HB476 Summary: Alabama Individual Income Tax Reform Act of 2015

• Increases standard deductions and personal exemptions for Alabama income tax to match federal amounts under 26 U.S.C. § 63, contingent on ratification of a constitutional amendment to repeal the deduction of federal income tax payments.

• Allows individual taxpayers to elect a standard deduction equal to the federal standard deduction in lieu of itemized deductions under current state law.

• Creates a state earned income tax credit equal to 10 percent of the federal earned income tax credit allowable under Internal Revenue Code Section 32 for qualified taxpayers with federal adjusted gross income not exceeding 200 percent of the federal poverty level.

• Provides that excess earned income tax credit above tax liability shall be refunded to the taxpayer.

• Becomes effective for taxable years beginning after December 31, 2016, only upon ratification of the constitutional amendment repealing the federal income tax deduction on Alabama tax returns.