Alabama HB 390: Relating to workforce development, to extend the employer tax credit to include adult daycare.

Bill Text

HB390 INTRODUCED
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HB390
11YTALL-1
By Representative Daniels
RFD: Ways and Means Education
First Read: 05-Feb-26
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11YTALL-1 12/10/2025 TEW (F)TEW 2025-3509
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First Read: 05-Feb-26
SYNOPSIS:
Current law provides for an employer tax credit
for certain expenses incurred by an employer to support
the provision of child care for children of employees.
This bill would allow expenses for adult day
care services to be included in this tax credit
program.
A BILL
TO BE ENTITLED
AN ACT
Relating to income taxes; to extend the current
employer tax credit to include adult day care services.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 40-18-541 and 40-18-542, Code of
Alabama 1975, are amended as follows:
"§40-18-541
For the purposes of this article, the following terms
have the following meanings:
(1) ADULT DAY CARE FACILITY. A facility that provides a
program of care for a portion of a 24-hour day in a protective
setting for eligible adults 18 years of age and older.
(2) ADULT DAY CARE PROVIDER. An Alabama taxpayer that
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(2) ADULT DAY CARE PROVIDER. An Alabama taxpayer that
owns an adult day care facility or a nonprofit entity that
owns and operates an adult daycare facility in this state.
(1)(3) APPLICABLE TAXES. An employer's, taxpayer's,
adult day care provider's or child care provider's, or in the
case of a pass-through entity that is an employer, taxpayer,
adult day care provider, or child care provider, such
employer's, taxpayer's, adult day care provider's or child
care provider's owners' taxes as follows:
a. Taxes levied in Chapter 18 of Title 40.
b. The state portion of taxes levied in Chapter 16 of
Title 40.
c. Taxes levied in Section 27-4A-3(a).
d. Taxes levied in Article 2 of Chapter 21 of Title 40,
not to include the freight line and equipment tax levied in
Section 40-21-52.
(2)(4) CHILD or CHILDREN. Individuals who are five
years of age or less.
(3)(5) CHILD CARE FACILITY. A facility meeting the
definition found in Section 38-7-2(7), which is licensed by
the Department of Human Resources and is participating in the
quality rating and improvement system.
(4)(6) CHILD CARE PROVIDER. An Alabama taxpayer that
owns a child care facility or a nonprofit entity that owns and
operates a child care facility in this state.
(7) ELIGIBLE ADULT. Any individual that meets all of
the following conditions:
a. A dependent of an employee.
b. Is eighteen years of age or older.
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b. Is eighteen years of age or older.
c. Due to age, disability, cognitive impairment,
chronic health condition, or the need for supervision,
requires support or services that can be appropriately
provided in an adult day care setting.
(5)(8) ELIGIBLE CHILD or ELIGIBLE CHILDREN. Children
who participate in the Child Care Subsidy Program administered
by the Department of Human Resources and who attend a child
care facility operated by a child care provider.
(6)(9) ELIGIBLE EXPENSES. a. Expenses incurred by an
employer for:
1. The construction, renovation, expansion, or repair
of a child care facility, or for the purchase of equipment for
such facility, or for the maintenance and operation thereof.
2. Payments made to child care facilities or employees
for the provision of child care at child care facilities for
children of employees.
3. Payments made to child care facilities to reserve
services for children of employees.
4. Payments made to adult day care providers or
employees for the provision of adult day care at adult day
care facilities for dependent adults of employees.
5. Payments made to adult day care facilities to
reserve services for dependent adults of employees.
b. For purposes of this definition, "child care
facility" or "child care facilities" shall also include a
facility meeting the definition found in Section 38-7-2(7),
which is operated, directly or indirectly, by a public
institution of higher education as defined in Section 16-5-1.
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institution of higher education as defined in Section 16-5-1.
(7)(10) EMPLOYEE. A resident of this state who works on
a full-time or part-time basis for an employer. An employee
shall include independent contractors engaged by an employer
and the owners of an employer that also work for such employer
on a full-time or part-time basis. Employees whose wages,
excluding any overtime or bonuses, exceed eighty thousand
dollars ($80,000) in a calendar year are not employees for the
purposes of this article.
(8)(11) EMPLOYER. A for -profit business lawfully
operating in this state.
(9)(12) EMPLOYER TAX CREDIT. A tax credit to be applied
against applicable taxes for the year in which the eligible
expenses are incurred by an employer, equal to the total
eligible ex