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A $2,000 Income Tax Credit for a Veteran-Started Business

A recently deployed, unemployed veteran who holds at least 50% of an Alabama start-up begun after 2 April 2012 may claim a $2,000 nonrefundable income tax credit, in a year the business made at least $3,000 of net profit. It cannot be claimed where an employer has claimed the hiring credit for the same veteran. The credit runs to 31 December 2028 unless the legislature extends it.

Verified August 27, 2026

What this benefit is

A recently deployed, unemployed veteran who holds at least 50% of an Alabama start-up begun after 2 April 2012 may claim a $2,000 nonrefundable income tax credit, in a year the business made at least $3,000 of net profit. It cannot be claimed where an employer has claimed the hiring credit for the same veteran. The credit runs to 31 December 2028 unless the legislature extends it.

What it's worth: A $2,000 nonrefundable income tax credit

  • The credit is $2,000 and NONREFUNDABLE, so it reduces tax due and any excess is not paid out.
  • The veteran must hold at least 50% ownership of one Alabama start-up begun after 2 April 2012.
  • The business must have net profit of at least $3,000 in the year the credit is claimed. A loss-making year does not qualify.
  • It cannot be claimed if an employer has claimed the hiring credit for the same veteran — the two are alternatives.
  • 'Recently deployed unemployed veteran' is a defined term in the statute rather than a description. Ask the revenue department whether you meet it before relying on the credit.
  • The credit is available through 31 December 2028 unless the legislature extends it.

Who is entitled to it

  • You served in the U.S. armed forces.
  • You run, or are starting, a business.
  • You were a recently deployed veteran and unemployed when the business began.
  • Your business is in Alabama.

Not sure whether that describes you?

Answer a few questions about this benefit specifically — we only ask what this one actually depends on, and we stop as soon as we know.

How to claim it

Deadline: With your annual Alabama income tax return
  1. 1Check the statutory definition of a 'recently deployed unemployed veteran' with the revenue department before counting on this — it is a defined term and it is where most claims fail.
  2. 2Confirm the business made at least $3,000 of net profit in the year you are claiming for.
  3. 3Confirm no employer has claimed the hiring credit for you. The two cannot both be claimed.
  4. 4Claim the credit on your Alabama income tax return for the year.
  5. 5Diary the sunset: the credit runs to 31 December 2028 unless extended.
Form
Alabama income tax return
File with
Alabama Department of Revenue, with your income tax return
Documents you will need
dd214
No renewal
Once granted it does not need renewing.

Sources

This finder provides an informational match, not a government eligibility determination. The responsible agency decides your application.