SB197 Alabama 2022 Session

Summary

Primary Sponsor

Bobby D. SingletonSenator

Democrat

Co-Sponsors

Linda Coleman-MadisonVivian Davis FiguresMalika Sanders-Fortier

Session

Regular Session 2022

Title

Taxation, tax credits, Alabama employers provided a tax credit for employees eligible under the federal Work Opportunity Tax Credit Program

Summary

This bill would create a state tax credit for Alabama employers who hire workers eligible for the federal Work Opportunity Tax Credit, with credits up to $1,000 per employee.

What This Bill Does

It creates a non-refundable Alabama income tax and financial institution excise tax credit for employers who hire individuals in Work Opportunity Tax Credit target groups. The credit equals the federal WOTC amount claimed, up to $1,000 per eligible employee, and is available in the tax year when the employee completes 12 months of consecutive employment. The credit is applied against Alabama taxes, is not refundable or transferable, has a $10 million annual cap, and is distributed on a pro rata basis to owners of pass-through S or K corporations; rules may be adopted by the Department of Revenue, with the credit starting for tax years beginning January 1, 2023.

Who It Affects

• Alabama employers who hire individuals in WOTC target groups; they would be able to reduce their Alabama tax liability by a credit (up to $1,000 per eligible employee) in the year the employee completes 12 months of employment.
• Owners or members of qualified Alabama pass-through businesses taxed as S or K corporations; they would receive the credit pro rata based on their share of the entity.

Key Provisions

• Establishes a non-refundable Alabama income tax and financial institution excise tax credit for employers hiring WOTC-eligible workers, equal to the federal WOTC credit (up to $1,000 per employee) in the year the employee completes 12 months of employment.
• Sets a $10,000,000 per fiscal year cap, allows pro rata distribution to owners of S or K pass-through entities, authorizes Department of Revenue rulemaking, and specifies an effective start for tax years beginning January 1, 2023.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation