HB181 Alabama 2010 Session

Summary

Primary Sponsor

Tommy Sherer

Democrat

Co-Sponsors

Jim McClendonRandy WoodSteve ClouseBarry MaskHoward SanderfordDavid GrimesMicky HammonGreg WrenRobert BentleySpencer CollierAllen TreadawayArthur PayneRichard J. LairdRon JohnsonAlan BootheWarren BeckBenjamin H. LewisJamie IsonSteve McMillanAlan BakerJeremy OdenElwyn ThomasCam WardCraig FordTodd GreesonH. Mac GipsonMike HillMac McCutcheonGregory CanfieldJay LoveVictor GastonPaul DeMarcoDickie DrakeGerald H. AllenJoe HubbardJoe FaustChad FincherMary Sue McClurkin

Session

Regular Session 2010

Title

Income tax, employer's deduction for health insurance premiums, compensation paid to qualifying employees for calculation of employer's deduction further provided for, Sec. 40-18-15.3 am'd.

Summary

This bill would raise the Alabama income tax deduction for health insurance premiums paid by small employers and their qualifying employees from 50% to 100% under Section 40-18-15.3.

What This Bill Does

It creates the Small Business Health Care Assistance Act of 2010 and amends Section 40-18-15.3 to increase the deduction. It would allow qualifying employees to deduct 100% of the health insurance premiums they pay as part of an employer-provided plan, and would also allow qualifying employers to deduct 100% of the premiums they pay on behalf of those employees. It defines who counts as a qualifying employee and a qualifying employer, with thresholds: qualifying employees are Alabama residents earning no more than $50,000 in wages and reporting no more than $75,000 of adjusted gross income on their Alabama tax return ($150,000 if married filing jointly), and qualifying employers have fewer than 25 employees. The changes would apply to tax years beginning after December 31, 2008, and would treat the total compensation paid to a qualifying employee as the wages and AGI to be reported for the employee's Alabama tax return. The act would become effective immediately after passage and approval, and conflicting laws would be repealed.

Who It Affects

• Qualifying employees: Alabama resident employees who work for qualifying employers, earn no more than $50,000 in wages, and report no more than $75,000 of adjusted gross income ($150,000 if married filing jointly) on their Alabama individual income tax return; they would be able to deduct 100% of health insurance premiums they pay under an employer plan.
• Qualifying employers: Small employers with fewer than 25 employees who provide employer-provided health insurance; they would be allowed to deduct 100% of the health insurance premiums paid on behalf of qualifying employees when computing Alabama taxable income.

Key Provisions

• Replaces the existing 50% deduction for both employees and employers with a 100% deduction for health insurance premiums under the referenced sections.
• Defines 'Qualifying Employees' and 'Qualifying Employers' with specific income and employer size thresholds that must be met to qualify for the expanded deductions.
• Applies to tax years beginning after December 31, 2008, and requires the total compensation paid to a qualifying employee by the qualifying employer to be treated as the employee's total wages and adjusted gross income for Alabama tax purposes when determining eligibility.
• Establishes the act as immediate effective upon passage, includes severability, and repeals any conflicting laws.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation