Growing Alabama Credit

Section 40-18-413 of the Code of Alabama 1975 provides for a tax credit to Alabama income taxpayers who make contributions to Economic Development Organizations (EDO) for approved qualifying projects. Taxpayers donating to EDOs for approved projects receive an Alabama income tax credit equal to their donation.

The Alabama Department of Commerce is the administering agency for the Growing Alabama Credit. All inquiries regarding eligibility and qualifications for prospective projects should be addressed to incentives@commerce.alabama.gov or 334-242-0400.  For additional information on the credit, please click here.

Provisions of the Growing Alabama Credit include:

• The credit is equal to 100% of the donating taxpayer’s contributions (up to the reserved amount) to the EDO during the taxable year for which the credit is claimed and may offset up to 50% of the taxpayer’s income tax liability.
• The credit is only available to an individual or a corporate entity making the donation. The credit will not pass through to owners of a pass-through entity.
• The credit cannot be transferred or assigned but may be carried forward for 5 years.
• The Growing Alabama Credit may not be claimed for any contribution for which a separate itemized deduction is claimed.
• The EDO must confirm that the donation has been received, the project has been funded, and the project will be undertaken by the EDO before the donor is eligible for the credit.

Additional provisions include:

• A taxpayer must reserve the Growing Alabama Credit using the department’s online portal – My Alabama Taxes (MAT).
• Reservations to qualifying EDO projects are allowed only when an available project has been approved by the Alabama Renewal Commission and the Growing Alabama Funding Agreement has been executed.