Hearing
Senate Finance and Taxation Education (Senate) Hearing
Finance and Taxation at 10:00:00
HB407 Alabama 2024 Session
Updated Feb 23, 2026
Notable
Summary
- Primary Sponsor
Phillip PettusRepresentativeRepublican- Session
- Regular Session 2024
- Title
- Relating to Income Taxes; to amend the definition of gross income as relates to overtime income
- Summary
HB407 would temporarily exclude overtime pay under the federal Fair Labor Standards Act from Alabama state income tax for a limited period.
What This Bill DoesIt changes the definition of gross income to exempt overtime compensation from state income tax. The exemption runs from the act’s effective date (October 1, 2024) through June 30, 2025, with related tax-year applicability. It also requires employers to report overtime pay totals and the number of affected employees to the Department of Revenue, and directs data sharing with the Legislature and the Department of Finance.
Who It Affects- Full-time hourly wage-paid employees who earn overtime, whose overtime pay would be exempt from Alabama gross income during the exemption window.
- Employers who pay overtime; they must report overtime compensation and affected employee counts to the Department of Revenue on a set schedule.
Key ProvisionsAI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.- Overtime compensation paid under the U.S. Fair Labor Standards Act is exempt from gross income for Alabama state income tax.
- The exemption becomes effective October 1, 2024 and remains available through June 30, 2025, applying to tax years beginning after December 31, 2023 and ending before June 30, 2025.
- For employers under the National Railway Labor Act, the exemption also applies to hourly component overtime as defined in applicable collective bargaining agreements.
- Employers must submit to the Department of Revenue the total overtime compensation paid to full-time hourly employees and the number of employees paid, with specific deadlines starting January 31, 2024 for 2023 data and monthly/quarterly thereafter.
- The Department of Revenue must report collected data to the Legislative Services Agency—Fiscal Division and the Department of Finance within 30 days after the data due date.
- The Department may adopt rules to administer these provisions.
- Subjects
- Taxation & Revenue
Bill Actions
H
Enacted
H
Enacted
S
Signature Requested
H
Delivered to Governor
H
Enrolled
H
Ready to Enroll
H
Ready to Enroll
S
Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 945
S
Gudger motion to Adopt - Adopted Roll Call 944 QFJS515-1
S
Gudger 2nd Amendment Offered QFJS515-1
S
Gudger motion to Adopt - Adopted Roll Call 943 J236NFY-1
S
Gudger 1st Amendment Offered J236NFY-1
S
Gudger motion to Table - Adopted Voice Vote F7YADCD-1
S
Finance and Taxation Education 1st Amendment Offered F7YADCD-1
S
Third Reading in Second House
S
Read for the Second Time and placed on the Calendar
S
Reported Out of Committee Second House
S
Finance and Taxation Education 1st Amendment F7YADCD-1
S
Pending Senate Finance and Taxation Education
S
Read for the first time and referred to the Senate Committee on Finance and Taxation Education
H
Engrossed
H
Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 638
H
Motion to Adopt - Adopted Roll Call 637 HIB9668-1
H
Pettus 1st Amendment Offered HIB9668-1
H
Motion to Adopt - Adopted Roll Call 636 UZBFGXD-1
H
Ways and Means Education Engrossed Substitute Offered UZBFGXD-1
H
Third Reading in House of Origin
H
Read for the Second Time and placed on the Calendar
H
Reported Out of Committee House of Origin from House Ways and Means Education UZBFGXD-1
H
Ways and Means Education 1st Amendment QBDY411-1
H
Pending House Ways and Means Education
H
Read for the first time and referred to the House Committee on Ways and Means Education
Calendar
Hearing
House Ways and Means Education (House) Hearing
Room 200 at 09:30:00
Bill Text
Votes
Motion to Read a Third Time and Pass as Amended - Roll Call 638
Yes
103
Motion to Adopt - Roll Call 637 HIB9668-1
Yes
102
Absent
1
Motion to Adopt - Roll Call 636 UZBFGXD-1
Yes
102
Absent
1
Third Reading in House of Origin
Yes
102
Absent
1
Motion to Read a Third Time and Pass as Amended - Roll Call 945
Yes
31
Absent
4
Gudger motion to Adopt - Roll Call 944 QFJS515-1
Yes
31
Absent
4
Gudger motion to Adopt - Roll Call 943 J236NFY-1
Yes
31
Absent
4
Third Reading in Second House
Yes
31
Absent
4
Documents
Bill Text (Enrolled)
HB407 Alabama 2024 Session - Enrolled
Bill Text (Engrossed)
HB407 Alabama 2024 Session - Engrossed
Bill Text (Introduced)
HB407 Alabama 2024 Session - Introduced
Amendment
House Ways and Means Education Reported Out of Committee House of Origin
Amendment
House Ways and Means Education Ways and Means Education 1st Amendment
Amendment
House Motion to Adopt - Adopted Roll Call 637
Amendment
Senate Finance and Taxation Education Finance and Taxation Education 1st Amendment
Amendment
Senate Gudger motion to Adopt - Adopted Roll Call 944
Amendment
Senate Gudger motion to Adopt - Adopted Roll Call 943
Fiscal Note
Fiscal Note - As Introduced
Fiscal Note
Fiscal Note - As Passed First Chamber Committee
Fiscal Note
Fiscal Note - As Passed First Chamber
Fiscal Note
Fiscal Note - As Passed Second Chamber Committee
Source: Alabama Legislature