(a) The following deductions may be made for tax years beginning after December 31, 2025: (1) A hiring party that contributes its own funds to a portable benefit account as a form of compensation may deduct as a business expense on the Alabama income tax return to compute Alabama taxable income an amount equal to 100 percent of the amount contributed from its own funds during the tax year. (2) A qualifying independent contractor may deduct, as an adjustment to income on the employee’s Alabama individual income tax return, an amount equal to 100 percent of the amount contributed by a hiring party as a form of compensation to a portable benefit account during the applicable tax year as well as any contributions that the independent contractor made to a portable benefit account during the applicable tax year. (b) Nothing in this section shall allow any item to be deducted more than once.
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