HB147 Alabama 2022 Session

Summary

Primary Sponsor

Jim CarnsRepresentative

Republican

Session

Regular 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

HB147 would conform Alabama's 2021 federal tax deduction to ignore ARPA credit enhancements and extend filing deadlines for certain business tax returns.

What This Bill Does

For tax year 2021, it changes how the federal income tax deduction is calculated by not counting the ARPA-improved credits (child tax credit, earned income credit, and child/dependent care credit) and instead applying the 2020 IRC rules for those credits. It creates filing extensions for Alabama financial institution excise taxpayers and corporate income taxpayers: a one-month extension after the due date of the corresponding federal return for tax years beginning on or after January 1, 2021, with the extension not delaying the tax payment due date; for tax years beginning 2020 but before 2021, the Department may allow an additional one-month extension upon request and approval. The Department of Revenue may adopt rules to implement these changes, and the act becomes effective immediately after passage.

Who It Affects

• Individual Alabama taxpayers who claim federal child tax credits, earned income credits, or child and dependent care credits, whose state deduction for 2021 would be calculated as if 2020 IRC rules applied rather than the ARPA-expanded rules.
• Financial institution excise taxpayers (banks) and corporate income taxpayers, who would receive a one-month extension to file their Alabama returns after the federal due date (with limited discretionary extensions for 2020-2021) and would still owe any tax by the original due date.

Key Provisions

• Section 1: For tax year 2021, determine the federal income tax deduction for Alabama without ARPA reductions and instead apply the 2020 IRC rules for the credits, effectively allowing the enhanced ARPA credits to be treated as if they were under pre-ARPA law.
• Section 2: Add 40-16-3.1 to allow a one-month filing extension after the federal due date for financial institution excise tax returns (tax years starting on/after 2021) and, for 2020-2021, a possible one-month extension upon request; extendable only to filing, not payment.
• Section 2: Add 40-18-39.1 to allow a one-month filing extension after the federal due date for corporate income tax returns (tax years starting on/after 2021) and, for 2020-2021, a possible one-month extension upon request; extendable only to filing, not payment.
• Section 3: The Department of Revenue may adopt rules to implement the act.
• Section 4: The act becomes effective immediately upon 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