Credits Against State Income Tax Liability.

Ala. Code tit. 40, ch. 18, art. 4B

in effect

Ala. Code § 40-18-135 Definitions.

40-18-135. Definitions. The following definitions apply to this article: (1) APPROVED BASIC SKILLS EDUCATION PROGRAM. A basic skills education program that has received written approval from the Alabama Department of Education pursuant to this article. (2) BASIC SKILLS EDUCATION PROGRAM. An approved employer provided or employer sponsored education program that enhances basic skills of employees up to and including the twelfth grade functional level. (3) COSTS OF EDUCATION. Direct instructional expenses incurred for or relating to instructors, materials, or equipment used in the qualifying program, or for supplies, textbooks, or salaries, including compensation paid to employees while participating in an approved basic skills education program. (4) EMPLOYEE. An individual resident of Alabama who is employed for at least 24 hours per week by the employer seeking the tax credit and who has been continuously employed for at least 16 weeks. (5) EMPLOYER. An individual or corporate business, including, but not limited to, a subchapter “S” corporation, that is subject to the state income tax. (6) EMPLOYER PROVIDED. An approved basic skills education program offered by the employer on the premises of the employer or on premises approved by the Alabama Department of Education. (7) EMPLOYER SPONSORED. A contractual arrangement with a school, college, university, adult basic skills education program, or other approved provider that offers an approved basic skills education program that is paid for by the employer. (Acts 1993, 1st Ex. Sess., No. 93-907, p. 204, §1.)

Ala. Code § 40-18-136 Credit to Employer.

40-18-136. Credit to Employer. Beginning with tax year 1993, a tax credit of 20 percent of the actual costs of education shall be provided to an employer who provides or sponsors an approved basic skills education program pursuant to this article. (Acts 1993, 1st Ex. Sess., No. 93-907, p. 204, §2.)

Ala. Code § 40-18-137 Credit Limited to Income Tax Liability.

40-18-137. Credit Limited to Income Tax Liability. The tax credit available to an employer pursuant to this article shall be limited to the amount of the employer’s income tax liability for the taxable year as computed without regard to this article. (Acts 1993, 1st Ex. Sess., No. 93-907, p. 204, §3.)

Ala. Code § 40-18-138 Rules Regarding Procedures for Approving Education Programs.

40-18-138. Rules Regarding Procedures for Approving Education Programs. The Alabama Department of Education shall promulgate and adopt rules regarding the methods, procedures, and standards it deems necessary for approving employer provided or employer sponsored basic skills education programs. The Department of Education shall include in its rules and regulations a means to determine and set for each individual the maximum number of months that said individual may be eligible for the education program provided herein. (Acts 1993, 1st Ex. Sess., No. 93-907, p. 204, §4.)

Ala. Code § 40-18-139 Reimbursement to Employer.

40-18-139. Reimbursement to Employer. No tax credit shall be granted pursuant to this article to any employer of an employee participating in a basic skills education program if the employer receives or requires reimbursement or any form of remuneration for any cost of the education. (Acts 1993, 1st Ex. Sess., No. 93-907, p. 204, §5.)

Source: Alabama Legislature (alison.legislature.state.al.us)URL: https://alison.legislature.state.al.us/code-of-alabamaFetched: 10/20/2026