Alabama Creates Tax Credits for Businesses That Help Employees Afford Childcare

On April 9, 2024, Governor Kay Ivey signed Alabama Act 2024-303 into law. This act provides up to $15 million in Alabama tax credits for businesses that provide childcare assistance for eligible employees.

Because Alabama has a low workforce participation rate, this legislation was designed to help employees reenter the workforce by promoting access to affordable childcare.

Businesses can get a tax credit for:

• Providing on-site childcare
• Making payments to childcare facilities
• Making payments to employees for the provision of childcare

Businesses can receive up to $600,000 per year in tax credits to offset childcare for eligible employees (earning under $80,000 per year). The credits are available for 2025–2027 and will be re-evaluated at the end of 2027 for extension.

For more information about this legislation and how your company should respond, please contact your Warren Averett advisor directly.