Texas Education Freedom Accounts Eligibility and Income Limits

The Four Core Requirements

Every TEFA applicant must meet four baseline criteria before income or priority tiers matter:

1. Texas residency — the applying parent or guardian, verified through a state-issued ID and residency documentation dated within 60 days (utility bill, lease, or mortgage statement)
2. U.S. citizenship or lawful presence — the child must be a citizen, national, or lawfully admitted non-citizen
3. School-age eligibility — the child must be eligible for a Texas public primary or secondary school, or qualify for Pre-K under TEC § 29.153
4. No public school enrollment — the student can't be simultaneously enrolled in a public school district or open-enrollment charter school while receiving TEFA payments

These aren't income-gated. A family at any income level can apply. Income determines your priority tier in the lottery, not whether you're allowed to apply.

How Income Tiers Work

The Comptroller measures household income using Federal Adjusted Gross Income (AGI) from your most recent IRS Form 1040. This is strictly enforced — pay stubs, W-2 forms, and alternative documentation were rejected during the inaugural cycle, resulting in approximately 25,500 application disqualifications.

Here's how the tiers break down for the inaugural 2026–2027 year:

Tier 1 — Students with documented disabilities whose household AGI falls at or below 500% of the Federal Poverty Level. For a family of four, that's about $165,000 using the 2026 HHS guideline. Requires an active IEP, a Full and Individual Initial Evaluation (FIIE), or a program-approved proof-of-disability form.

Tier 2 — Students from households with AGI at or below 200% FPL. For a family of four, that's about $66,000 using the 2026 HHS guideline. These families receive second priority after disability applicants.

Tier 3 — Households with AGI above 200% and at or below 500% FPL. Awarded by lottery within the tier.

Tier 4 — Households above 500% FPL. State law caps Tier 4 at a maximum 20% of total program funds. Within this tier, students enrolled in a Texas public or charter school for at least 90% of the prior school year receive priority.

The 500% FPL Ceiling Is Not an Eligibility Cutoff

A common misunderstanding: families above 500% FPL are not excluded. SB 2 explicitly reserves funding for all income levels. Tier 4 is capped at 20% of the $1 billion appropriation — that's $200 million earmarked for higher-income families. The cap limits how many upper-income accounts are funded, but doesn't bar anyone from applying.

Pre-K Has Extra Requirements

Children seeking Pre-K must turn three before September 1 of the school year and meet at least one of the additional eligibility criteria under TEC § 29.153(b):

• Unable to speak and comprehend English
• Economically disadvantaged under the Texas public Pre-K criteria (below 185% of the Federal Poverty Level)
• Experiencing homelessness
• Child of an active-duty U.S. armed forces member, Texas Military Forces member, or military reserve member
• Child of a military member injured or killed on active duty
• Currently or formerly in foster care
• Child of a Star of Texas Award recipient
• Child of a public school classroom teacher in the local district

Children who qualify receive the standard private school base award ($10,474) when enrolled in an approved non-public Pre-K program — they are not subject to the $2,000 homeschool cap.

Non-Tax-Filers

For the inaugural application cycle, families who had not filed federal taxes could use the Comptroller's official Income Affidavit instead of an IRS Form 1040 to document household income for tier placement.

What Disqualifies You

Beyond the four core requirements, the most common disqualification triggers during the inaugural cycle were documentation errors — submitting the wrong tax year, uploading pay stubs instead of a 1040, or providing residency proof older than 60 days. Process mistakes, not ineligibility, knocked out thousands of applications.

The TEFA Parent Guide includes a document preparation checklist built around these exact failure points, so your application doesn't get rejected over a paperwork technicality.

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