SB351 Alabama 2021 Session

Summary

Primary Sponsor

Donnie ChesteenSenator

Republican

Session

Regular Session 2021

Title

Taxation, military, state income tax deduction for military pay for certain Alabama taxpayers not residing in the state who are members of the armed forces

Summary

SB351 would create a state income tax deduction for military pay and allowances for Alabama taxpayers not residing in Alabama who serve in active duty or reserve components (including Space Force) or the Alabama National Guard, when stationed outside the state.

What This Bill Does

It allows a deduction on Alabama income tax returns for military pay and allowances that are not already deductible or excludable for the tax year, but only for pay earned while stationed outside Alabama; pay earned while stationed in Alabama cannot be deducted. Recipients must annually certify their residence status to the Alabama Department of Revenue. The Alabama Department of Revenue would adopt rules to implement and enforce the deduction.

Who It Affects

• Alabama taxpayers not currently residing in Alabama who serve in active duty or reserve components (including Space Force) or the Alabama Army National Guard or Alabama Air National Guard, and are stationed outside Alabama, who would be able to claim the deduction for eligible military pay and allowances.
• The Alabama Department of Revenue, which would administer the program, require annual residence certifications, and issue rules to implement and enforce the deduction.

Key Provisions

• Creates a state income tax deduction for military pay and allowances for qualifying Alabama taxpayers not residing in Alabama, for pay earned during the taxable year while stationed outside the state, provided the pay is not otherwise deductible or excludable for state purposes.
• The deduction cannot be claimed for military pay and allowances received while the taxpayer is stationed in Alabama.
• Taxpayers claiming the deduction must annually certify their current residence status to the Alabama Department of Revenue.
• The Alabama Department of Revenue must adopt rules to implement and enforce the deduction.
• The act becomes effective for taxable years beginning after December 31, 2021.

AI-generated summary using openai/gpt-5-nano on Feb 23, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Revenue Department