HB273 Alabama 2023 Session

Summary

Primary Sponsor

Jamie KielRepresentative

Republican

Session

Regular Session 2023

Title

Relating to income taxes; to amend Section 40-18-15.3, Code of Alabama 1975, to revise the qualifications for employees and employers to receive the income tax deduction for health insurance premiums paid.

Summary

HB273 would let certain Alabama employees and small employers deduct 100% of health insurance premiums from income for taxes, with eligibility limits and a sunset based on time or spending.

What This Bill Does

It defines who qualifies as a qualifying employee and a qualifying employer with specific income and employment thresholds. Qualifying employees can deduct 100% of premiums paid for employer-provided health insurance. Qualifying employers can deduct 100% of premiums they pay for those plans on behalf of qualifying employees earning under $75,000 from that employer. The deduction starts January 1, 2024 and ends no later than December 31, 2028 or when total tax expenditures reach $10 million.

Who It Affects

• Qualifying employees: Alabama residents who work for qualifying employers, earn no more than $50,000 in wages, and report no more than $75,000 adjusted gross income (or $150,000 if married filing jointly) on their Alabama tax return.
• Qualifying employers: Employers with fewer than 2550 employees who provide health insurance to qualifying employees.

Key Provisions

• Defines qualifying employees and qualifying employers with specific income and employment thresholds.
• Authorizes a 100% deduction of health insurance premiums paid by qualifying employees as part of an employer-provided plan.
• Authorizes a 100% deduction of health insurance premiums paid by qualifying employers on behalf of qualifying employees earning under $75,000 from that employer.
• Effective date and sunset: deductions begin January 1, 2024 and end the earlier of December 31, 2028 or when cumulative expenditures reach $10 million.
• Expenditure categories: corporate income tax small business health insurance premiums and individual income tax small employer/employee health insurance premiums.

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 and revenue, qualifications for income tax deduction on health insurance premiums amended