SB7 Alabama 2021 Session

Summary

Primary Sponsor

Chris ElliottSenator

Republican

Session

Regular Session 2021

Title

Coronavirus Aid, Relief, and Economic Security Act, any credits, refunds or loan forgivneness received from, excluded from Alabama taxation

Summary

Alabama would exclude federal CARES Act credits, refunds, and loan forgiveness from state taxes and adjust related deductions.

What This Bill Does

It excludes CARES Act tax credits and advance refunds from Alabama individual income tax. For 2020, it also excludes these credits/refunds from calculations used to determine the federal income tax deduction under Alabama law. It also exempts CARES Act loan forgiveness from Alabama income tax and from the financial institution tax, and it says those funds should not be used to reduce the deductibility of expenses or affect federal deduction calculations. The changes take effect immediately after the governor signs it.

Who It Affects

• Alabama individual income taxpayers who receive CARES Act tax credits or advance refunds, who would not owe Alabama tax on those amounts and would have those amounts excluded from certain federal deduction calculations.
• Taxpayers with CARES Act loan forgiveness (including individuals and financial institutions) whose forgiven amounts are exempt from Alabama taxes and from related deduction considerations.

Key Provisions

• Excludes CARES Act tax credits and advance refund amounts from Alabama individual income taxation.
• For taxable year 2020, excludes CARES Act credits or advance refunds from calculations determining the federal income tax deduction under Alabama law (Section 40-18-15).
• Loans forgiven under the CARES Act are exempt from Alabama income tax (Chapter 18) and from the financial institution tax (Chapter 16) to the same extent as federal tax exemption.
• Forgiven loan amounts shall not be considered in determining the deductibility of otherwise deductible expenses (e.g., payroll or rent) paid with exempt funds, and shall not be counted in calculating federal deductions under Alabama law.
• The act becomes effective immediately following its passage and approval by the Governor.

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

Subjects

Taxation