Ala. Code § 40-18-543 — Application for Child Care Provider Facility Tax Credit; Documentation Requirements

(a) Effective for tax years beginning on or after January 1, 2025, and ending December 31, 2027, unless extended by an act of the Legislature, a child care provider may apply to the Department of Revenue for a facility tax credit to be applied against applicable taxes, in an amount equal to the average monthly number of eligible children, multiplied by a dollar amount which shall be based upon the quality rating of the child care facility as follows:
(1) Five star quality rating - two thousand dollars ($2,000) per eligible child.
(2) Four star quality rating - one thousand seven hundred fifty dollars ($1,750) per eligible child.
(3) Three star quality rating - one thousand five hundred dollars ($1,500) per eligible child.
(4) Two star quality rating - one thousand two hundred fifty dollars ($1,250) per eligible child.
(5) One star quality rating - one thousand dollars ($1,000) per eligible child.
(b) The facility tax credit is limited to an aggregate amount for all child care providers of five million dollars ($5,000,000) in a calendar year.
(c) The Department of Revenue shall:
(1) Provide a standardized format for, and require completion of, a certificate to be completed and signed by the child care provider applying for the facility tax credit, certifying each child care provider’s ownership of applicable child care facilities, the quality rating of each facility, and the average number of eligible children attending each facility monthly.
(2) Require the child care provider to provide documentation to substantiate to the satisfaction of the Department of Revenue the amount of the facility tax credit applied for pursuant to this section, the quality rating of each applicable child care facility, and the average number of eligible children attending each facility monthly.
(3) If the child care provider is a pass-through entity, require that the child care provider identify the identity and pro rata percentage ownership of its owners.
(d) The Department of Revenue shall award the facility tax credit to a child care provider after the child care provider provides the documentation required in subsection (c). Failure to provide the documentation required in subsection (c) shall result in the automatic denial of the child care facility tax credit.
(e) The Department of Human Resources and the Department of Revenue shall enter into a Memorandum of Understanding as to the information necessary to permit the Department of Revenue to effectively administer this section.