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Helping Innovators Grow Roots

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Tax Credit Program

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Next Deadline

Thursday, Feb. 22 (notional)

Questions


About

To create a flourishing ecosystem in Alabama where tech accelerators and businesses thrive, Innovate Alabama offers tax incentives to help entrepreneurial support organizations do what they do best: provide the tools, resources and opportunities that help founders level up their companies.

The Innovate Alabama Act, found in Section 41 – 10-840, et seq., of the Code of Alabama, creates an incentive mechanism to provide funds to economic development organizations (EDOs) for certain qualifying activities. Alabama taxpayers who make cash contributions to EDOs for qualifying projects receive an Innovate Alabama Tax Credit that can offset up to 50% of the following tax types:

  • Income tax
  • State portion of the financial institution excise tax 
  • Insurance premium tax 
  • State utility license tax

Qualifying EDOs must submit an application to Innovate Alabama, as well as commit to sending a status letter. Taxpayers donating to EDOs for approved projects receive a credit equal to their donation and may carry the credit for up to five years. The credit may be passed through to individual owners, shareholders, partners or members of an LLC. 


Eligibility

An “economic development organization” is a state or local development organization meeting each of these three criteria:

  • Is an Alabama entity not operating for a profit; and
  • Is charged with improving the state or a region of the state; and 
  • Has a record of supporting or otherwise participating in economic development efforts in Alabama

Apply

Please stay tuned for details on the next round of applications.

Successful applicants can access their funds on the My Alabama Tax Portal.

Please direct questions on the Innovate Alabama Tax Credit Program to incentives@innovatealabama.org.


Innovate Alabama Tax Credit Recipients

Innovate Alabama Tax Credit recipients include the following EDOs. This list will continue to evolve as Innovate Alabama approves additional recipients in future rounds.

  • Alabama Artificial Intelligence Center of Excellence
  • Baldwin County Community
  • Bethel Ensley Action Task (BEAT)
  • Birmingham Bound
  • Bronze Valley
  • Central Alabama Redevelopment Alliance
  • Economic Development Foundation
  • The Economic Development Partnership of Alabama
  • Ed Farm/Propel
  • Hudson Alpha Institute for Biotechnology
  • Innovation Depot
  • Innovation Portal
  • MidCity Accelerator Foundation
  • Opportunity Alabama
  • Prosper Foundation
  • REV Birmingham
  • Southern Research Institute
  • Tuscaloosa County Industrial Development