A press release from Riley’s office said the legislation, effective January 1, 2009, allows business owners with fewer than 25 employees to deduct 150% of the amount they pay for employee health insurance premiums from their state income taxes. It also allows employees of small businesses earning $50,000 or less annually to deduct 150% of what they pay for health insurance from state income taxes.
“[M]ore than 80% of all new jobs created in Alabama are created by small businesses. It’s never made sense to me that we will give incentives to large companies but not small businesses that create most of the new jobs,” Riley said in the release. “It’s time we provide small business with incentives that will help them grow their companies and hire more workers.”
Small business owners and chambers of commerce across the state have supported Riley’s proposal, and say the tax savings will allow small companies to keep up with rising health care costs and hire additional workers.
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