HB35 Alabama 2021 Session

Under existing law, amounts received in 2020 as a result of federal tax credits or advance refunds provided under the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, as provided in I.R.C. § 6428, are not excluded from Alabama individual income taxation

Under existing law, cancellation of indebtedness income resulting from the forgiveness of small business loans under Section 1106 of the federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is not excluded from Alabama individual income taxation and may not be excluded from Alabama corporate income taxation and Alabama financial institution taxation

This bill would provide for an exclusion from Alabama individual income taxation for any federal tax credits or advance refunds resulting from the federal Coronavirus Aid, Relief, and Economic Security Act

This bill would provide for an exclusion from Alabama income taxation for small business loans forgiven under the Paycheck Protection Program established by the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act

Relating to income taxes; to provide for an exclusion from Alabama income tax for federal tax credits, advance refunds, or loan forgiveness resulting from the federal Coronavirus Aid, Relief, and Economic Security Act.

Section 1

(a) Any tax credits or advance refund amounts received as a result of the federal Coronavirus Aid, Relief, and Economic Security Act, as provided in I.R.C. § 6428, shall be excluded from Alabama individual income taxation. (b) For taxable year 2020, any tax credits or advance refund amounts received as a result of the federal Coronavirus Aid, Relief, and Economic Security Act, as provided in I.R.C. § 6428, shall also be excluded from any and all calculations in determining a taxpayer's federal income tax deduction pursuant to Section 40-18-15.

Section 2

Any amount of cancellation of indebtedness income resulting from a loan forgiven under Section 1106 of the federal Coronavirus Aid, Relief, and Economic Security Act: (1) Shall be exempt from the financial institution excise tax imposed by Chapter 16 of Title 40 and from the income taxes imposed by Chapter 18 of Title 40, to the same extent as the amount is exempt from the federal income tax. (2) Shall not be considered in determining the deductibility of otherwise deductible expenses, such as payroll, utilities, mortgage interest, and rent, allowed to be paid with the exempt funds, to the same extent as the expenses remain deductible in calculating federal income tax. (3) Shall also be excluded from any and all calculations in determining a taxpayer's federal income tax deduction pursuant to Chapter 16 or Chapter 18 of Title 40.

Section 3

This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.