SB405 Alabama 2010 Session

Summary

Primary Sponsor

Larry MeansMayor

Democrat

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

SB405 would create a 50% income tax deduction for Alabama employers who hire unemployed individuals or people whose unemployment benefits have expired, usable after 12 months of employment.

What This Bill Does

It establishes a 50% deduction of gross wages paid to each qualifying new hire. The employee’s unemployed status or expired benefits must be certified by the local employment agency. The deduction can be claimed in a single tax year and only after the employee has continuously worked for 12 months, and it reduces the Alabama state income tax without being refundable or transferable. Owners of qualified employers taxed as S- or K-corporations can claim the deduction pro rata, and the Department of Revenue can adopt rules to implement the act; the act is effective for tax years beginning January 1, 2010.

Who It Affects

• Alabama employers that hire individuals who are unemployed or whose unemployment benefits have expired; these employers would be eligible for a 50% deduction of the wages paid to those employees after 12 months of continuous employment.
• Owners of qualified employers that are S- or K-corporations; they can claim the deduction on a pro rata basis.
• Local employment agencies and the Department of Revenue involved in certifying unemployment status and implementing the rules.

Key Provisions

• Establishes an Alabama income tax deduction equal to 50% of gross wages paid to each qualifying new hire who was unemployed or whose unemployment benefits had expired at hire.
• Employee unemployment status must be certified by the local employment agency.
• Deduction may be claimed in a single tax year and only after the employee has been continuously employed for 12 months; deduction applies against the Alabama income tax and is not refundable or transferable.
• Deduction available on a pro rata basis to owners of qualified employers taxed under Subchapters S or K of the Internal Revenue Code.
• The Department of Revenue may adopt rules and regulations to implement the act; the act becomes effective for tax years beginning on or after January 1, 2010; all conflicting laws are repealed.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation