HB137 Alabama 2010 Session

Summary

Primary Sponsor

Barry Mask

Republican

Session

Regular Session 2010

Title

Income tax, work opportunity income tax credit based on federal income tax credit, Sec. 40-18-182 added

Summary

Alabama would create a state Work Opportunity Credit worth 20% of the federal Work Opportunity Tax Credit attributable to Alabama residents, phased in over two years and conditioned on Education Trust Fund growth.

What This Bill Does

The bill adds a state credit against Alabama income tax for employers that qualify for the federal Work Opportunity Credit, equal to 20% of the portion of the federal credit attributed to Alabama residents. It is available only to employers who qualify for the federal credit under IRC Section 51 and is phased in over two adjustment years based on projected growth in the Education Trust Fund, with implementation contingent on a 3% estimated growth threshold certified by the Department of Finance. The credit would apply to tax years beginning after December 31, 2010 (effective January 1, 2011) and reduces the amount of state income tax owed by eligible employers.

Who It Affects

• Employers in Alabama that hire and employ Alabama residents in targeted, higher-risk categories and qualify for the federal Work Opportunity Credit; they would be able to claim a state credit equal to 20% of the federal credit attributable to Alabama residents against their Alabama income tax.
• Alabama residents who fall into the targeted, higher-risk categories; they may benefit indirectly through increased hiring opportunities as employers pursue the federal (and state) credits.

Key Provisions

• Creates the Alabama Work Opportunity Credit (Section 40-18-182); the credit amount is 20% of the portion of the federal Work Opportunity Credit attributable to Alabama residents and is applied against the Alabama income tax.
• Eligibility mirrors the federal credit; eligible employers must qualify for the federal WOTC under Internal Revenue Code Section 51.
• Phased in over two adjustment years in equal installments; an adjustment year requires at least 3% estimated growth in the Education Trust Fund as certified by the Department of Finance for the following year; Revenue implements the provisions upon certification.
• Effective for tax years beginning on or after January 1, 2011; provisions are severable and any conflicting laws are repealed.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation