SB76 Alabama 2018 Session

Updated Feb 26, 2026

Notable

Summary

Primary Sponsor: Del Marsh
Republican
Session: Regular Session 2018
Title: Income tax, individuals, standard deduction increased based on certain adjusted gross income for, Sec. 40-18-15 am'd.
Summary: SB 76 expands Alabama's standard deduction options and exempts certain foreign income from state income tax if it is exempt from federal taxes.
What This Bill Does
It broadens the adjusted gross income range eligible for the maximum standard deduction. It updates the optional standard deduction to allow a choice between 20% of AGI or a fixed cap, with specific higher thresholds and phase-down rules for different filing statuses starting after 2018. It adds a rule that certain foreign income, such as housing allowances, can be exempt from Alabama income tax if that income is exempt from federal income tax. It retains existing exemptions for retirees, dependents, and other items, with changes focused on how the deductions interact with AGI and nonresident rules.

Who It Affects
Alabama resident individual taxpayers who may qualify for a larger maximum standard deduction or the optional standard deduction and will see changes based on filing status and AGI.
Taxpayers with foreign income, including housing allowances, who may have that income exempt from Alabama tax if it is exempt from federal tax under IRS rules.

Key Provisions
Amends 40-18-15 to expand the adjusted gross income range eligible for the maximum standard deduction.
Creates/updates the optional standard deduction to be 20% of AGI or a lesser fixed amount, with joint filers allowed up to twice the single amount; later years (post-2018) set higher AGI thresholds and a phase-down formula for each filing status (married jointly, married filing separately, head of family, and single).
For tax years after 2018, specifies new standard deduction amounts and reductions based on AGI for each filing status, with minimums not falling below set floors.
Adds a foreign-income exemption: foreign housing allowances and earned income exempt from federal tax (per Section 911) are exempt from Alabama income tax to the extent they are federally exempt.
Preserves and details various existing exemptions (retirement income, dependents, ABLE/529 provisions, etc.) while aligning them with the new deduction structure and nonresident rules.

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