HB142 Summary

• Establishes portable benefit accounts for independent contractors in Alabama, administered by banks, investment firms, or technology providers to fund health, income replacement, life insurance, or retirement benefits.

• Allows any person or entity, including gig economy platforms, to contribute funds to portable benefit accounts as compensation without affecting the worker's employment classification.

• Permits contributions to be funded through hiring party funds or voluntary opt-in withholding from contractor compensation, requiring written agreement that is clear, unambiguous, and prominently displayed.

• Allows hiring parties to deduct 100 percent of their own contributions to portable benefit accounts as business expenses on Alabama income tax returns.

• Allows independent contractors to deduct 100 percent of both employer contributions and their own contributions to portable benefit accounts as adjustments to income on Alabama individual income tax returns.

• Takes effect October 1, 2025.