Dual Enrollment Tax Credit Window Nears

Alabama’s newest income tax credit for businesses and individuals kicks in beginning Jan. 1 and it will be a source of significant funding for dually enrolled high school and two-year college students.

The Alabama Future Workforce Initiative Act, which was supported by the Business Council of Alabama in the 2014 legislative session, created a tax credit for contributions to the Alabama Department of Postsecondary Education in support of the Career-Technical Dual Enrollment Program.

“The Business Council of Alabama supports the concept of dual enrollment and now Alabama taxpayers of all types will have the opportunity to support dual education and help create job-ready high school graduates or graduates who seek to advance their educations,” said BCA President and CEO William Canary.

“The success of Alabama’s business community largely depends on a public education system that produces graduates with skills  that the 21st century workplace demands,” Canary said. 

Donations made on or after Jan. 1 are eligible.

Anyone can donate – individuals, married couples filing jointly, a limited liability company, a corporation, or any other business entity. Contributors will receive proof of contributions from the Alabama Department of Postsecondary Education. (For federal tax purposes, the entire amount of donation would quality as a charitable donation subject to federal charitable contribution limits.)

Any amount can be donated to the dual-enrollment program in exchange for a tax credit of 50 percent but only up to a total Alabama income tax liability of $500,000 in any one tax year, according to a synopsis of the law written by BCA member JamisonMoneyFarmer PC of Tuscaloosa. The total tax credit amount is capped at $5 million.

The Alabama Future Workforce Initiative provides scholarships for eligible high school students in grades 10-12. They can dually enroll in college-level, career-technical courses of study and earn high school and college credits at the same time.

A taxpayer may specifically earmark up to 80 percent of a contribution to an approved career technical program or courses at a particular Alabama Community College System school, JamisonMoneyFarmer said.

Terry Waters is executive director of economic and workforce development for the Department of Postsecondary Education. “During the past year, due to limited funding, we were able to award career-tech dual enrollment scholarships to only 2,100 high school students,” he said.