Current Alabama status
Alabama does not have a verified statewide Tri-Share program. Alabama employers may explore the enacted Act 2024-303 Employer Tax Credit: for qualifying, documented child-care expenses, the credit is 100% for employers with fewer than 25 employees or 75% for other employers, subject to a $600,000 annual employer limit, the 2026 statewide cap, reservation, ALDOR review and approval. Separately, eligible employers may consider the federal Section 45F credit for qualifying expenses; eligibility, limits and interaction with other tax benefits must be confirmed with ALDOR and a tax professional.
Verified programs and resources
Alabama Employer Tax Credit (Act 2024-303)
active for 2025-2027; 100% of eligible expenses for employers with fewer than 25 employees and 75% for other employers, each capped at $600,000 annually; 2026 statewide aggregate cap $17.5 million.
Alabama Childcare Facility Tax Credit
separate provider credit, active 2025-2027, up to $25,000 per facility based on Quality STARS rating and average monthly eligible children; 2026 aggregate cap $5 million.
Federal Section 45F employer-provided child-care credit
for qualifying 2026 expenditures, 40% (50% for an eligible small business) of qualified child-care expenditures plus 10% of qualified resource/referral expenditures, capped at $500,000 ($600,000 for eligible small businesses), claimed on Form 8882.
Alabama Employer Tax Credit
100% of eligible expenses for a small business (fewer than 25 employees) and 75% for an employer with 25 or more employees; maximum $600,000 per employer per year; annual aggregate cap $17.5 million in 2026.
Federal Section 45F
For qualifying 2026 expenditures, the IRS describes a 40% credit for qualified child-care expenditures, or 50% for an eligible small business, plus 10% for qualified resource-and-referral expenditures. Statutory caps, facility, licensing, employee-access, nondiscrimination, tax-liability and no-double-benefit rules apply.
Frequently asked questions
Alabama does not have a verified statewide Tri-Share program.
Section 45F is not automatic. The IRS says a taxpayer may be eligible only when it pays or incurs qualified child-care or resource-and-referral expenditures and meets the applicable facility, contract, licensing, employee-access, nondiscrimination, and other statutory requirements. Use Form 8882 to claim the credit and consult a tax professional for the employer’s actual arrangement.
State family-assistance and employer-incentive programs have their own enrollment, funding, provider, income, activity, tax, and documentation rules. Check the official agency links on this page before relying on a benefit or availability.
Official sources
Last Updated: September 27, 2026