active State Tax credit

Alabama Jobs Act — Jobs Credit and Investment Credit

Alabama Department of Commerce / Alabama Department of Revenue

Up to 3-4% payroll + 1.5% investment

Visit official program ↗ See if you qualify — free

The short version

Alabama jobs + investment incentive

The Alabama Jobs Act (Code of Alabama 1975, §§ 40-18-370 through 40-18-383) provides two discretionary, project-based incentives to companies creating jobs and making capital investment in Alabama. The Jobs Credit is an annual cash refund of up to 3% of the prior year's gross payroll for new Alabama employees, rising to up to 4% for projects in targeted or jumpstart counties, for underrepresented companies, technology companies, or biomedical/R&D companies, available for up to 10 years. The Investment Credit is a credit of up to 1.5% of qualified capital investment per year for up to 10 years (15 in targeted/jumpstart counties or for underrepresented companies), usable against Alabama income tax, financial institution excise tax, insurance premium tax, and certain utility taxes — and it can be transferred or sold at 85% or more of face value for the first three years. Projects must be approved in advance by the Alabama Department of Commerce.

Funding type: Tax credit
Level: State
Amount range: Up to 3-4% payroll + 1.5% investment
Realistic amount: Benefit scales with project payroll and capital. A project creating $3 million of new annual…
Deadline: Relationship-based — projects are negotiated and approved in advance by the Alabama Department of Commerce (in consultation with the Governor) before commencement; no fixed public application window.
Status: active
States: Alabama
Payment model: tax-credit-offset

Who qualifies

Company must be approved by the Alabama Department of Commerce for a qualifying project (incentives are discretionary)
Project must create new jobs and/or qualifying capital investment in Alabama
Jobs Credit (up to 3%, or up to 4% in targeted/jumpstart counties or for underrepresented/technology/biomedical-R&D companies) applies to gross payroll of eligible new Alabama employees
Investment Credit (up to 1.5%/year) applies to qualified capital investment; up to 10 years standard, 15 years in targeted/jumpstart counties or for underrepresented companies
Project agreement must be in place before the project commences
Certain industries/activities are excluded under the statute

What it covers

Eligible expenses

Gross payroll/wages of eligible new Alabama employees (basis for the Jobs Credit)
Qualified capital investment in the project — land, buildings, machinery, equipment (basis for the Investment Credit)

Ineligible expenses

Payroll for jobs not part of the approved project
Capital investment outside the approved project scope
Activities in statutorily excluded industries

How to apply

1

Engage the Alabama Department of Commerce

Contact the Alabama Department of Commerce (incentives@commerce.alabama.gov) early, before committing to the project, to discuss the proposed jobs and capital investment and gauge incentive eligibility.

~8 hrs
2

Negotiate and execute a project agreement

Work with Commerce to define the project's job and investment commitments, credit rates and term, and county/company classifications. The discretionary project agreement must be approved in consultation with the Governor.

~30 hrs
3

Commence the project and create jobs/investment

Begin the approved project, hire the committed new Alabama employees, and make the qualifying capital investment, tracking payroll and investment against the agreement.

~12 hrs
4

Claim the credits annually

Each year, claim the cash Jobs Credit refund and the Investment Credit (against income, FIET, insurance premium, or utility taxes) for the term of the agreement; transfer/sell the Investment Credit if desired within the first three years.

~10 hrs

Insider tip

Engage the Alabama Department of Commerce BEFORE you announce or break ground — the incentives are discretionary and the project agreement must be approved before the project commences, so early-stage negotiation is where the rates (3% vs 4%, 10 vs 15 years) are won. Siting in a targeted or jumpstart county, or qualifying as a technology or biomedical/R&D company, unlocks the higher 4% Jobs Credit and the 15-year Investment Credit term. The Investment Credit's transferability (sellable at 85%+ of face for the first three years) is valuable for companies with limited early Alabama tax liability.

Deadline & timing

There is no open application form. A company works with the Alabama Department of Commerce to negotiate a project agreement (the incentives are discretionary), which must be approved before the project commences. Credits are then claimed annually for the term of the agreement.

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Last reviewed 2026. GrantCompass is an independent funding-discovery tool and is not affiliated with any government agency. Always confirm details on the official program page.