(a) An Alabama income and financial institution excise tax credit is hereby established for small businesses that create new jobs paying more than ten dollars ($10) per hour. The credit shall equal one thousand dollars ($1,000) and shall be available in the tax year during which the employee has completed 12 months of consecutive employment.
(b) The employer must have a net increase in the total number of full time employees in Alabama on the last date of each tax year during which employees are hired for which the employer claims a credit, over the number employed in Alabama as of the last day of the tax year immediately preceding the first employment year. The increase must equal or exceed the number of newly hired employees for which a credit is sought by one employee for each newly hired employee for whom a credit is being sought for the current year, plus one employee for all employees for whom credits were claimed in prior years.
(c) The credit shall be allowed against the tax imposed by Chapter 16 or Chapter 18, of this title. This tax credit shall not be allowed to decrease a taxpayer's tax liability to less than zero. The credit is not refundable or transferable. The credit shall be available, on a pro rata basis, to the owners of qualified employers that are entities taxed under subchapters S or K of the Internal Revenue Code.
(d) A financial institution shall be allowed to claim the credit against the liability determined in Chapter 16 of this title.
(e) The income tax credit provided in this section may be claimed only for employees who are hired following June 9, 2011.
Last modified: May 3, 2021