HB9 Alabama 2015 2nd Special Session

Summary

Primary Sponsor

Paul Beckman

Republican

Session

Second Special Session 2015

Title

Taxation, income tax, deduction for FICA and self-employment taxes limited, Sec. 40-18-15 am'd.

Summary

HB9 would limit how much FICA and self-employment taxes you can deduct from Alabama taxable income.

What This Bill Does

The bill amends Section 40-18-15 to cap the deduction for Medicare taxes (FICA) and self-employment taxes when calculating Alabama income tax. It keeps other deductions available but introduces an optional standard deduction option (percent of AGI or fixed amounts by filing status). It also sets rules for how deductions apply to nonresidents based on Alabama-source income and takes effect for tax year 2015 and later.

Who It Affects

• Individual taxpayers who itemize deductions and are subject to FICA and self-employment taxes; their deduction could be reduced, increasing their Alabama taxable income.
• Nonresident individuals filing Alabama taxes; their allowable deductions would be limited proportionally based on Alabama-source income.

Key Provisions

• Amends Section 40-18-15 to limit the amount of FICA and self-employment taxes that can be claimed as a deduction against income.
• Establishes an optional standard deduction: 20% of adjusted gross income or a fixed amount (with different limits for joint, separate, head of family, and single filers).
• Maintains a broad list of deductible items (taxes, interest, charitable contributions, medical expenses, etc.) with specific rules, including nonresident allocation rules tied to Alabama activity or income.
• Applies to tax years beginning January 1, 2015 and thereafter; includes severability and repeal provisions for 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