SB504 Summary

• Repeals the total exemption from income tax withholding that previously allowed employees with no prior-year tax liability and no anticipated current-year liability to claim zero withholding on their wages.

• Eliminates subsection (h) of Section 40-18-73, which had allowed employers to skip withholding taxes for employees meeting both the no-liability criteria since January 1, 1998.

• Maintains requirements for employees to furnish signed Alabama withholding exemption certificates (Form A-4) showing claimed exemptions, with a $500 penalty for inflating exemptions.

• Requires employers to submit copies of withholding certificates claiming eight or more exemptions within 60 days of employment start, with a $50 penalty per certificate for non-compliance.

• Effective date: September 1, 2015, with authorization for the Department of Revenue commissioner to promulgate implementing rules and regulations.