The "Portable Benefits Act" is a new piece of legislation added to the Code of Alabama 1975, specifically Article 7 of Chapter 1 of Title 25, commencing with Section 25-1-70. This act establishes portable benefit accounts for independent contractors, allowing them to fund various benefit plans such as health insurance, income replacement, life insurance, and retirement benefits. The act defines key terms, including "portable benefit account," "hiring party," and "portable benefit account provider," and outlines the conditions under which contributions can be made to these accounts. Notably, contributions made by hiring parties will not be interpreted as establishing an employment relationship, thus protecting them from liability under the Alabama Workers' Compensation Act.

Additionally, the act provides for tax deductions related to contributions made to portable benefit accounts, effective for tax years beginning after December 31, 2025. Hiring parties can deduct their contributions as business expenses, while independent contractors can deduct contributions made by hiring parties and their own contributions on their individual income tax returns. The legislation emphasizes that no item can be deducted more than once, ensuring clarity in tax reporting. The act is 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