House Bill 342 Alabama 2026 Session

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 for donations to scholarship granting organizations, with annual reporting and eligibility certification to the federal government for tax years beginning after December 31, 2026.

What This Bill Does

The bill allows Alabama to participate in the federal tax credit program for donations to scholarship granting organizations. Each year, the Department of Revenue would publish a list of all Alabama-based SGOs that meet the federal requirements and are located in Alabama, and certify to the U.S. Secretary of the Treasury the department's authority to submit the list on Alabama's behalf. This participation would apply to tax years beginning after December 31, 2026, and the act takes effect immediately without Alabama agencies adopting implementing rules.

Who It Affects

• Alabama taxpayers who donate to scholarship granting organizations could be eligible for the federal tax credit, subject to federal rules and the SGOs listed by the state.
• Scholarship granting organizations operating in Alabama would need to meet federal requirements to be listed as eligible, and would be affected by annual reporting and eligibility determinations conducted by the Department of Revenue.

Key Provisions

• The State of Alabama voluntarily elects to participate in the federal tax credit established under Section 70411 of Pub. L. No. 119-21 for individuals who make qualified contributions to scholarship granting organizations.
• The Department of Revenue must annually submit to the U.S. Secretary of the Treasury and publish on its website a list of Alabama-based SGOs that meet the federal requirements and are located in Alabama, and certify the department's authority to submit the list on behalf of the state.
• The act becomes effective immediately, and no state department has authority to adopt rules to implement this act.

AI-generated summary using openai/gpt-5-nano on Feb 12, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation & Revenue