Senate Bill 225 Alabama 2026 Session

Summary

Primary Sponsor

Andrew JonesSenator

Republican

Session

2026 Regular Session

Title

Income tax; certain compensation by members of the Alabama National Guard, exempt

Summary

SB225 would exempt the first $5,000 of National Guard drill/IDT pay from Alabama state income tax and update the tax code language.

What This Bill Does

Creates a new exemption in Section 40-18-19 for the Alabama National Guard: the first $5,000 of drill pay would be exempt from state income tax. Adds a separate, future exemption beginning January 1, 2027 for the first $5,000 of income from inactive duty training (IDT) under the National Guard, per 37 U.S.C. § 206. The act becomes effective October 1, 2026, with the IDT exemption applying to tax years starting in 2027. Includes nonsubstantive, technical updates to bring the code language into current style and allows the Department of Revenue to adopt rules to implement the provisions.

Who It Affects

• Alabama National Guard members who earn drill pay or inactive duty training income, who would have up to $5,000 of that income exempt from Alabama state income tax (IDT exemption begins in 2027).
• Alabama Department of Revenue and payroll administrators/employers who would implement the exemption and adjust withholding, forms, and administrative rules accordingly.

Key Provisions

• Exempts the first $5,000 of drill pay earned by Alabama National Guard members from state income tax (Section 40-18-19).
• Beginning January 1, 2027, exempts the first $5,000 of income from inactive duty training (IDT) for Alabama National Guard members (per 37 U.S.C. § 206).
• Effective date of the act: October 1, 2026; IDT exemption applies to tax years starting in 2027.
• Includes nonsubstantive, technical revisions to update the code language to current style and assigns rulemaking authority to the Department of Revenue to implement the 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