HB46 Alabama 2025 Session

Updated Feb 23, 2026

Notable

Summary

Primary Sponsor: Ed OliverRepresentative
Republican
Session: 2025 Regular Session
Title: Physicians, rural physicians income tax credit, replace existing credit
Summary: HB46 replaces Alabama's rural physician tax credit with a new four-year credit starting in 2026, while phasing out the old credit and adding certification and reporting requirements.
What This Bill Does
The bill terminates the existing rural physician tax credit on December 31, 2028 unless extended by law for up to five additional years, and allows some physicians who claimed the old credit through 2025 to transition to the new credit for the remainder of that five-year period if eligible. It creates a new rural physician income tax credit of $10,000 per year for tax years 2026–2030, available to physicians who live and practice in defined rural communities. Administration and verification are centralized through the Alabama Statewide Area Health Education Center Program Office, which issues certificates required to claim the credit; the Department of Revenue would handle filing, reporting, and rulemaking, with oversight and evaluation by related boards and commissions.

Who It Affects
Rural physicians who live in and practice medicine in defined rural communities and meet the eligibility criteria, potentially qualifying for the new $10,000/year credit and, for some, transitioning from the old credit.
State agencies and bodies involved in administering and overseeing the program (ASHEC Program Office, Alabama Board of Medical Examiners, Department of Revenue, and the Commission on the Evaluation of Services) which verify eligibility, issue certificates, collect information, and evaluate the program's effectiveness.

Key Provisions
Provision 1: Establishes Division 2 new rural physician credit of $10,000 per tax year for tax years 2026–2030 (four years), with a transitional provision allowing physicians who claimed the old credit through 2025 to claim the new credit for the remainder of the five-year period if eligible; defines rural physician and rural community.
Provision 2: Reorganizes administration and oversight: ASHEC Program Office certifies eligibility; certificates must be submitted with tax returns; Department of Revenue handles reporting and rules; Board of Medical Examiners assists verification; Commission on the Evaluation of Services develops metrics and conducts program evaluation; the old Division 1 credit is repealed by 2030, with effective dates set in the act.

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