HB228 Alabama 2025 Session

Summary

Primary Sponsor

Jerry StarnesRepresentative

Republican

Session

2025 Regular Session

Title

Income tax, to exempt certain income earned by members of the Alabama National Guard

Summary

HB228 would exempt the first $5,000 of inactive duty training pay for Alabama National Guard members from Alabama state income tax starting in 2026.

What This Bill Does

The bill adds a new exemption to state income tax for resident taxpayers. It specifically excludes the first $5,000 of income a member of the Alabama National Guard earns from inactive duty training (IDT) under 37 U.S.C. § 206. The exemption is added to Section 40-18-19 and becomes effective with the act, but applies for tax years beginning January 1, 2026. The Department of Revenue would implement rules as needed to administer this exemption.

Who It Affects

• Resident members of the Alabama National Guard who receive IDT pay; they would have up to $5,000 of that income exempt from Alabama state income tax starting in 2026.
• State and local government revenue, which could be affected by a reduction in state income tax collections from qualifying Guard members.

Key Provisions

• Adds a new exemption: the first $5,000 of taxable income earned from inactive duty training by Alabama National Guard members is exempt from state income tax for resident taxpayers.
• Applies specifically to IDT income described in 37 U.S.C. § 206, and is added to Section 40-18-19 of the Alabama Code.
• Effective date: the act becomes law October 1, 2025; the IDT exemption starts for tax years beginning January 1, 2026.
• The Department of Revenue may enact rules necessary to implement and administer the exemption.

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