Budget & Taxes (Income Tax)

in committee · Alabama · House Mar 31, 2026

HB 657: Income Taxes; to provide a one-time refundable income tax credit to qualified taxpayers

This bill creates a one-time refundable tax credit for eligible Alabama individual taxpayers filing returns for the 2025 tax year. To qualify, a person must have filed a state income tax return for both 2024 and 2025 and cannot be a nonresident, an estate, or a dependent claimed on another taxpayer's 2024 return. The credit amount is based on the taxpayer's 2024 tax liability or a fixed dollar amount determined by their 2025 filing status, such as $250 for single filers or $500 for married couples filing jointly. The refund will be automatically issued by the state tax department, applied to any outstanding debts owed to the state, and will not include interest or be treated as taxable income.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill provides tax relief via a refundable credit, reducing tax burden for eligible taxpayers and promoting fiscal equity.85% confidence

Sub-Topics Income Tax Tax Credits

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in committee · Alabama · House Apr 2, 2026

HB 665: Taxation; to amend 40-18-14, Code of Alabama 1975, relating to overtime compensation.

This bill proposes to reinstate a tax exemption for overtime pay earned by hourly workers in Alabama, which had previously been in effect only through June 30, 2025. Under the new rules, overtime compensation calculated according to the U.S. Fair Labor Standards Act would be excluded from state income tax starting with the 2027 tax year. The legislation also mandates that the Department of Revenue and the Alabama Commission on the Evaluation of Services conduct and publish an economic impact study to analyze the effects of this exemption. Additionally, the bill includes minor technical updates to align the state tax code with current language standards.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill provides tax relief for hourly workers by exempting overtime pay from state income tax, aligning with support indicators for tax relief.85% confidence ✓ Labor & EmploymentSupports Labor & EmploymentBill exempts overtime pay from state income tax, effectively increasing net wages for hourly workers.85% confidence

Sub-Topics Income Tax Tax Incentives Labor Standards

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in committee · Alabama · House Mar 3, 2026

HB 554: State Energy Supply and Chemical Trade Stabilization Act established; income tax credit, grant program, and loan program created.

This bill establishes the State Energy Supply and Chemical Trade Stabilization Act to support Alabama's energy and chemical manufacturing sectors by addressing risks from global trade disruptions. It creates three main financial tools: a grant program with up to $2 million annually for facilities to mitigate trade-related losses and upgrade infrastructure, a refundable income tax credit covering 30% of qualifying investments capped at $2 million per year, and a low-interest loan program for site development and equipment. The legislation also forms a five-member board to assess trade vulnerabilities and recommend strategies for securing supply chains, with the department responsible for implementing rules and the act taking effect on July 1, 2026.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill creates grant, tax credit, and loan programs to fund energy and chemical sector development, directly advancing state budget and economic development goals.85% confidence ✓ EnergySupports EnergyBill creates grant, tax credit, and loan programs to support energy supply and chemical manufacturing sectors, strengthening energy infrastructure and economic development.90% confidence

Sub-Topics Income Tax Tax Credits Tags Economic Development

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in committee · Alabama · House Mar 5, 2026

HB 585: Money transmissions, transaction fee imposed for certain outgoing international wire transfers, income tax credit established to offset transaction fees imposed on taxpayer, reporting of certain suspicious cash transactions required, Securities Commission to enforce

This bill requires money transmission businesses in Alabama to report large or suspicious cash transactions to the state Securities Commission and imposes a 1.5% fee on outgoing international wire transfers. The collected fees would be placed in a state fund and distributed to local sheriffs to help cover immigration law enforcement costs, while taxpayers who pay these fees would receive an income tax credit to offset the charges. The legislation also establishes criminal and civil penalties for businesses that fail to comply with reporting requirements and creates a study commission to monitor how the fee proceeds are used. These provisions would remain in effect until December 31, 2030, when they are scheduled to be repealed.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill provides income tax credit to offset transaction fees and allocates funds to local sheriffs for immigration enforcement, supporting fiscal management and public service funding.75% confidence ✓ Criminal JusticeSupports Criminal JusticeBill funds local sheriffs for immigration enforcement through wire transfer fees, directly supporting law enforcement resources and criminal justice operations.75% confidence ✗ ImmigrationOpposes ImmigrationBill funds immigration law enforcement through wire transfer fees and mandates reporting of suspicious transactions, increasing state enforcement capacity.85% confidence

Sub-Topics Income Tax Tax Credits Law Enforcement

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in committee · Alabama · House Mar 3, 2026

HB 551: Creates the Steel and Advanced Manufacturing Competitiveness Act; creates Steel Industry Relief and Investment Grant Program; creates the Manufacturing Innovation and Modernization Tax Credit

This bill establishes the Steel and Advanced Manufacturing Competitiveness Act in Alabama to support local steel producers and industrial manufacturers facing challenges from global trade disruptions. It creates a $10 million annual grant program for eligible manufacturers to address trade-related hardships, fund working capital, retain skilled workers, or improve operational efficiency. The legislation also introduces a refundable income tax credit offering up to 20% of qualifying investments in advanced machinery or automation, capped at $1 million per company and $10 million statewide annually, effective for tax years 2027 through 2029. Additionally, the bill requires state infrastructure projects to prioritize domestically produced steel and components when available, establishes an export expansion initiative to help manufacturers access international markets, and creates a five-member board to monitor trade risks and recommend policy improvements.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill creates $10M annual grant program and tax credit to support manufacturing, advancing economic development and providing fiscal relief to businesses.85% confidence

