SB102 Alabama 2023 Session

Summary

Primary Sponsor

Arthur OrrSenator

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

SB102 redefines who can receive the 100% Alabama income tax deduction for health insurance premiums by setting income and employer-size limits, and extends the deduction to employer-paid premiums with a time-limited credit cap.

What This Bill Does

Defines qualifying employees as Alabama residents who work for qualifying employers, earn no more than $50,000 in wages for the tax year, and report no more than $75,000 of Alabama adjusted gross income (or $150,000 if married filing jointly). Defines qualifying employers as those with fewer than 2550 employees. For tax years beginning after December 31, 2023, it allows qualifying employees to deduct 100% of health insurance premiums they pay as part of an employer-provided plan, in addition to other deductions. It also allows qualifying employers to deduct 100% of health insurance premiums they pay on behalf of qualifying employees making less than $75,000 annually. The program has a $5 million annual cap on tax credits and runs from January 1, 2024 to December 31, 2028 unless extended.

Who It Affects

• Qualifying employees: Alabama resident workers who earn at or below $50,000 in wages and report no more than $75,000 (or $150,000 if married filing jointly) of Alabama adjusted gross income; they can deduct 100% of health insurance premiums paid as part of an employer-provided plan.
• Qualifying employers: Employers with fewer than 2550 employees; they can deduct 100% of health insurance premiums they pay on behalf of qualifying employees making under $75,000 per year.

Key Provisions

• Defines qualifying employees with wage and AGI caps and ties eligibility to employment by qualifying employers.
• Defines qualifying employers as those with fewer than 2550 employees.
• Authorizes a 100% deduction for qualifying employees for premiums paid under an employer-provided health insurance plan, in addition to other deductions.
• Authorizes a 100% deduction for qualifying employers for premiums paid on behalf of qualifying employees earning under $75,000.
• Imposes an annual cap of $5,000,000 on tax credits under this section.
• Provides effective period: January 1, 2024 through December 31, 2028, unless extended.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Income tax, qualifying employers and employees authorized tax deduction for amounts paid for health insurance premiums, revised.