Sections 40-18-417 through Section 40-18-417.7, Code of Alabama 1975
Act 2021-2 provides a tax credit to eligible taxpayers who make contributions to Economic Development Organizations (EDO) for approved qualifying projects. Taxpayers donating to an EDO for approved projects receive a Growing Alabama Credit equal to their donation.
The Alabama Department of Commerce is the administering agency for the Growing Alabama Credit. All inquiries regarding eligibility and qualifications for prospective projects should be addressed to email@example.com or 334-242-0400.
Provisions of the Growing Alabama Credit include:
- The credit is equal to 100 percent of the donating taxpayer’s contribution (up to the reserved amount) to the EDO during the tax year for which the credit is claimed and may offset up to 50 percent of the donor’s tax liability. Financial institutions may use the credit to offset 50 percent of their state portion of the excise tax liability.
- The credit can be used to offset individual and corporate income taxes, the state portion of the financial institution excise tax, insurance premium tax, and state utility license tax.
- The credit may pass through to owners of a pass-through entity.
- The credit is only available to donating taxpayers and cannot be transferred or assigned but may be carried forward for five years.
- The Growing Alabama Credit may not be claimed for any contribution for which a separate itemized deduction is claimed.
Additional provisions include:
- Reservations to qualifying EDO projects are allowed only when an available project has been approved by the Alabama Renewal Commission, the Growing Alabama Funding Agreement has been executed, and the online project reservation has been opened by ALDOR.
- A donating taxpayer must reserve the Growing Alabama Credit online using My Alabama Taxes.
- Donors have 30 days from the date the online reservation for the project is opened in My Alabama Taxes to reserve the Growing Alabama Credit. Reservations are available on a first-come, first-served basis, and reservations will not be accepted once the 30-day reservation period has ended.
- The credit reservation grants the donor 21 calendar days from the date of online reservation to make the cash contribution to the EDO.
- Within 60 days after the project has been opened in My Alabama Taxes, the EDO must confirm that the donation has been received, the project has been funded, and the project will be undertaken by the EDO before the donor is entitled to the reserved credit.