This page is intended to provide helpful resources as you navigate and determine if the child care tax credit applies to you or your business. Explore the resources and information below.

The Alabama Child Care Tax Credit law is a comprehensive framework for incentivizing investments in child care infrastructure and services through tax credits and grants.  This law was passed in the 2024 Regular Session of the Alabama legislature on May 7, 2024, and signed into law by Governor Kay Ivey on May 9, 2024 as part of a broader package of workforce initiatives.

The law aims to create a robust system of financial incentives to support the expansion, improvement, and operation of child care facilities in Alabama, particularly targeting underserved areas and working families. Through a combination of tax credits and grants, it seeks to enhance child care accessibility and quality, thereby promoting workforce participation and the overall welfare of the community.

 

 

Rulemaking is the practice through which state agencies make the procedural rules of the law so that interested members of the public can participate by providing comments, information and/or data to the agency.

The Alabama Department of Revenue has announced the public comment period for the proposed rules under the CCTC law. Here are the key details:
  • Rules Publication Date: November 27, 2024 (published in the Alabama Administrative Monthly)
  • Comment Period Start: November 27, 2024
  • Comment Period End: January 7, 2025 (closes at the end of the public hearing)
  • Public Hearing Date: January 7, 2025

 

How to Participate:
The public is encouraged to submit written comments on the proposed rules at any time during the comment period. Comments may be submitted by:
  • Mail: Addressed to Cameran Clark, Secretary, Alabama Department of Revenue, Room 4131, Gordon Persons Building, 50 N. Ripley Street, Montgomery, AL 36132
  • Email: taxpolicy@revenue.alabama.gov

 

Public Hearing
The January 7 hearing will be conducted via web conference. To attend, email taxpolicy@revenue.alabama.gov after the rules are published on November 27 to request sign-in details.
We encourage all interested stakeholders to review the proposed rules and make their voices heard during this 40-day comment period.
Read the Proposed Rules Here

Childcare Tax Credit Webinar: EMPLOYER FOCUS

Register using the link below to join us on 12/4/24

This informative session will focus on the business and employer tax credit portion of the legislation, detailing what you need to know and answering any questions you may have. Join us on Wednesday, December 4 at 2:00 PM for a webinar on the new Child Care Tax Credit, effective Jan 1, 2025. Susan Kennedy will deliver an in-depth overview of the employer-related provisions, and representatives from the Alabama Department of Revenue will be on hand to answer questions.

A later webinar will be hosted for child care providers, so stay tuned for more information. We are proud to host this webinar alongside our partners Manufacture Alabama, the Business Council of Alabama, and the National Federation of Independent Businesses. Don’t miss this opportunity—register at the link below!

Click Here to Register for the EMPLOYER Webinar

In 2022, nearly 85,000 hardworking Alabama families needed access to child care but had no quality options in the communities where they live. This represents 40% of children under age 6 who may need childcare but whose families cannot reasonably access it.

OVERVIEW

BACKGROUND ON THE TAX CREDITS

The 2024 Child Care Tax Credit law is a comprehensive framework for incentivizing investments in child care infrastructure and services through tax credits and grants.

Overall, the law aims to create a robust system of financial incentives to support the expansion, improvement, and operation of child care facilities in Alabama, particularly targeting underserved areas and working families. Through a combination of tax credits and grants, it seeks to enhance child care accessibility and quality, thereby promoting workforce participation and the overall welfare of the community.

OVERVIEW

LEGISLATION

Child Care Tax Credit Bill

The new law contains two tax credits: a tax credit for employers to expand access to child care for employees and a tax credit for child care programs (facilities that participate in Alabama Quality Stars that serve children whose care is paid for with a subsidy). The Act also includes a grant program for nonprofit child care programs.

LEGISLATIVE LANGUAGE

RESOURCES AND INFORMATION

Learn More about the Child Care Tax Credit

More Details and Information Below

Department of Human Resources

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Department of Revenue - Employer Tax Credit Info

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Department of Revenue - Facility Tax Credit Info

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"I had never heard of the "Motherhood Penalty" - where women's pay decreases once they become mothers - until I became a mother myself. My penalty came in the form of a difficult decision during the happiest moment of our lives. Due to the increasing costs and decreasing availability of child care, I was forced to decide between keeping a job I love and caring for my child. Thankfully, my support system afforded my family the opportunity to make this choice. Alabama families need more affordable quality options for child care and we need them now."

Emily Cook

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