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AL HB92
Bill
Status
2/3/2016
Primary Sponsor
Lynn Greer
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AI Summary
HB92 Summary
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Removes the blanket exemption for distributions from defined benefit plans, requiring individuals including state retirees to report these distributions as income starting with tax year 2016.
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Provides an exemption of up to $50,000 per year for pension and annuity income for individual taxpayers; married couples filing jointly both receive the $50,000 exemption if both receive pension income.
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Allows a 60-month basis recovery period to recapture employee after-tax contributions to defined benefit plans at a maximum rate of 20% per year, with DROP participants excluded from this benefit.
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Adds new exemption for contributions made on or after January 1, 2017, to defined benefit plans under IRC Section 414(j).
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Becomes effective for taxable years beginning after December 31, 2015.
Legislative Description
Income tax, defined benefit plans, distributions, including retirement under Teachers and State Employees Retirement, exemption limited, contributions to defined benefit plans exempt from income under certain conditions, Secs. 16-25-23, 36-27-28, 36-27-170, 40-18-14, 40-18-19 am'd; Sec. 40-18-20 repealed
Taxation
Last Action
Read for the first time and referred to the House of Representatives committee on Ways and Means Education
2/3/2016