HB52 Alabama 2025 Session

Updated Feb 23, 2026

Notable

Summary

Primary Sponsor: Danny GarrettRepresentative
Republican
Session: 2025 Regular Session
Title: Income Taxes; to make technical changes to the funding provisions of the CHOOSE Act credits and increase funding, and to extend the sunset date for deductions for ABLE contributions.
Summary: HB52 extends the ABLE deduction to 2030 and strengthens CHOOSE Act funding for tax credits.
What This Bill Does
Extends the Alabama ABLE savings account deduction through December 31, 2030, allowing a deduction up to $5,000 per year with rules on nonqualified withdrawals and rollovers. Creates the CHOOSE Act Fund in the State Treasury and guarantees minimum funding of $100 million per year starting in fiscal year 2026, with annual deposits by June 1 and a funding cap of up to $150 million for eligible families with income up to 300% of the federal poverty level. Allows additional funding if demand requires it, based on high prior-year usage (90% or more of funds expended). Sets rules for budget, carryover limits (no more than $500 million carried over), and reversion of excess funds to the Education Trust Fund; includes an effective date of June 1, 2025.

Who It Affects
Alabama taxpayers who contribute to ABLE accounts, who could claim a deduction of up to $5,000 per year through 2030.
Parents or guardians of eligible CHOOSE Act students, particularly those with household income at or below 300% of the federal poverty level, who are affected by the CHOOSE Act funding and potential tax credits.

Key Provisions
Extends the ABLE deduction for contributions to ABLE accounts through December 31, 2030, with a $5,000 annual limit and rules for nonqualified withdrawals and rollovers.
Creates the CHOOSE Act Fund in the State Treasury and guarantees at least $100 million in funding annually starting in fiscal year 2026, with a $100 million deposit by June 1, 2026, and ongoing deposits thereafter.
From fiscal year 2027 onward, deposits in the CHOOSE Act Fund are guided by gross income tax receipts and capped at $150 million per year for eligible families with AGI up to 300% of the federal poverty level; the Legislature can increase funding if demand requires it (based on 90% expenditure of funds).
Funds in the CHOOSE Act Fund stay within the fund for tax credits, with a cap on carryover of $500 million; excess funds revert to the Education Trust Fund as nonrecurring revenue; effective date is June 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