HB94 Alabama 2010 Session

Summary

Primary Sponsor

Gregory Canfield

Republican

Session

Regular Session 2010

Title

Income tax, retirement income from defined contribution plans, exempt under up to certain amounts, Sec. 40-18-19 am'd.

Summary

HB94 would create a phased-in state income tax exemption for retirement income from defined contribution plans, up to $10,000, with an AGI cap and a 2011 start date.

What This Bill Does

It adds retirement payments from defined contribution plans to the state tax exemptions, up to a maximum of $10,000. The exemption is phased in over four years (25%, 50%, 75%, 100%) beginning with tax years in 2011, and only as long as the Education Trust Fund grows by at least 3% each year. The exemption is not available to individuals with adjusted gross income above $75,000 ($150,000 for married couples filing jointly). The defined contribution plan referred to is the one described in IRC Section 414(i).

Who It Affects

• Retirees or designated beneficiaries receiving payments from defined contribution plans, who would be eligible for an exemption up to $10,000 as the phase-in allows.
• Taxpayers with defined contribution plan income whose adjusted gross income exceeds $75,000 ($150,000 for married couples filing jointly), who would not receive the exemption.

Key Provisions

• Adds retirement income from defined contribution plans (IR C Section 414(i)) to the exemptions in Section 40-18-19, up to $10,000.
• Exemption is phased in over four adjustment years (25%, 50%, 75%, 100%), beginning with tax years after December 31, 2010, contingent on Education Trust Fund growth of at least 3%.
• Exemption cannot be claimed by individuals with adjusted gross income above $75,000 ($150,000 for married filing jointly).
• Defined contribution plans are those described in Section 414(i) of the Internal Revenue Code, as amended.
• Effective for tax years beginning on or after January 1, 2011; implementation depends on annual Finance certification and Revenue action to effect the phase-in.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation