HB42 Alabama 2015 1st Special Session

Summary

Primary Sponsor

Ken Johnson

Republican

Session

First Special Session 2015

Title

Income tax withholding exemption repealed, Revenue Dept. to provide forms on-line, Taxpayer Fraud Prevention Act, Sec. 40-18-73 am'd.

Summary

HB42 repeals the total withholding exemption, requires use of Alabama Form A-4 for withholding, and directs the Revenue Department to provide downloadable forms online to help prevent tax avoidance.

What This Bill Does

It eliminates the option for employees to claim a total exemption from income tax withholding. It requires employers to use Alabama Form A-4 (not the federal W-4) to determine withholding and to begin withholding at the first payroll period after submission. It directs the Department of Revenue to provide downloadable withholding forms in English and other languages. It also imposes penalties for inflating exemptions and for employers who fail to file required exemption certificates, and sets rules for when and how withholding can be adjusted when certificates are updated.

Who It Affects

• Employees: must file Alabama Form A-4 to claim exemptions; cannot claim a total exemption; withholding will occur unless updated certificates are filed; may need to file returns and seek refunds if entitled.
• Employers: must withhold based on Form A-4; must obtain and handle exemption certificates (including copies for high-exemption cases); must withhold if the employee fails to furnish the form; must adjust withholding when new certificates are submitted; face penalties for noncompliance and late filings.

Key Provisions

• Repeals the total withholding exemption; employees can no longer avoid withholding entirely.
• Requires Alabama Form A-4 for withholding; federal W-4 is not acceptable; Department of Revenue must provide downloadable forms in English and other languages online.
• Withholding exemptions take effect at the first payroll period after submission and continue until an updated certificate takes effect; changes can be implemented on specified dates or immediately at the employer's option.
• If the number of exemptions changes, the employee must submit a new Form A-4 reflecting the new total; certificates submitted for the next tax year do not affect current-year payments.
• Penalties include $500 for inflating exemption numbers and $50 per certificate for employers who fail to timely file copies for employees claiming eight or more exemptions; the department may require reporting and enforcement actions.
• Effective date: October 1, 2015.

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