Alabama House approves state income tax credit for small businesses

Alabama House approves state income tax credit for small businesses
The Alabama House of Representatives on Tuesday approved new legislation sponsored by State Rep. Kyle South, R – Fayette, that would provide a state income tax credit to small businesses for each new employee they hire. The bill is included in the House Republican Caucus’s “Right for Alabama” legislative agenda that was announced prior to the session’s start, according to a release from the office of House Speaker Mike Hubbard. “Over the last 20 years, small businesses have created more than 65 percent of all new jobs in our nation, but Alabama and other states have focused almost exclusively on providing incentives to industries and large employers,” South said. “By passing my bill, the Legislature can send the strong message that we care about small business owners and employees and understand and value the important role they play in Alabama’s economy.” Under the new legislation, small businesses with 75 employees or less will be able to claim a $1,500 tax credit for each qualified, new, full-time employee hired. The business may also claim an additional $1,000 tax credit if the new employee is an unemployed veteran recently returned from deployment. This credit comes as part of the Heroes for Hire Act passed by the legislature in 2012. To qualify for the credit, businesses must retain the new employee for a consecutive 12-month period, and the employee must earn a salary of $40,000 a year or more. The employee must also be an Alabama resident in order to ensure that the credits are being used on behalf of Alabamians. South said the state can now offer these credits with little or no loss of state budget dollars because the income taxes that these previously unemployed workers will begin to pay will offset the cost of providing the tax credit. “Through whichever prism you view it, this bill is a win for small business owners, it’s a win for the newly-hired and their families, and it’s a win for the state,” South said. To view the original article from the Birmingham Business Journal, click here.
Share

Get Atlas Updates

Sign up to be notified when new features are added to the Atlas Alabama site.