and no scholarships go to insiders.
5.Register in the IRS SGO portal when it opens
Treasury asks every SGO to register in the IRS portal, ideally before a state lists it. The portal gives you the donor-number format your receipts use. It hasn't opened yet.
6.Apply when Alabama opens its application
No application yet. Executive Order 742 names the Department of Revenue to administer the federal credit. Its Education Freedom Tax Credit page lists what an Alabama SGO must be, including a 501(c)(3) that serves 10 or more students who don't all attend the same school, spends at least 90% of its income on scholarships, funds only Alabama students, and is certified by the Department. No application, fee, or deadline has been posted.
7.After you're listed
Send each donor a written acknowledgment by January 31 and report the gifts to the IRS by February 28. Under Treasury's proposed regulations, which you can rely on for 2027, you also file a yearly certification and report (with a copy to every state that lists you), get a yearly audit, and spend at least 90% of each year's income on scholarships by the end of the next year.
Where Alabama is in the process
Jan 16, 2026 · Executive Order 742
Names the Department of Revenue
Application process
Not yet published
Feb 15, 2027 · Federal deadline for 2027 state lists (expected)
Without a list, no organization in the state qualifies for 2027
Sources
Questions about getting listed in Alabama
How do I become an SGO in Alabama?
Be a 501(c)(3) public charity, register to do business in Alabama and follow its charity laws, open a separate bank account for Alabama's gifts, and put the §25F rules in your bylaws and written policies, then apply when Alabama opens its application. It hasn't yet.
How much does it cost to become an SGO in Alabama?
A nonprofit incorporated in another state pays $150 to register in Alabama and $25 to register for charitable solicitation. That's $175 before any application fee, then about $25 a year. Add a registered agent with a Alabama address if you don't have one (about $100 to $160 a year). The IRS charges $600 for Form 1023 wherever you apply.
What is Alabama's deadline for the 2027 SGO list?
Alabama hasn't published its own deadline yet. Every state's 2027 list is due to the IRS by February 15, 2027, and a state can't add anyone to its 2027 list after that. A gift made in December 2027 earns the credit only if the nonprofit made the 2027 list.
Can a nonprofit from another state get on Alabama's list?
Yes. Under Treasury's temporary regulations, you're located in Alabama if you're authorized to do business there and follow its charity laws. You don't need an office or staff in Alabama, and Alabama has to list every qualifying nonprofit located there that asks. Scholarships from your Alabama account go to students who live in Alabama.
Can we apply in Alabama while our 501(c)(3) application is pending?
Alabama hasn't said whether it takes nonprofits whose Form 1023 is still pending. If it does, it has to take every pending applicant that asks. Under Treasury's temporary regulations, a state can list a nonprofit whose Form 1023 is still pending only if the exemption, once granted, takes effect by January 1 of the list year. For 2027, that means the nonprofit has to be incorporated by December 31, 2026. (An exemption reaches back to the date you incorporated if you file Form 1023 within 27 months.)
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