If you own a small business with 50 or fewer employees, Alabama gives you an extra $1,000 income tax credit for each recently discharged, unemployed Alabama veteran you newly hire. The credit is also available when the unemployed Alabama veteran is a combat veteran, regardless of how recently they were discharged. A separate 0.5 percent job credit on wages paid to veterans is available to incentivized companies where at least 12 percent of personnel were veterans.
Claim the credit on your Alabama income tax return. Keep payroll and hiring records that show the veteran was recently discharged and unemployed, or is a combat veteran, when you hired them.
The new hire’s DD214 showing a recent discharge or combat service, proof they were unemployed when hired, and your payroll records.
