HB109 Alabama 2016 Session

Summary

Primary Sponsor

Becky Nordgren

Republican

Session

Regular Session 2016

Title

Health Savings Accounts, income tax deduction auth. for contributions to, Sec. 40-18-15.6 added.

Summary

HB109 creates an Alabama personal income tax deduction for Health Savings Account contributions that mirrors the federal deduction, effective for tax years starting in 2018, with employer contributions not deductible.

What This Bill Does

It lets Alabama residents deduct contributions they make to their Health Savings Account on their Alabama individual income tax return up to the federal limit. Employer contributions to an employee's HSA are not counted for the deduction. The deduction applies to contributions made on or after January 1, 2018. It repeals conflicting laws and becomes effective for taxable years beginning after December 31, 2017.

Who It Affects

• Alabama residents who contribute to a Health Savings Account can deduct those contributions on their Alabama personal income tax return, up to the federal limit.
• Employers who contribute to an employee's Health Savings Account: those contributions are not treated as taxable income for the employee and are not deductible on the Alabama return.

Key Provisions

• Adds Section 40-18-15.6 to create an Alabama deduction for Health Savings Account contributions up to the federal limit (26 USC §223).
• Deduction is available for contributions made on or after January 1, 2018; employer contributions are not deductible.
• The deduction aligns Alabama law with federal rules and repeals conflicting laws; applies to taxable years beginning after December 31, 2017.

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