House Bill 445 Alabama 2026 Session

Summary

Primary Sponsor

Mike ShawRepresentative

Republican

Session

2026 Regular Session

Title

Relating to gross income; to amend Section 40-18-14, Code of Alabama 1975; to exclude difficulty of care payments from gross income.

Summary

HB445 would exclude difficulty-of-care payments to individual in-home care providers under Medicaid HCBS Waivers from Alabama gross income for state income tax, effective for tax years starting in 2027.

What This Bill Does

HB445 amends Section 40-18-14 to exclude payments made to individual care providers under Medicaid Home and Community-Based Services Waiver programs from gross income. It adds difficulty-of-care payments, as allowed under federal law, to the list of items exempt from gross income. The bill sets when the changes take effect and authorizes the Department of Revenue to adopt rules to administer the provision.

Who It Affects

• In-home care providers who receive payments under Medicaid HCBS Waiver programs; those payments would not be counted as gross income for Alabama state tax purposes.
• Employers and payroll administrators in Alabama; they would face new reporting requirements related to overtime compensation data and related information to the Department of Revenue.

Key Provisions

• Adds an exemption to gross income for payments to individual care providers under Medicaid HCBS Waiver programs (designated as difficulty-of-care payments) to the extent they are excludable under federal law.
• Sets effective dates: applies to tax years beginning on or after January 1, 2027; the act becomes effective October 1, 2026; authorizes the Department of Revenue to adopt rules to administer the provision.

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