AL HB98

Amends Alabama income tax law to allow a new exemption of up to $10,000 annually for retirement payments from "defined contribution plans" (as defined in Internal Revenue Code Section 414(i)), applying to retirees and designated beneficiaries beginning with tax years after December 31, 2009.

Exemption is subject to income limits: not available to individuals with adjusted gross income exceeding $75,000 (or $150,000 for married filing jointly).

Phases in the exemption over four tax years in equal installments (25%, 50%, 75%, 100%), with each phase contingent on the Department of Finance certifying at least 3% estimated growth in the Education Trust Fund.

Department of Finance must provide annual written certification to the Department of Revenue by the second legislative day of each regular session regarding estimated Education Trust Fund revenue growth for the subsequent fiscal year.

Becomes effective for tax years beginning on or after January 1, 2011.