HB90 Alabama 2016 Session

Summary

Primary Sponsor

Lynn Greer

Republican

Session

Regular Session 2016

Title

Taxation, defined contribution deferred compensation plans, first $15,000, $30,000 of benefits exempt from state and local income taxes, Revenue Dept. authorized to adopt administrative rules, Sec. 40-18-19 am'd.

Summary

HB90 would start exempting income from defined contribution deferred compensation plans from Alabama state and local taxes, with the exemption rising each year to a maximum of $50,000 by 2021.

What This Bill Does

It creates a new resident tax exemption for income from defined contribution deferred compensation plans. The exempt amount starts at $10,000 in 2017, increases to $20,000 in 2018, $30,000 in 2019, $40,000 in 2020, and $50,000 from 2021 onward, for state and local taxes. The Department of Revenue would adopt rules to implement and administer the exemption, and the act becomes effective immediately after passage with the exemption applying to tax years beginning in 2017.

Who It Affects

• Resident individual taxpayers who receive income from defined contribution deferred compensation plans would have a portion of that income exempt from Alabama state and local income taxes, up to the yearly cap shown (ramping to $50,000 by 2021).
• The Alabama Department of Revenue would be responsible for creating and applying rules to implement and administer the new exemption.

Key Provisions

• Adds a new exemption for up to $10,000 (2017), $20,000 (2018), $30,000 (2019), $40,000 (2020), and $50,000 (2021 and thereafter) of annual income from defined contribution deferred compensation plans, exempt from state and local income taxes for residents.
• Exemption applies to income from these plans as part of the resident exemptions in Section 40-18-19.
• The Department of Revenue may adopt rules necessary to implement and administer this exemption.
• The act amends Section 40-18-19 and becomes effective immediately upon passage, with the exemption applying to tax years beginning January 1, 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