HB86 Alabama 2021 Session

Summary

Primary Sponsor

Arnold MooneyRepresentative

Republican

Session

Regular Session 2021

Title

Taxation, CARES Act, exempts Alabama income tax relating to the coronavirus pandemic

Summary

HB86 would exclude CARES Act-related tax credits, refunds, PPP loan forgiveness, and state relief funds from Alabama income taxes and related taxes, effective immediately.

What This Bill Does

It creates Alabama tax exclusions for federal CARES Act tax credits, advance refunds, and similar future pandemic relief. It excludes PPP loan forgiveness from Alabama income tax and from the financial institution excise tax, and allows related expenses paid with those exempt funds to be deductible for Alabama tax purposes. It also exempts state Coronavirus Relief Funds from being counted as income for Alabama taxes, and extends similar exclusions to employee education loan benefits and 2020 federal deduction calculations.

Who It Affects

• Alabama individual income taxpayers who would have to pay tax on CARES Act credits/refunds, state relief funds, or related items, as well as those impacted by changes to 2020 deduction calculations.
• Banks, lenders, employers, and businesses involved in CARES Act programs (such as PPP loan forgiveness and related employee benefits), who would see exemptions from certain taxes and changes to how related expenses are treated for Alabama taxes.

Key Provisions

• Excludes federal CARES Act tax credits or advance refunds (and any similar future acts) from Alabama individual income tax.
• For 2020, excludes CARES Act tax credits or advance refunds from calculations determining the taxpayer's federal tax deduction under Alabama law.
• Excludes from Alabama income tax and financial institution excise tax the forgiveness of small business loans under the PPP and treats related expenses as deductible at the Alabama level to the same extent as federal deductions.
• Excludes from Alabama taxes the cancellation of indebtedness income from PPP loan forgiveness, and prohibits those amounts from being included in federal deduction calculations; also mirrors federal treatment for related deductions.
• Exempts any amount received from state Coronavirus Relief Funds from being counted as income for Alabama income tax and financial institution excise tax purposes.
• Effective immediately after 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

Taxation