SB290 Alabama 2025 Session

Summary

Primary Sponsor

Gerald H. AllenSenator

Republican

Session

2025 Regular Session

Title

Income tax, tax credit for voluntary cash contributions to pregnancy center or residential maternity facility

Summary

The Pregnancy Resource Act would create a state income tax credit for voluntary cash contributions to eligible pregnancy centers or residential maternity facilities.

What This Bill Does

Allows individuals and businesses to claim a credit against Alabama income tax for voluntary cash contributions to eligible pregnancy centers or residential maternity facilities. The credit is 50% of the taxpayer’s state tax liability, with a $10 million annual cap on total credits and a limit that no more than 50% of credits can go to a single organization; unused credits may be carried forward for five years and credits cannot be transferred or deducted. Eligible organizations must certify eligibility and meet criteria (501(c)(3), Alabama nonprofit, dedicated client services, in-state presence, and no abortion coverage), and the Department of Revenue will verify eligibility, allocate credits, and maintain a public list of eligible organizations. The program becomes effective Oct 1, 2024, with credits available for the 2026–2030 tax years (subject to extension).

Who It Affects

• Individual taxpayers who make qualifying cash contributions to eligible pregnancy centers or residential maternity facilities can claim a credit against their Alabama income tax (with rules for joint vs. separate returns).
• Business taxpayers (corporations, LLCs, partnerships, or sole proprietorships) that make qualifying cash contributions can claim the credit against Alabama income tax; pass-through entities must allocate credits to their owners or partners as specified.

Key Provisions

• Eligible charitable organization criteria: must be a 501(c)(3) organization, an Alabama nonprofit, operate as a pregnancy center or residential maternity facility, provide services at no cost to clients, have a dedicated client phone number, maintain a primary Alabama office open at least 20 hours per week, serve women to carry pregnancy to term and promote parenting/adoption, and use trained medical professionals for available procedures.
• Credit amount and limits: credits equal 50% of the taxpayer’s Alabama income tax liability; annual aggregate cap of $10,000,000; no more than 50% of total credits for a calendar year may go to a single organization; unused credits may be carried forward for five years; credits are not transferable and cannot be used as a deduction.
• Certifications and reporting: eligible organizations must certify their status and readiness to meet criteria; taxpayers must report the organization’s name and contribution amount to the Department; the Department reviews certifications and maintains a public list of eligible organizations.
• Allocation and timing: the Department allocates credits within 30 days after receiving an application; if the full certified amount cannot be allocated due to the cap, the department informs the applicant of the allocated amount; if the contributed amount is not made within 90 days of allocation, the allocation is canceled and returned for reallocation; credits may be adjusted if actual contributions differ from estimates.
• Pass-through entities: credits earned by partnerships, LLCs, S corporations, or similar entities are allocated among partners, members, or shareholders according to ownership or mutual agreement.
• Effective dates: the act becomes effective October 1, 2024; the credits are effective January 1, 2026 for the 2026 tax year and continue through the 2030 tax year unless extended.

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