SB504 Alabama 2015 Session

Summary

Primary Sponsor

Shay ShelnuttSenator

Republican

Session

Regular Session 2015

Title

Income tax withholdings, exemption for no tax liability for prior year or no anticipated tax liability, repealed, Sec. 40-18-73 am'd.

Summary

SB504 would end the ability to be completely exempt from Alabama income tax withholding and require withholding to be based on Alabama Form A-4 with an appropriate number of exemptions.

What This Bill Does

It repeals the total exemption from withholding so employees cannot avoid withholding by certifying no liability. Employees must file Alabama Form A-4 (not the federal W-4) to request withholding based on exemptions, and withholding must occur if no certificate is provided. Certificates take effect at the first payroll after submission and stay in effect until replaced, with rules for updating exemptions and penalties for inflating exemptions. The act becomes effective September 1, 2015, and the Department of Revenue can issue implementing rules.

Who It Affects

• Employees in Alabama—must have a Form A-4 and cannot claim a total exemption from withholding; withholding will occur based on the exemptions claimed, or zero if no certificate is provided.
• Employers in Alabama—must collect Form A-4, withhold based on exemptions, apply penalties for improper exemptions, and provide required certificate copies for high-exemption cases; withholding must follow certificate changes and timing rules.

Key Provisions

• Repeals the total withholding exemption, requiring withholding to be based on the number of exemptions claimed on Form A-4.
• Requires use of Alabama Form A-4 (not federal Form W-4) for withholding exemptions and imposes penalties for inflating exemptions.
• If an employee fails to furnish Form A-4, the employer must withhold as if the employee has zero exemptions; certificates take effect at the first payroll period after submission and remain until replaced.
• Effective date of September 1, 2015; the Department of Revenue may issue rules to implement the act and there are reporting requirements for certificates with eight or more exemptions.

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