HB91 Alabama 2016 Session

Summary

Primary Sponsor

Lynn Greer

Republican

Session

Regular Session 2016

Title

Deferred compensation plans, portion of income exempt from income tax, Sec. 40-18-19 am'd.

Summary

HB91 would exempt 90 percent of income from defined contribution deferred compensation plans from Alabama income tax, up to a maximum of $50,000.

What This Bill Does

The bill amends Section 40-18-19 to create an exemption for income from defined contribution deferred compensation plans. The exemption is equal to 90 percent of that income, up to $50,000. This reduces the amount of this income that is taxed for resident Alabama taxpayers. The change would take effect immediately after the bill is enacted by the Governor.

Who It Affects

• Resident individual taxpayers in Alabama who receive income from defined contribution deferred compensation plans (such as 401(k)-style accounts).
• Taxpayers with higher defined contribution plan income, who could receive up to the exemption cap of $50,000 in a tax year (subject to the 90% rule).

Key Provisions

• Adds a new exemption: 90% of income from defined contribution deferred compensation plans is exempt from Alabama income tax, up to $50,000.
• Applies specifically to resident taxpayers as part of Section 40-18-19's exemptions, with immediate effectiveness upon enactment.

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