HB249 Alabama 2024 Session

Updated Feb 23, 2026

Notable

Summary

Primary Sponsor: Danny GarrettRepresentative
Republican
Session: Regular Session 2024
Title: Income taxes, tax deduction for contributions to an ABLE savings account extended
Summary: HB249 would extend Alabama's income tax deduction for ABLE savings account contributions from 2025 to 2030.
What This Bill Does
Extends the ABLE contribution deduction sunset date to December 31, 2030. Keeps the deduction at up to $5,000 per year for contributions to ABLE accounts, available whether you itemize or not. If a nonqualified withdrawal occurs, the withdrawn amount plus 10% is added back to the taxpayer's income for that year. Rollovers into ABLE accounts are not counted as new deductions to the extent a deduction was claimed for the rollover.

Who It Affects
Alabama individual taxpayers who contribute to ABLE savings accounts, who can claim a deduction up to $5,000 per year (regardless of whether they itemize).
Families or guardians of ABLE account beneficiaries who use ABLE accounts and may face tax consequences if nonqualified withdrawals occur (recapture) or if rollover contributions are involved.

Key Provisions
Extends the ABLE deduction sunset date from December 31, 2025 to December 31, 2030.
Maintains a deduction for contributions to Alabama ABLE accounts up to $5,000 per year per taxpayer, for contributions made on or after January 1, 2021, regardless of itemized status.
Nonqualified withdrawals trigger a tax add-back: withdrawal amount plus 10% of the amount withdrawn is added to the taxpayer's income in the year of withdrawal.
Rollover amounts to an Alabama ABLE account are not treated as new contributions for purposes of the deduction if a deduction has already been claimed for those rollover contributions.
Department of Revenue may adopt rules to administer the section.
Effective date: October 1, 2024.
Sunset continues to apply unless extended by future legislation (December 31, 2030).

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 & Revenue