SB43 Alabama 2023 Session

Summary

Primary Sponsor

Bobby D. SingletonSenator

Democrat

Session

Regular Session 2023

Title

Relating to tax credits; to provide a tax credit to Alabama employers for employees eligible under the federal Work Opportunity Tax Credit Program; and to allow for the adoption of rules.

Summary

SB43 would authorize Alabama employers to claim a state tax credit for employees eligible under the federal Work Opportunity Tax Credit, equal to the federal credit (up to $1,000 per employee), with a $10 million annual cap, starting in 2024.

What This Bill Does

Creates Alabama income tax credits and financial institution excise tax credits for employers who hire individuals in Work Opportunity Tax Credit target groups. The credit equals the federal WOTC credit claimed by the employer, up to $1,000 per employee, and becomes available in the tax year after the employee completes 12 consecutive months of employment. The credit can be used against Alabama taxes (Chapter 16 or Chapter 18) but cannot reduce tax liability below zero, is not refundable and not transferable, and can be allocated on a pro rata basis to owners or members of pass-through entities taxed as S or K corporations. The Department of Revenue may adopt rules to implement the act, and the credit is available for tax years starting in 2024; the act becomes effective the first day of the third month after passage.

Who It Affects

• Alabama employers that hire individuals in WOTC-targeted groups, because they can claim a state tax credit against their Alabama income tax or financial institution excise tax for each eligible employee.
• Owners or members of qualified Alabama business employers taxed as S or K corporations, because they can receive the credit pro rata based on their share of the business.

Key Provisions

• Establishes Alabama income tax credit and financial institution excise tax credit for hiring individuals in WOTC targeted groups.
• Credit equals the federal WOTC credit, up to $1,000 per eligible employee, and becomes available after 12 months of consecutive employment.
• Credits apply against Alabama taxes and are not refundable or transferable, with pro rata sharing for S/K pass-through owners.
• Cap of $10,000,000 per fiscal year for the tax credits.
• Effective for tax year beginning January 1, 2024; Department of Revenue may adopt rules; effective date is the first day of the third month after passage.

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