House Bill 115 Alabama 2026 Session

Summary

Primary Sponsor

Ed OliverRepresentative

Republican

Session

2026 Regular Session

Title

Physicians, rural physicians income tax credit, replace existing credit

Summary

HB115 reorganizes Alabama's rural physician tax credits by ending the old program in 2026 and creating a new credit starting in 2027 with higher amounts and new eligibility rules.

What This Bill Does

It moves up the termination date of the existing rural physician tax credit to the end of 2026 and allows 2026 claimants to transition to the new credit for the remaining five-year period if eligible. It creates a new rural physician tax credit for tax years 2027 through 2031 worth 10,000 dollars per year, with eligibility limited to physicians who live in and practice in rural communities and generally allowed to claim the credit for up to four tax years, plus transitional provisions for those who previously claimed the old credit. It defines what counts as a rural community and a rural physician, and requires the Alabama Statewide Area Health Education Center Program Office to administer the program, certify qualifying physicians, collect required information, and coordinate with the Department of Revenue, the Board of Medical Examiners, and the Commission on the Evaluation of Services for oversight and evaluation.

Who It Affects

• Rural physicians who live in and practice in small or rural Alabama communities; they may qualify for the new 10,000 annual credit starting in 2027 and must obtain a certificate to claim it, with transition rules for those who previously claimed the old credit.
• Rural communities and their residents in Alabama; the program is intended to recruit and retain physicians, which could affect access to medical care in rural areas and will be administered and reported on by state offices and medical boards.

Key Provisions

• The existing rural physician tax credit of 5,000 per year for five years is repealed and ends after 2026, but physicians who claimed the credit in 2026 may transition to the new credit for the remainder of the five-year period if eligible.
• A new rural physician tax credit begins with tax years 2027 through 2031, providing 10,000 per year; the credit may be claimed for up to four tax years, with exceptions specified for previous recipients of Division 1 credits.
• Definitions are provided for rural community and rural physician, and the rural physician must live in and practice medicine in a rural community to qualify.
• Administration and certification: the Alabama Statewide Area Health Education Center Program Office (in consultation with the State Board of Medical Examiners) must certify qualifying physicians; a certificate must be submitted with the tax return; failure to submit the certificate results in automatic denial of the credit.
• Reporting and oversight: the Office must issue annual informational certificates and lists; the Department of Revenue will issue annual reports; rules will be adopted to implement the division; the Board of Medical Examiners will assist in verifying eligibility; the Commission on the Evaluation of Services will develop metrics and conduct a 2031 evaluation; a needs assessment process will be developed.
• Effective date: October 1, 2026, with the new credit applicable to tax years beginning on or after January 1, 2027, and the existing provisions designated as Division 1 and Division 2 added for the new program.

AI-generated summary using openai/gpt-5-nano on Feb 11, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation & Revenue