AL HB285

Taxpayers who employ student workers under age 19 enrolled in school may claim an income tax credit for wages paid during school breaks, after school, weekends, summer, or official holidays, with a maximum credit of $2,500 per student per year.

Student workers must be retained as employees for at least nine months; taxpayers claim the credit in the year the nine-month period ends and the following year.

Credit is limited to 50 percent of the taxpayer's annual tax liability reduced by all other allowable credits, with unused portions carried forward for up to five succeeding years.

Credit applies only to businesses and employees located in designated areas: 8A Businesses, Empowerment Zones, HUB Zones, I-65 Corridor, Renewal Communities, Tax Incremental Financial Zones, and Enterprise Zones.

Credit becomes effective January 1, 2011 for the 2011 taxable year and thereafter; the act takes effect immediately upon passage and gubernatorial approval.