SB379 Alabama 2021 Session

Summary

Primary Sponsor

Dan Roberts Senator

Republican

Co-Sponsors

Chris ElliottGarlan GudgerArthur Orr

Session

Regular Session 2021

Title

Taxation, exempt federal tax credits and restaurant revitalization grants received under American Rescue Plan Act from state taxation, to provide filing extension for certain taypayers, Revenue Dept. may adopt rules, Secs. 40-16-3.1, 40-18-39.1 added.

Description

Under existing law, amounts received as federal child tax credits under Internal Revenue Code Section 24, as federal earned income tax credits under Internal Revenue Code Section 32, or as child and dependent care tax credits under Internal Revenue Code Section 21 reduce the federal income tax deduction allowed for Alabama individual taxpayers.

Under existing law, the enhanced, one-time federal expansion of these credits under the American Rescue Plan, which will be granted to individual taxpayers in the tax year ending December 31, 2021, would increase Alabama individual taxable income for the 2021 tax year.

This bill would create a one-time allotment in the state income tax law to conform with the federal intent behind the income tax credit expansion within the American Rescue Plan and would provide that the reduction in the individual federal income tax deduction associated with the federal child tax credits, earned income tax credits, and child and dependent care tax credits for the tax year ending on December 31, 2021, would be calculated as if the individual paid the federal income tax that would otherwise have been paid under the provisions of the Internal Revenue Code in effect on December 31, 2020.

Under existing law, amounts received as a result of federal restaurant revitalization grants under Section 5003 of the American Rescue Plan Act are not excluded from Alabama income taxation.

This bill would conform Alabama income taxation law with the federal exclusion of restaurant revitalization grants from gross income, and would additionally conform with the federal provisions relating to the deductibility of related expenses.

Under current law, the due date for a corporate income tax return and financial institution excise tax return is the same as the corresponding federal income tax return.

This bill would provide for a one-month extension of the due date of tax returns for Alabama financial institution excise taxpayers and corporate income taxpayers in tax years beginning on or after January 1, 2021, in order to provide taxpayers with additional time to calculate their tax liabilities under new federal and state tax law, without incurring a late filing penalty. The filing extension would not extend the due date of the tax liability by these taxpayers.

This bill would also authorize the Department of Revenue, in its discretion, to extend the due date of tax returns for Alabama financial institution excise taxpayers and corporate income taxpayers by one month in tax years beginning on or after January 1, 2020, but before January 1, 2021.

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Subjects

Taxation