HB285 Alabama 2020 Session

Summary

Primary Sponsor

Tim WadsworthRepresentative

Republican

Session

Regular Session 2020

Title

Physicians, rural income tax credit under certain conditions, existing credit terminated, new credit provided, Secs. 40-18-130.1 to 40-18-132.1, inclusive, added.

Summary

HB285 ends the old rural physician tax credit after 2019 and creates a new, certification-based credit starting in 2020 with higher amounts and a seven-year limit for rural doctors in Alabama.

What This Bill Does

The bill terminates the existing rural physician income tax credit after 2019, but lets those who claimed it before then continue under the old program until their credit expires. It then creates a new rural physician credit (starting in 2020) with defined terms, requires certification by the Department of Public Health, and sets two credit amounts ($10,000/year if the physician lives and practices in a rural community; $5,000/year if they practice there but do not live there) for up to seven consecutive years. Eligibility includes practicing at least 30 hours per week in a rural community, and certain restrictions apply to those already in rural practice on the effective date or who previously claimed the old credit. The credit applies to Alabama income tax and would be in effect through 2023 unless extended, with ongoing reporting and rulemaking by state agencies.

Who It Affects

• Rural physicians: those who live and practice in Alabama's rural communities can qualify for up to $10,000 per year (and up to seven years) if they live and practice there; those who practice in a rural community but do not live there can qualify for $5,000 per year. Eligibility requires at least 30 hours/week in the rural community, and certification from the Department of Public Health; physicians who were already practicing in a rural area on the effective date may face eligibility restrictions unless they return after at least three years away.
• State agencies (Department of Public Health and Department of Revenue): DH public health must certify qualifying physicians and issue certificates; DH may report annually on recipients; Revenue must administer the credit and adopt implementing rules.

Key Provisions

• Termination of the existing rural physician tax credit for tax years ending after December 31, 2019, with grandfathering for those who claimed it before that date.
• Creation of Article 4A.1 starting January 1, 2020, defining terms: PRACTICES, RURAL COMMUNITY, and RURAL PHYSICIAN.
• Rural physician eligibility requires at least 30 hours per week of practice in a rural community; rural community defined as not in an urbanized area.
• Credit amounts: $10,000 per year if the physician lives and practices in the rural community; $5,000 per year if they practice there but do not live there.
• No new credit for physicians already practicing in a rural community on the act’s effective date; those who previously practiced in rural areas must return to rural practice after leaving for at least three years to qualify.
• Credit may be claimed for up to seven consecutive tax years; a physician who claimed the old credit cannot claim under the new program.
• Certification: The Department of Public Health must certify qualifying physicians before they can claim the credit, and the certificate must be attached to the tax return.
• Reporting and rules: The Department of Public Health will file annual informational reports; the Department of Revenue will adopt rules to administer the program.
• Effective through 2023 (tax years beginning after January 1, 2020, through 2023) unless extended; pre-2023 claimants may continue until their period expires.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation