HB 83 Summary

• Gradually increases personal and dependent exemptions and raises the optional standard deduction phase-out thresholds over five adjustment years for Alabama individual income taxpayers, effective for tax years beginning after December 31, 2010.

• Personal exemption increases from $1,500 (single/MFS) to $2,000 and from $3,000 (MFJ/HOF) to $4,000 by adjustment year five; dependent exemptions increase from $300 to $2,000 by year five, but no increases apply to taxpayers with adjusted gross income exceeding $100,000.

• Optional standard deduction phase-out ranges expand incrementally across five years (e.g., MFJ phase-out range increases from $30,000-$40,000 in year one to $90,000-$100,000 in year five).

• All changes are conditional upon the Alabama Department of Finance certifying that estimated Education Trust Fund revenue growth equals or exceeds 3% annually; changes can be tolled and resumed based on meeting this revenue growth threshold.

• Effective date is tax years beginning January 1, 2011.