(a) An Alabama income tax deduction is established for employers that create new jobs for unemployed persons. The deduction shall equal 50 percent of the gross wages paid to each person hired by an employer who, at the time of such employment, was drawing unemployment compensation or whose unemployment benefits had expired. The unemployment status of the employee at the time of the employment shall be certified by the local employment agency. The deduction may be claimed in only one tax year and may not be claimed until the employee has been continuously employed by the employer for 12 months following the hire date. The deduction shall be allowed against the tax imposed by this chapter. The deduction is not refundable or transferable. The deduction shall be available, on a pro rata basis, to the owners of qualified employers that are entities taxed under subchapters S or K of the Internal Revenue Code.

(b) The deduction allowed in subsection (a) shall be further limited as follows:

(1) A 50 percent deduction would be granted to wage rates of fourteen dollars ($14) per hour and above.

(2) A 40 percent deduction would be granted for wage rates between twelve dollars ($12) and fourteen dollars ($14) per hour.

(3) A 35 percent deduction would be granted for wage rates between ten dollars ($10) and twelve dollars ($12) per hour.

(4) No deduction would be granted for jobs paying less than ten dollars ($10) per hour.

(5) No deductions would be granted for less than full-time jobs (37.5 hours).