SB86 Summary

• Establishes the "Portable Benefits Act" allowing independent contractors to open portable benefit accounts administered by banks, investment firms, or technology providers to fund health, income replacement, life insurance, or retirement benefits.

• Permits hiring parties and other entities to contribute funds to independent contractor portable benefit accounts as compensation without creating an employment relationship or triggering workers' compensation liability.

• Allows contributions to portable benefit accounts using withheld compensation only if both parties agree in writing with clear terms, the independent contractor voluntarily opts in, and the contractor can opt out at any time.

• Provides 100 percent tax deductions for hiring parties contributing their own funds to portable benefit accounts as a business expense on Alabama income tax returns beginning in tax years after December 31, 2025.

• Allows qualifying independent contractors to deduct 100 percent of hiring party contributions and their own contributions to portable benefit accounts as an adjustment to income on Alabama individual income tax returns for tax years beginning after December 31, 2025.