Alabama lawmakers approve tax breaks for businesses that help employees afford child care
MONTGOMERY, Ala. — Alabama lawmakers gave final approval Tuesday to legislation to provide tax breaks to companies that help their employees pay for child care.
The Alabama Senate voted 31-0 in favor of the bill, which now goes to Governor Kay Ivey for his signature. Advocates said child care costs are a barrier for many parents considering returning to the workforce. House Minority Leader Anthony Daniels said the goal is to help families afford child care and help businesses struggling to find workers.
βIt gets workers back to work,β Republican Sen. Garlan Gudger of Cullman said during the Senate debate.
The bill would set aside $15 million in tax credits that can be claimed by companies that offer child care benefits, on-site child care or reserved spots at licensed facilities. The tax credit program would begin in 2025 and end on December 31, 2027. After evaluating the cost and effectiveness of the program, lawmakers could choose to extend the tax credit.
The proposal would also provide tax breaks and subsidies to providers, with incentives aimed at increasing the availability of care and improving quality.
The legislation would provide up to $25,000 in annual tax credits for child care providers who participate in the Department of Human Resources’ Quality Rating Improvement System, which provides ratings to programs that meet defined program standards. That part of the program would cost up to $5 million a year.
It would also provide $5 million in grants that nonprofits, including church facilities, could try to help improve quality or expand capacity.