HB379 Alabama 2025 Session

Updated Feb 23, 2026

Notable

Summary

Primary Sponsor: Danny GarrettRepresentative
Republican
Session: 2025 Regular Session
Title: Income tax, remote workers exempt under defined circumstances
Summary: HB379 would exempt certain nonresident workers from Alabama income tax on wages earned in Alabama under defined conditions and set payroll withholding rules for those workers.
What This Bill Does
It creates a nonresident income tax exemption for wages earned in Alabama if the worker is in Alabama for 30 days or fewer in a calendar year and meets other criteria (works in more than one state, not a professional athlete/entertainer/public figure, and their home state provides a similar exclusion or exemption). If these conditions aren’t met, employers must withhold Alabama tax for every day the employee performs duties in Alabama after the 30-day threshold. There is also a temporary emergency/disaster-work withholding exemption, and the bill requires time-and-attendance data to determine where work is performed; the Department of Revenue will adopt related rules. The changes apply to tax years starting in 2026, with the act itself effective October 1, 2025.

Who It Affects
Nonresident individuals who work in Alabama for 30 days or fewer in a calendar year and meet all specified conditions (including working in multiple states and not being a professional athlete, entertainer, or public figure).
Employers in Alabama that hire nonresident workers; they may not withhold Alabama tax on exempt wages, but must withhold after the 30-day threshold if the exemption doesn’t apply.
Residents and home states of nonresident workers, because the exemption depends on whether the worker’s home state provides a similar exclusion or tax relief.

Key Provisions
Adds a new nonresident exemption provision (40-18-2.2) with conditions for wages earned in Alabama to be exempt from Alabama income tax.
If a nonresident’s work in Alabama lasts 30 days or fewer and other conditions are met (multi-state work, not a professional athlete/entertainer/public figure, and home state offers a similar exclusion or exemption), Alabama tax on that income is exempt; otherwise, Alabama withholding applies for days worked in Alabama after the threshold.
Provides a temporary disaster/emergency-work exception where withholding is not required, and clarifies this does not narrow other exemptions under state law.
Requires time-and-attendance data to determine where work is performed and directs the Department of Revenue to adopt implementing rules; the tax provisions take effect for tax years beginning in 2026 (act effective October 1, 2025).

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