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AL HB388

AL HB388
Income tax, exemption for taxable retirement income increased


summary

Introduced
03/05/2025
In Committee
04/30/2025
Crossed Over
Passed
Dead
05/14/2025

Introduced Session

Potential new amendment
2025 Regular Session

Bill Summary

Income tax, exemption for taxable retirement income increased

AI Summary

This bill amends Alabama's income tax code to increase the tax exemption for retirement income for individuals aged 65 and older. Specifically, from January 1, 2023 through December 31, 2025, individuals in this age group can exempt the first $6,000 of taxable retirement income from state income taxes. Starting January 1, 2026, this exemption will increase to $12,000, effectively doubling the tax break for retirees. The bill builds upon existing tax exemptions for various types of retirement income, including pensions from state retirement systems, firefighter and police retirement compensation, federal government retirement funds, and other defined benefit plans. The change is designed to provide additional financial relief for older residents by reducing their state income tax burden on retirement earnings. The new provisions will become effective on October 1, 2025, giving taxpayers and state revenue authorities time to prepare for the implementation of the increased retirement income tax exemption.

Committee Categories

Budget and Finance

Sponsors (49)

Danny Garrett (R)* Alan Baker (R),  Bryan Brinyark (R),  Mack Butler (R),  Jim Carns (R),  Brock Colvin (R),  Susan DuBose (R),  Brett Easterbrook (R),  Tracy Estes (R),  Jennifer Fidler (R),  Mark Gidley (R),  Donna Givens (R),  Matthew Hammett (R),  Ben Harrison (R),  Frances Holk-Jones (R),  Leigh Hulsey (R),  Steve Hurst (R),  Reed Ingram (R),  Jamie Kiel (R),  Mike Kirkland (R),  Bill Lamb (R),  Nathaniel Ledbetter (R),  Craig Lipscomb (R),  James Lomax (R),  Joe Lovvorn (R),  Rhett Marques (R),  Arnold Mooney (R),  Parker Moore (R),  Kenneth Paschal (R),  Phillip Pettus (R),  Rick Rehm (R),  Phillip Rigsby (R),  Chad Robertson (R),  Jeana Ross (R),  Chris Sells (R),  Mike Shaw (R),  Mark Shirey (R),  Van Smith (R),  Jeff Sorrells (R),  Scott Stadthagen (R),  David Standridge (R),  Jerry Starnes (R),  Troy Stubbs (R),  Allen Treadaway (R),  Bubba Underwood (R),  Ritchie Whorton (R),  Margie Wilcox (R),  Matthew Woods (R),  Ernie Yarbrough (R), 

Last Action

Read for the Second Time and placed on the Calendar (on 05/01/2025)

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