Bill > HB379

This bill modifies Alabama's income tax law to provide a new exemption for certain remote workers. Specifically, the bill creates a new section of tax code that allows nonresident workers to be exempt from Alabama state income tax if they work in Alabama for 30 or fewer days in a calendar year, perform employment duties in multiple states, and are not professional athletes, entertainers, or public figures. The exemption applies only if the worker's home state either provides a similar tax exemption, does not impose state income tax, or if the worker's income is constitutionally or federally exempt from taxation. Employers are not required to withhold taxes for such employees, but must begin withholding if the worker exceeds 30 days of work in Alabama. The bill also provides special provisions for disaster or emergency-related work and allows employers to rely on time and attendance tracking systems or employee self-reporting to determine tax withholding requirements. Employers will not face penalties for good-faith efforts to comply with the new rules. The new tax provisions will become effective for tax years beginning on or after January 1, 2026, with the overall act becoming effective on October 1, 2025.

Budget and Finance

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