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HB657 INTRODUCED
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HB657
9J8S9BP-1
By Representatives Datcher, Lawrence
RFD: Ways and Means Education
First Read: 31-Mar-26
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9J8S9BP-1 03/26/2026 RA (F)RA 2026-1460
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First Read: 31-Mar-26
SYNOPSIS:
This bill would provide a one-time tax credit to
certain individual income taxpayers for the 2025 tax
year.
A BILL
TO BE ENTITLED
AN ACT
Relating to income taxes; to add Section 40-18-513 to
the Code of Alabama 1975, to provide a one-time tax credit to
certain individual income taxpayers for the 2025 tax year.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 40-18-513 is added to the Code of
Alabama 1975, to read as follows:
§40-18-513
(a) As used in this section, the term "qualified
taxpayer" means an individual taxpayer who filed an Alabama
individual income tax return pursuant to the tax levied in
Section 40-18-5, for both the 2024 and 2025 tax years,
including any extensions that have been granted.
(1) The term shall not include:
a. A nonresident;
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a. A nonresident;
b. An estate or trust; or
c. An individual who was claimed as a dependent by
another taxpayer for federal or Alabama income tax purposes
for the 2024 tax year.
(2) The term shall include any individual taxpayer
excluded solely due to paragraph (1)c. of this section,
provided that such individual had earned income for the 2024
tax year.
(b)(1) Once a qualified taxpayer files an individual
income tax return for the 2025 tax year, the department shall
automatically credit such qualified taxpayer with a one-time
refund amount equal to the lesser of:
a. The qualified taxpayer's 2024 individual income tax
liability as properly reported on Line 17 of the 2024 Alabama
Form 40 or Line 17 of the 2024 Alabama Form 40A; or
b. An amount, which is based on such taxpayer's filing
status for the 2025 tax year, equal to:
1. In the case of a single taxpayer or married taxpayer
filing a separate return, two hundred fifty dollars ($250);
2. In the case of a head of household, three hundred
seventy-five dollars ($375); or
3. In the case of a married couple filing a joint
return, five hundred dollars ($500).
(2) Notwithstanding the provisions of subdivision (1),
in the case of any taxable nonresident or part-year resident
whose tax was prorated as provided by this chapter, the amount
of the refund credit determined pursuant to subdivision (1)
shall be prorated based on the ratio of income taxable in
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shall be prorated based on the ratio of income taxable in
Alabama as properly reported on Line 10 of the 2024 Alabama
Form 40NR.
(3) In no event shall the department credit, pursuant
to this section, any taxpayer with a refund greater than the
taxpayer's individual income tax liability as properly
reported on Line 17 of the 2025 Alabama Form 40 or Line 17 of
the 2025 Alabama Form 40A.
(c) The refunds and credits provided for in this
section shall not constitute taxable income for Alabama
individual income tax purposes.
(d) Any refunds due under this section to a taxpayer
shall be either electronically transmitted or sent by check to
such taxpayer, based on the taxpayer's refund instructions, if
any, as indicated on the taxpayer's income tax return for the
2025 tax year, provided that such refund shall first be
credited against any outstanding liability existing at the
time the refund provided for in this section is to be issued.
(e) The amount of a refund or credit provided for in
this section may not accrue interest for the benefit of the
taxpayer or be paid or credited to the taxpayer with interest.
(f) Any amount due to be refunded or credited to a
taxpayer pursuant to this section shall be subject to the
setoff debt collection provisions of Article 3 of Chapter 40.
(g) The department may adopt rules necessary to
implement and administer this section.
Section 2. This act shall become effective immediately.
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