The "Portable Benefits Act" introduces a new framework for independent contractors in Alabama by establishing portable benefit accounts, as detailed in Article 7 of Chapter 1 of Title 25 of the Code of Alabama 1975. This act allows independent contractors to open accounts administered by designated providers, which can be used to fund various benefit plans, including health insurance and retirement benefits. The act also clarifies that contributions made by hiring parties to these accounts will not create an employment relationship, thus protecting hiring parties from liability under the Alabama Workers' Compensation Act.

Additionally, the act provides tax incentives for both hiring parties and independent contractors. Starting from tax years after December 31, 2025, hiring parties can deduct contributions made to portable benefit accounts as a business expense, while independent contractors can deduct contributions made by hiring parties and their own contributions on their individual income tax returns. The act emphasizes that no item can be deducted more than once, ensuring clarity in tax reporting. The provisions of this act are set to take effect on December 31, 2025.

Statutes affected:
Introduced: 25-1-70, 25-1-70
Engrossed: 25-1-70, 25-1-70
Enrolled: 25-1-70, 25-1-70