House Bill 390 Alabama 2026 Session

Summary

Primary Sponsor

Anthony DanielsRepresentative

Democrat

Session

2026 Regular Session

Title

Relating to workforce development, to extend the employer tax credit to include adult daycare.

Summary

HB390 would extend Alabama's employer tax credit to cover adult day care expenses for employees' dependent adults, expanding support for both child care and adult day care providers.

What This Bill Does

It adds adult day care expenses to the existing employer tax credit, allowing credits for both child care for employees' children and adult day care for dependents. The credit is 75% of eligible expenses, or 100% for small businesses, up to specific caps. There are annual aggregate credit limits ($15M in 2025, $17.5M in 2026, $20M in 2027) and per-employer and per-facility caps ($600,000 per employer; $25,000 per child care facility). Credits are awarded after required documentation is submitted and verified, with an effective date of January 1, 2027.

Who It Affects

• Employers in Alabama (including small businesses and pass-through entities) that incur eligible expenses to provide or reserve child care for employees' children or adult day care for employees' dependent adults; they could claim a state tax credit for those expenses.
• Child care facilities and adult day care providers (including nonprofit providers and facilities operated by public colleges/universities) that offer services to employees' children or dependents; they may receive eligible expense payments and may be affected by a related DoHR grant program, subject to licensing and quality standards.

Key Provisions

• Extends the employer tax credit to include adult day care expenses in addition to child care expenses for employees' children.
• Defines terms for adult day care facilities/providers, eligible adults, and eligible expenses, and includes public higher-ed facilities as child care facilities.
• Credits: 75% of eligible expenses, with 100% for small businesses.
• Caps: up to $600,000 per employer per year; up to $25,000 per year per child care facility.
• Aggregate annual credit limits: $15,000,000 (2025), $17,500,000 (2026), $20,000,000 (2027).
• Documentation requirements: standardized certificate, substantiation of eligible expenses, and ownership information for pass-through entities.
• Award process: Department of Revenue issues credits after documentation; failure to provide required documentation results in automatic denial.
• Effective date: January 1, 2027.

AI-generated summary using openai/gpt-5-nano on Feb 12, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation & Revenue