SB250 Alabama 2024 Session

Summary

Primary Sponsor

Chris ElliottSenator

Republican

Session

Regular Session 2024

Title

Establishes the Alabama Workforce Housing Tax Credit Act; creates the Alabama Workforce Housing Tax Credit

Summary

SB250 creates the Alabama Workforce Housing Tax Credit Act to provide a state tax credit for qualified investors in workforce housing projects in Alabama.

What This Bill Does

The bill authorizes a nonrefundable Alabama income tax credit for qualified taxpayers who own an interest in a qualified workforce housing project, to be claimed over a 10-year period. Each project can receive up to $2,000,000 in credits per year, with an annual award cycle cap funded by $5,000,000 per year (plus carryforwards and adjustments); unused credits may be carried forward five years. The Alabama Housing Finance Authority administers the program, issues eligibility certificates, and prioritizes rural projects (20-25% of the cycle cap) alongside four percent qualified projects, while aligning with federal LIHTC rules; the act also restricts applying for federal LIHTC after September 30, 2027, and credit eligibility begins for tax years starting January 1, 2025.

Who It Affects

• Qualified taxpayers (individuals, corporations, partnerships, and other owners) who have an interest in a qualified workforce housing project, who can claim the credits against Alabama tax liability for up to 10 years and may allocate credits through pass-through entities to partners or shareholders.
• Insurance companies and certain financial institutions, which may use the credits to offset Alabama taxes (including retaliatory taxes), subject to the nonrefundable nature of the credit and related limitations.

Key Provisions

• Establishes the Alabama Workforce Housing Tax Credit Act and defines terms such as qualified project, qualified taxpayer, award, and award cycle.
• Maximum annual credit per project is $2,000,000, with credits awarded over a 10-year period and subject to an annual award cycle cap (initially $5,000,000 per year) plus carryforwards and recapture adjustments.
• A portion of each award cycle cap (20-25%) must be allocated to qualified rural projects designated by the Alabama Housing Finance Authority; the remainder goes to four percent qualified projects.
• Credits are nonrefundable but may be carried forward for five years; credits may be allocated to pass-through entities and reassigned among partners or members as allowed, with attribution to the owner claiming the credit.
• Recapture provisions require the taxpayer to recapture a proportionate amount of workforce credits if corresponding federal LIHTC are recaptured or disallowed, increasing the taxpayer’s Alabama tax liability accordingly.
• Awards are contingent on an eligibility certificate issued by the Authority, which confirms final project eligibility and annual credit amounts.
• The Authority may issue guidelines and adopt qualified allocation plans, prioritizing after-school childcare commitments or subsidized after-school care for children at the project.
• Credits are not available to projects that submit applications for federal LIHTC after September 30, 2027; the act becomes effective October 1, 2024, with credits applicable to tax years beginning January 1, 2025.
• The program includes alignment with federal LIHTC provisions and requires the Authority to administer the program and implement rules consistent with federal law.
• Certain interactions with the Department of Revenue and the Authority are described for administration, reporting, and eligibility certification purposes.

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 & Revenue