HB98 Alabama 2021 Session

Summary

Primary Sponsor

Andy WhittRepresentative

Republican

Session

Regular Session 2021

Title

Income tax, certain CARES Act credits and rentals under the CARES Act exempt from individual income taxation, loan forgiveness under CARES further provided for

Summary

HB98 would exclude CARES Act-related payments and loan forgiveness from Alabama taxes and align certain state tax treatment with federal relief.

What This Bill Does

The bill excludes federal CARES Act tax credits or advance refunds from Alabama individual income tax; it also exempts Coronavirus Relief Fund amounts from Alabama income and financial institution taxes. For 2020, CARES-related credits would be excluded from calculations used to determine a federal tax deduction under Alabama law. It provides an exclusion for small business loan forgiveness under CARES (Section 1106) from Alabama income and financial institution taxes, blocks deductibility of related expenses at the state level, and excludes these amounts from federal deduction calculations in Alabama. Additionally, employer payments of qualified education loan principal or interest that are excluded from federal gross income would be excluded from Alabama employee gross income, and the act allows the Department of Revenue to adopt implementing rules with immediate effect.

Who It Affects

• Individual Alabama taxpayers who receive CARES Act tax credits or advance refunds, who would no longer include those amounts in their income for Alabama taxes.
• Taxpayers and financial institutions that would be affected by the treatment of loan forgiveness under CARES (Section 1106), including how it is taxed and deductible.
• Employers and employees involved in CARES education loan provisions, where employer payments on education loans would be excluded from employee Alabama gross income.
• Residents receiving funds from the state Coronavirus Relief Fund, who would be exempt from Alabama income tax on those funds.
• Corporate income taxpayers and financial institutions, due to changes in how forgiveness proceeds and related deductions are treated for Alabama taxes.

Key Provisions

• Exclusion from Alabama individual income tax of federal CARES Act tax credits or advance refunds (I.R.C. § 6428).
• Exclusion from Alabama income tax and financial institution excise tax of amounts received from the Coronavirus Relief Fund; and exclusion for 2020 CARES credits from state income tax deductions.
• Exclusion from Alabama income tax and financial institution excise tax for loan forgiveness under CARES Section 1106; not deductible for state expenses; exclusion from federal deduction calculations under Alabama law.
• Exclusion from Alabama gross income for employer payments of qualified education loan principal/interest to employees to the same extent as federal exclusion; and immediate effective date with Department of Revenue rulemaking authority.

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