HB163 Alabama 2010 Session

Summary

Primary Sponsor

Duwayne Bridges

Republican

Session

Regular Session 2010

Title

Income tax, employment, employers hiring persons receiving unemployment compensation, tax credit authorized, duties to Industrial Relations Department and Revenue Department, Back to Work Act, Sec. 40-18-136.1 added

Summary

HB163 creates the Back to Work Tax Credit of 2010 to encourage Alabama employers to hire unemployed people, with tiered tax credits based on wage and other requirements.

What This Bill Does

It adds a new income tax credit, the Back to Work Tax Credit of 2010, for qualifying employers who hire newly hired full-time employees who are currently receiving unemployment benefits. The credit amounts are $500, $1,000, or $1,500 per employee, depending on the employee's wage rate. Employers must obtain certification from the Alabama Department of Industrial Relations, ensure the employee meets eligibility requirements, and keep the employee employed in Alabama for at least six consecutive months, with the eligibility date being the six-month mark. The program applies to hires between the act’s effective date and July 1, 2011, and credits can be claimed against the Alabama income tax or financial institution excise tax, but credits are nonrefundable and subject to a net employment increase cap.

Who It Affects

• Qualifying employers: may receive a tax credit for each qualified employee they hire who meets all criteria (full-time, unemployment benefits, six-month employment, wage thresholds, and certification).
• Qualified employees: newly hired, full-time workers who are currently on Alabama unemployment benefits for at least three consecutive weeks as of their employment date and who are retained for six months.
• Owners of certain entities (S or K corporations, and disregarded entities): may receive the credit on a pro rata basis if they own a qualifying employer.

Key Provisions

• Creates 40-18-136.1, the Back to Work Tax Credit of 2010.
• Credit amounts: $500 per employee at $10.55–< $15/hour; $1,000 per employee at $15–< $20/hour; $1,500 per employee at $20/hour or more.
• Qualified employee: newly hired, full-time, on Alabama unemployment benefits for at least three consecutive weeks as of the employment date, and employment date before July 1, 2011.
• Qualifying employer: hires after the act’s effective date and before July 1, 2011; did not employ the employee in the prior six months; is current in unemployment tax filings; employs the employee in Alabama for at least six consecutive months and at least the required wage; reports the employee under The New Hire Act of 1997.
• Certification: employer must apply for and receive certification from the Alabama Department of Industrial Relations that the employee meets eligibility and the employer is qualifying.
• Eligibility date: the date the employee completes six consecutive months of employment.
• Credit claim: can be used against Alabama income tax or financial institution excise tax for the year including the eligibility date; not refundable or transferable; pro rata to certain entity owners.
• Net employment cap: credit amount is limited to the net increase in full-time employees over a base of employees reported on Dec 31, 2009, with final numbers calculated quarterly and requiring increases equal to one additional eligible employee per qualified employee.

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