Ala. Code § 40-NEW

Current with legislation from 2024 effective through July 1, 2024.

Section 40-NEW - [Newly enacted section not yet numbered] [Effective 1/1/2025] Definitions

For the purposes of this article, the following terms have the following meanings:

(1) APPLICABLE TAXES. An employer's, taxpayer's, or childcare provider's, or in the case of a pass-through entity that is an employer, taxpayer, or childcare provider, such employer's, taxpayer's, or childcare provider's owners' taxes as follows:

a. Taxes levied in Chapter 18 of Title 40, Code of Alabama 1975.

b. The state portion of taxes levied in Chapter 16 of Title 40, Code of Alabama 1975.

c. Taxes levied in Section 27-4A-3(a), Code of Alabama 1975.

d. Taxes levied in Article 2 of Chapter 21 of Title 40, Code of Alabama 1975, not to include the freight line and equipment tax levied in Section 40-21-52, Code of Alabama 1975.

(2) CHILD or CHILDREN. Individuals who are five years of age or less.

(3) CHILDCARE FACILITY. A facility meeting the definition found in Section 38-7-2(7), Code of Alabama 1975, that is licensed by the Department of Human Resources and is participating in the quality rating and improvement system.

(4) CHILDCARE PROVIDER. An Alabama taxpayer that owns a childcare facility or a nonprofit entity that owns and operates a childcare facility in Alabama.

(5) ELIGIBLE CHILD or ELIGIBLE CHILDREN. Children who participate in the Child Care Subsidy Program administered by the Department of Human Resources and who attend a childcare facility operated by a childcare provider.

(6) ELIGIBLE EXPENSES. Expenses incurred by an employer for:

a. The construction, renovation, expansion, or repair of a childcare facility, or for the purchase of equipment for such facility, or for the maintenance and operation thereof.

b. Payments made to childcare facilities or employees for the provision of childcare at childcare facilities for children of employees.

c. Payments made to childcare facilities to reserve services for children of employees.

For purposes of this definition, "childcare facility" or "childcare facilities" shall also include a facility meeting the definition found in Section 38-7-2(7), Code of Alabama 1975, that is operated, directly or indirectly, by an organization defined in Section 16-5-1(1), Code of Alabama 1975.

(7) EMPLOYEE. A resident of this state who works on a full-time or part-time basis for an employer. An employee shall include independent contractors engaged by an employer and the owners of an employer that also work for such employer on a full-time or part-time basis. Employees whose wages, excluding any overtime or bonuses, exceeds eighty thousand dollars ($80,000) in a calendar year are not employees for the purposes of this act.

(8) EMPLOYER. A for profit business lawfully operating in this state.

(9) EMPLOYER TAX CREDIT. A tax credit to be applied against applicable taxes for the year in which the eligible expenses are incurred by an employer, equal to the total eligible expenses incurred by the employer, up to six hundred thousand dollars ($600,000) per year for each employer.

(10) FACILITY TAX CREDIT. A tax credit to be applied against applicable taxes, calculated in accordance with Section 4(a), but not exceeding twenty-five thousand dollars ($25,000) per year for each childcare facility.

(11) GRANT. A grant awarded by the Department of Human Resources to nonprofit childcare providers for the purpose of funding expenses related to the construction, expansion, improvement, repair, or operation of a childcare facility or childcare facilities, so long as such expenses are made in furtherance of the childcare services offered at such childcare facility and result in increased quality of care or increased capacity for children at each applicable childcare facility.

(12) OWNER. A shareholder, partner, or member of a pass-through entity.

(13) PASS-THROUGH ENTITY. An Alabama S corporation or a subchapter K entity.

(14) QUALITY RATING. The rating applicable to a childcare facility under the quality rating and improvement system.

(15) QUALITY RATING AND IMPROVEMENT SYSTEM. A system of the Department of Human Resources known as the Alabama Quality STARS program that measures the quality of childcare facilities on a scale of one to five stars, with five stars denoting the highest level of quality.

(16) RURAL AREA. Any Alabama county that meets the definition of "targeted county" found in Section 40-18-376.1(a)(2), Code of Alabama 1975.

(17) SMALL BUSINESS. An employer that has fewer than 25 employees.

(18) STATE. The State of Alabama.

Ala. Code § 40-NEW (1975)

Added by Act 2024-303,§ 2, eff. 1/1/2025.