AL SB424

Taxpayers who employ student workers under age 19 enrolled in school to work during school breaks, after school, weekends, summer, or official holidays are allowed an income tax credit if the student is retained for at least nine months.

Income tax credit equals wages paid to the student worker during the taxable year, with a maximum of $2,500 per student worker per year, claimed in the year the nine-month period ends and the following year.

Credit cannot exceed 50 percent of the tax imposed for the taxable year reduced by all other allowable credits; unused portions may be carried forward for five years.

Credit is available only for businesses and employees in designated areas: 8A Business, Empowerment Zone, HUB Zones, I-65 Corridor, Renewal Community, Tax Incremental Financial Zones, and Enterprise Zone.

Tax credit becomes effective January 1, 2011, for the 2011 taxable year and subsequent years; the act takes effect immediately upon passage and gubernatorial approval.