HB260 Alabama 2010 Session

Updated Feb 27, 2026

Notable

Summary

Primary Sponsor: Robert Bentley
Republican
Session: Regular Session 2010
Title: Income tax, employment, employers hiring persons receiving unemployment compensation or whose benefits have expired, tax deduction authorized, duties to Revenue Department, Reemployment Act
Summary: HB260 creates a state income tax deduction for Alabama employers who hire unemployed workers, offering a wage-based incentive to encourage job creation.
What This Bill Does
The bill authorizes an income tax deduction equal to up to 50% of gross wages for each eligible new hire who was drawing unemployment benefits or whose benefits had expired, with tiered limits by wage rate. The deduction can be claimed only in one tax year and only after the employee has been continuously employed for 12 months, and the employee's unemployment status must be certified by the local employment agency. The deduction is claimed against Alabama’s income tax, is not refundable or transferable, and is available on a pro rata basis to owners of qualified employers taxed as S or K corporations. There are wage and full-time requirements (no deduction for jobs paying below $10/hour or for part-time positions under 37.5 hours). The Department of Revenue may issue rules to implement the program, and the act becomes effective for tax years 2011 and 2012.

Who It Affects
Alabama employers that create new jobs for unemployed persons and meet the wage and employment conditions; they may claim a wage-based income tax deduction for eligible hires (with pro rata limits for pass-through owners).
Unemployed individuals who are hired by qualifying employers (those who were receiving unemployment benefits or whose benefits had expired) and certified by the local employment agency, whose wages qualify the employer for the deduction.

Key Provisions
Deduction equals 50% of gross wages for each eligible new hire, with tiered reductions: 50% for $14/hour or more, 40% for $12-$14, 35% for $10-$12, and none below $10/hour.
No deduction for jobs paying less than $10/hour or for part-time work under 37.5 hours per week.
One-year deduction window; the employee must be continuously employed for 12 months after hire to qualify the deduction.
Employee’s unemployment status must be certified by the local employment agency.
Deduction is nonrefundable, nontransferable, and claimed against Alabama income tax (Chapter 18, Title 40).
Pro rata availability to owners of qualified employers taxed under S or K subchapters of the Internal Revenue Code.
Department of Revenue may adopt rules to implement the act.
Effective for tax years beginning in 2011 and 2012.

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