Sub-Topics Income Tax Tax Credits

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in committee · Alabama · House Mar 10, 2026

HB 596: Economic Development; small towns, programs established to fund businesses, reuse of properties, and other grants, administered by Alabama Department of Economic and Community Affairs; tax credit established

This bill establishes the Main Street Revival Act to support economic development in small Alabama towns with populations under 25,000. It creates four grant programs administered by the Alabama Department of Economic and Community Affairs to help businesses start or expand, preserve historic commercial buildings, support temporary retail spaces and business mentorship, and assist local governments with updating zoning and land use regulations. Additionally, the bill creates a 25 percent income tax credit for property owners who renovate eligible vacant or underutilized commercial properties. Funding for these programs depends on future legislative appropriations, and the law takes effect on January 1, 2027.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill establishes grant programs and tax credits to fund economic development in small towns, directly advancing budget and taxation through new funding mechanisms.85% confidence

Sub-Topics Income Tax Tax Credits Tax Incentives Tags Economic Development Small Business

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in committee · Alabama · House Mar 10, 2026

HB 608: Income Tax; to create the R&D Tax Credit Enhancement Act

This bill creates the R&D Tax Credit Enhancement Act to provide income tax credits for organizations in Alabama that invest in research and development, specifically targeting health sciences, biotechnology, and university-based research. The program would offer a 10% tax credit on qualified research expenses, with higher 15% credits for collaborative research involving in-state academic institutions and up to $250,000 in refundable or transferable credits for startups and small businesses with fewer than 50 employees. The Department of Revenue would administer the program, which is capped at $30 million annually, and publish annual reports on the number of credits issued and the sectors receiving support. The bill would apply to tax years beginning on or after January 1, 2027, and would require a streamlined application process for eligible organizations to claim the credits.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill creates tax credits for R&D investments, promoting economic development and funding innovation through tax incentives.85% confidence ✓ TechnologySupports TechnologyBill provides tax credits for R&D investments in health sciences, biotechnology, and university research, directly supporting technology innovation and development.75% confidence

Sub-Topics Income Tax Tax Credits

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died · Alabama · Senate Apr 7, 2026

SB 245: Income Taxes, tax deduction for members of a Health Care Sharing Ministry for certain health care sharing expenses

SB 245, the Health Care Sharing Ministries Tax Parity Act, allows members of health care sharing ministries to deduct their contributions toward qualified health care expenses from their Alabama state income tax, starting January 1, 2027. It directly affects individuals who are members of these ministries, treating their contributions similarly to health insurance premiums and health savings account expenses for tax deduction purposes. The bill requires taxpayers to claim the deduction on their state tax return and provides that contributions received for medical expenses (without a prior deduction) are not taxable income. This legislation aims to create tax parity between health care sharing ministries and traditional health insurance for Alabama taxpayers.

Topics ✓ Budget & TaxesSupports Budget & TaxesCreates new tax deduction for health care sharing ministry members, providing tax relief similar to health insurance deductions, advancing tax parity for this group.90% confidence ✓ HealthcareSupports HealthcareBill allows tax deductions for health care sharing ministry contributions, treating them like insurance premiums to expand coverage options and improve affordability for members.95% confidence

Sub-Topics Income Tax Insurance

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in committee · Alabama · House Feb 12, 2026

HB 445: Relating to gross income; to amend Section 40-18-14, Code of Alabama 1975; to exclude difficulty of care payments from gross income

HB 445 amends Alabama's tax code to exclude "difficulty of care payments" from taxable gross income. Specifically, it adds a new exemption for payments received by individual care providers under Medicaid Home and Community-Based Services Waiver programs. This change directly affects care providers who receive these payments for services to Medicaid participants. The bill modifies Section 40-18-14 of the Alabama Code to ensure these payments are not counted toward an individual's state income tax calculation, aligning with federal tax treatment under 26 U.S.C. § 131.

Topics ✓ Budget & TaxesSupports Budget & TaxesExcludes Medicaid care provider payments from taxable income, providing tax relief to individuals and providers under Medicaid Home and Community-Based Services programs.95% confidence ✓ HealthcareSupports HealthcareExcludes Medicaid care provider payments from taxable income, strengthening provider compensation under public health programs without restricting access.92% confidence

Sub-Topics Income Tax Medicaid

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in committee · Alabama · Senate Feb 17, 2026

SB 313: Income taxes, state income tax credit for qualified rehabilitation expenses of certified historic properties extended, annual credit amount increased

SB 313 extends Alabama's state income tax credit for rehabilitating certified historic properties through 2032 (instead of ending in 2027) and increases the annual credit limits. It raises the credit amount for urban properties to $25,000 and lowers the threshold for rural properties to $20,000 (based on county population under 175,000). The bill directly affects property owners - individuals or tax-exempt entities - who undertake substantial rehabilitation of historic structures certified by Alabama's Historical Commission. Key provisions include updated definitions for "rural communities" and "substantial rehabilitation," ensuring the credit aligns with federal standards for historic preservation.

Topics ✓ Budget & TaxesSupports Budget & TaxesExtends and increases tax credits for historic property rehabilitation, directly providing tax relief under taxation policy per bill's explicit language.95% confidence

Sub-Topics Income Tax Tax Credits

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