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State Rep. Matthew Hammett (R – Andalusia) outlined on Tuesday a new program passed by the Legislature during the 2025 regular session that allows Alabamians to claim dollar-for-dollar state tax credits in return for contributions made to rural hospitals such as Andalusia Health in Andalusia and Mizell Memorial Hospital in Opp.

“A perfect storm of circumstances has threatened the economic foundations of rural hospitals and healthcare facilities across the state, and in some areas, it is a coin flip as to whether they will continue to operate in the long term,” Hammett said. “Recognizing the seriousness of the situation, the Legislature passed a commonsense tax credit solution that will bring a much needed measure of economic relief to rural hospitals like our own Andalusia Health and Mizell Memorial Hospital.”

To ensure that residents in every region of the state continue to have access to essential healthcare, the Legislature passed a bill by State Rep. Terri Collins (R – Decatur) that created the Rural Hospital Investment Tax Credit, which allows individuals, businesses, and corporations to receive 100% state tax credits for donations they make to rural medical centers.

Based on a program in Georgia that has generated approximately $430 million since its creation, the tax credits serve as an incentive for those willing to invest in our rural communities and the healthcare needs of those who reside in them.

Hammett noted that since 2011, more than a half-dozen rural hospitals in Alabama have been forced to close as a result of funding issues, and out of the 52 remaining, roughly half are considered to be at risk of closure.

It is estimated that close to 20 rural hospitals could shut their doors any day.

The program is scheduled to be available beginning in the 2026 tax year, and the full, 100 percent tax credits can be claimed against various state taxes, including income taxes, and may be carried forward for up to three years.

An initial $20 million cap on available tax credits will be in place during the 2026 tax year but will rise to $30 million in subsequent years according to a provision in the legislation.