HB555 Alabama 2025 Session

Summary

Primary Sponsor

Laura HallRepresentative

Democrat

Session

2025 Regular Session

Title

Establishes the Single Parent Support Income Tax Credit

Summary

HB555 would create a state income tax credit for eligible single parents, providing up to $5,000 per year for the first five years of a child's life, with a $5 million annual cap and refundable treatment if tax liability is lower than the credit.

What This Bill Does

Defines who counts as a single parent (unmarried, not cohabiting, with custody of a child). Eligible single parents who carried a pregnancy to term can claim a $5,000 tax credit for each of the first five years of the child’s life, applicable to tax years 2026–2030. If the credit exceeds the parent’s tax liability, the difference is refunded, and the credit cannot be transferred or sold; the program has a $5 million per-year cap. The Department of Revenue will administer the credit, require specific documentation, review applications, and impose a $500 fraud penalty, with annual fiscal reports to the Legislature and an effective date of October 1, 2025.

Who It Affects

• Eligible single parents who carried a pregnancy to term and have legal and physical custody of a child, who file Alabama state taxes and could receive up to $5,000 per year for the first five years of the child's life (refundable if tax liability is lower).
• Department of Revenue and state staff who implement and oversee the program (process applications, verify eligibility, enforce rules, handle penalties for fraud, and report to the Legislature).

Key Provisions

• Creates the Single Parent Support Tax Credit.
• Defines 'single parent' as unmarried, not cohabiting, with custody of a child.
• Provides $5,000 tax credit per tax year for the first five years of the child's life for tax years 2026–2030.
• Credit is refundable if it exceeds tax liability; non-transferable; annual cap of $5,000,000 per tax year.
• Requires pre-claim documentation: medical documentation, state law documentation, and other verifiable evidence requested by the Department.
• Department of Revenue to adopt rules, create a streamlined application portal, and run a public awareness campaign.
• Department to review applications for eligibility and impose a $500 fraud penalty.
• Department to report fiscal impact and recommended adjustments to the Legislature before each regular session.
• Provisions are severable; effective date is 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