SB2 Alabama 2022 1st Special Session

Summary

Primary Sponsor

Dan RobertsSenator

Republican

Session

First Special Session 2022

Title

Taxation, income tax, exclusion of enhanced federal child tax credits from American Rescue Plan Act from calculation of federal income tax deduction for tax year 2021, to provide an extension of the due date for certain taxpayers, Secs. 40-16-3.1, 40-18-39.1 added.

Summary

The bill would align Alabama's 2021 tax deduction rules with pre-ARPA federal rules on enhanced credits and add a one-month filing extension for certain corporate and financial-institution taxes.

What This Bill Does

For tax year 2021, the federal income tax deduction for individual Alabama taxpayers would be calculated without ARPA's increased credits, using the 2020 Internal Revenue Code as the reference. It creates a one-month extension after the federal due date for filing Alabama financial institution excise tax returns and corporate income tax returns for tax years beginning after January 1, 2021, with the extension not delaying payment. For tax years beginning between January 1, 2020 and January 1, 2021, the Department of Revenue may grant an additional one-month extension upon request and approval. The Department may adopt rules to implement these changes, and the act becomes effective immediately upon passage.

Who It Affects

• Individual Alabama taxpayers: their 2021 federal income tax deduction will be calculated as if ARPA-enhanced credits did not exist, potentially reducing the impact of those credits on Alabama taxes.
• Alabama financial institution excise taxpayers and corporate income taxpayers: they would receive a one-month filing extension after the federal due date to file their Alabama returns, with extensions not delaying payment; DoR may also grant an additional extension for certain prior-year periods.

Key Provisions

• For tax year 2021, determine the federal income tax deduction without considering ARPA reductions, using the 2020 IRC as the reference for credits like the child tax credit, earned income credit, and child and dependent care credit.
• Add Sections 40-16-3.1 and 40-18-39.1 to allow a one-month extension after the due date of the corresponding federal return for Alabama financial institution excise tax returns and Alabama corporate income tax returns for tax years beginning on or after January 1, 2021; the extension does not postpone payment.
• For tax years beginning in 2020 but before January 1, 2021, the department may allow an additional one-month extension after the federal due date upon request and approval.
• The Department of Revenue may adopt rules to implement the act, and the act becomes 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