House Bill 342 Alabama 2026 Session

Updated Mar 5, 2026

Notable

Summary

Primary Sponsor: Susan DuBoseRepresentative
Republican
Session: 2026 Regular Session
Title: Taxation; participation in the federal tax credit for individuals making qualified contributions to scholarship granting organizations provided for
Summary: HB342 would have Alabama participate in the federal tax credit program for individuals who donate to scholarship granting organizations, with the state identifying eligible Alabama SGOs and coordinating eligibility for tax years after 2026.
What This Bill Does
The bill elects Alabama to participate in the federal tax credit under 26 U.S.C. §25F for qualified contributions to scholarship granting organizations. The Department of Revenue must annually publish and certify a list of Alabama-based SGOs that meet the federal requirements and are located in Alabama, and it must confirm the state's authority to submit this list to the U.S. Treasury. The DoR may set rules to implement and administer the program. The participation would apply to taxable years beginning after December 31, 2026, with the act taking effect immediately.

Who It Affects
Individual taxpayers in Alabama who make qualified contributions to scholarship granting organizations (they may be eligible for the federal tax credit on their federal tax return).
Scholarship granting organizations located in Alabama that meet the federal requirements (they would be listed by the Department of Revenue as eligible for the credit).

Key Provisions
Alabama voluntarily elects to participate in the federal tax credit established under 26 U.S.C. §25F for individuals who contribute to scholarship granting organizations.
The Department of Revenue shall annually submit to the U.S. Secretary of the Treasury and publish a list of Alabama-based SGOs that meet the §25F requirements and are located in Alabama.
The Department of Revenue shall certify to the U.S. Treasury its authority to submit the list on behalf of Alabama and comply with applicable federal regulations or guidance to ensure eligibility.
The Department of Revenue may establish rules for implementing and administering the act.
The act becomes effective immediately and applies to taxable years beginning after December 31, 2026.

AI-generated summary using openai/gpt-5-nano on Feb 27, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Taxation & Revenue