Senate Bill 245 Alabama 2026 Session

Summary

Primary Sponsor

Dan RobertsSenator

Republican

Session

2026 Regular Session

Title

Income Taxes, tax deduction for members of a Health Care Sharing Ministry for certain health care sharing expenses

Summary

SB245 would create a tax deduction for Alabama residents who are members of Health Care Sharing Ministries, placing their treatment on par with health insurance premiums and HSAs beginning in 2027.

What This Bill Does

Starting with tax year 2027, qualified individuals who are members of a Health Care Sharing Ministry can deduct the total amount of qualified health care sharing expenses they paid from their Alabama adjusted gross income. The deduction must be claimed on the state tax return, and the Department of Revenue can require information to calculate it. If a qualified health care sharing contribution is used to pay medical expenses and no deduction is taken, that contribution will not be treated as taxable income. The Department of Revenue will adopt rules to implement the act, and the measure becomes effective October 1, 2026.

Who It Affects

• Qualified individuals who are members of Health Care Sharing Ministries, who would be able to claim a deduction for qualified health care sharing expenses on their Alabama tax return starting in 2027.
• Alabama Department of Revenue and Health Care Sharing Ministries, which will administer, implement, and enforce the deduction program and related reporting requirements.

Key Provisions

• Establishes the Health Care Sharing Ministries Tax Parity Act.
• Defines key terms: Health Care Sharing Ministry, Qualified Health Care Sharing Expenses, and Qualified Individual.
• Allows a deduction from adjusted gross income for tax years beginning in 2027 equal to the total qualified health care sharing expenses paid during the year.
• Requires the deduction to be claimed on the state tax return and permits the Department of Revenue to request information to calculate the deduction.
• Provides that qualified health care sharing contributions used for medical expenses with no deduction taken are not taxable income.
• Authorizes the Department of Revenue to adopt rules to implement and administer the act.
• Effective date: October 1, 2026.

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