Franklin hospitals can benefit from tax credits
Rural hospitals are the backbone of many Alabama communities. They care for families around the clock, support thousands of local jobs, and serve as essential partners in economic development. Yet many of these hospitals face significant financial challenges that threaten their ability to keep care close to home.
More than 50 hospitals in Alabama are considered rural, and many are struggling to provide the services needed by their communities — or even to keep their doors open.
The health care industry continues to face a widespread labor shortage and increasing costs for drugs, supplies and labor. While these issues exist throughout the health care industry, they deliver a bigger blow to smaller hospitals in rural areas.
And it’s not just doctors and nurses that rural hospitals are having trouble hiring or keeping. Red Bay Hospital Administrator Sherry Jolley said support departments like food services are struggling to hire workers who can make comparable wages at local fastfood restaurants.
There’s also the issue of Medicare reimbursements. Alabama ranks among the lowest reimbursed states, and this hits rural hospitals hard because of the number of Medicare and uninsured patients they serve.
But thanks to the Alabama Legislature, taxpayers across the state can beginning this year and continuing until 2028 can choose to take advantage of a new Rural Hospital Investment Tax Credit to help support rural hospitals.
The program allows eligible taxpayers to give money to a local hospital and reduce their state tax bill by the same amount. Both Franklin County hospitals appear on the Alabama Department of Revenue’s official list of eligible facilities.
The Rural Hospital Investment Program Board has classified Red Bay Hospital as Tier 1, the highest-need category, and Russellville Hospital as Tier 2.
Donors can give through an approved third-party organization without naming a hospital or designate a specific hospital they would like the funds to go to.
Those who want to donate must reserve a credit through the My Alabama Taxes portal. Once the reservation is made, they have 30 days to make the donation.
The hospital or an approved third-party organization must certify the donation within 30 days of receiving it, and within 60 days of the reservation, whichever comes first.
Only after the donation is made and certified does the state issue the tax credit. Individuals may claim up to $15,000 per year or $30,000 for married couples filing jointly.
The state capped total credits at $20 million for 2026. Each eligible hospital can receive no more than $750,000 per year.
Russellville Hospital’s Marketing Director Audrey Daniel encouraged residents to review the program on the My Alabama Taxes website.
“For rural hospitals like Russellville Hospital, this program is especially impactful,” Daniels said. “It helps provide much-needed financial stability that can be used to support daily operations, invest in services, and address workforce challenges.”
We encourage any Franklin County taxpayer who needs a tax writeoff in 2026 to consider participating in the Rural Hospital Investment Tax Credit program.
For information, residents may contact the Alabama Department of Revenue’s Economic Development and Tax Incentives division at 334-353-9789.
