SB49 Alabama 2023 Session

Updated Feb 22, 2026

Summary

Primary Sponsor: Arthur OrrSenator
Republican
Session: Regular Session 2023
Title: Relating to income taxes; to amend Section 40-18-19, Code of Alabama 1975, as last amended by Act 2022-292, Act 2022-294, and Act 2022-297 of the 2022 Regular Session of the Legislature; to increase the exemption for taxable retirement income for individuals who are 65 years of age or older.
Summary: SB49 would raise the Alabama state income tax exemption for taxable retirement income for people age 65 and older from $6,000 to $10,000 (phased in: $6,000 in 2023, $10,000 from 2024 onward).
What This Bill Does
It amends Section 40-18-19 to increase the retirement income exemption for residents 65 or older. The exemption still applies only to eligible individuals, and the change is phased in over two years. The rest of the existing exemptions in the same section remain, including other retirement income sources and tax rules for specific groups.

Who It Affects
Individuals 65 years of age or older who have taxable retirement income in Alabama; the amount exempt from state income tax will go from $6,000 to $10,000 starting in 2024 (with $6,000 in 2023).
All other Alabama taxpayers (including those under 65) who do not claim this exemption will see no change to their retirement income tax status.

Key Provisions
Beginning January 1, 2023, the exemption for taxable retirement income for individuals 65+ is $6,000.
Beginning January 1, 2024, the exemption increases to $10,000 for taxable retirement income for individuals 65+.
The exemption applies to various sources of retirement income as defined in Section 40-18-19, including pensions, annuities, and other qualifying retirement payments.
The exemption is claimed by an individual taxpayer (per person), not per household.
The act becomes effective on the first day of the third month after passage and Governor approval.

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, income tax, exemption for taxable retirement income increased