HB211 Alabama 2021 Session

Updated Feb 22, 2026

Summary

Primary Sponsor: Kyle South
Republican
Co-Sponsors: Paul W. Lee Phillip Pettus
Session: Regular Session 2021
Title: Covid-19 Recovery Capital Credit Protection Act of 2021, created, employment and wage requirements for qualifying projects extended, compensation amounts for exemption purposes increased, Sec. 40-18-19.1 am'd.
Summary: HB211 creates the COVID-19 Recovery Capital Credit Protection Act of 2021, extending and shielding pandemic-affected capital credit projects and increasing tax exemptions for severance and unemployment benefits.
What This Bill Does
It extends the initial employment and wage requirements for approved capital credit projects placed into service in 2019–2021 to up to two years if affected by COVID-19. For 2020–2021, failures to meet these requirements won’t disqualify projects and forfeiture penalties won’t apply. It raises the tax exemption for severance, unemployment compensation, termination pay, or income from a supplemental income plan from $25,000 to $50,000 per tax year (limited to actual payments) and exempts CARES Act unemployment benefits for 2020–2021; misconduct can still disqualify the exemption. It changes the penalty schedule starting in 2022, and the Department of Revenue will issue rules to implement the act, which takes effect immediately after passage.

Who It Affects
Approved project entities in Alabama's Capital Credit Program, with extended time to meet employment and wage requirements and relief from penalties for 2020–2021.
Employees receiving severance pay, unemployment compensation, termination pay, or income from a supplemental income plan, who gain a higher tax exemption (up to $50,000 per year) and CARES Act unemployment benefits exemption for 2020–2021; misconduct can revoke the exemption.
Alabama Department of Revenue, which must adopt rules and administer the act.

Key Provisions
Extends the initial employment and wage requirement period to up to two years for projects placed into service in 2019–2021 that were affected by COVID-19.
For 2020–2021, failures to meet employment and wage requirements do not disqualify the project; forfeiture penalties do not apply for those years.
Post-2021 penalties start at 100% of the capital credits claimed in the prior year, with a 20% reduction for each prior year within a five-year forfeiture period.
Tax exemptions for severance, unemployment compensation, termination pay, or income from a supplemental income plan increase from $25,000 to $50,000 per tax year, limited to the actual payment amount; CARES Act unemployment benefits for 2020–2021 are exempt.
Misconduct disqualifies the exemption, and the Department of Revenue will issue rules to implement the act; the act becomes effective immediately upon passage.

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