HB248 Summary: Alabama First-time and Second Chance Home Buyer Savings Account Act

• Establishes first-time and second chance home buyer savings accounts beginning January 1, 2019, allowing Alabama residents who have not owned a home in 10 years to save for down payments and closing costs on a single-family residence.

• Provides state income tax deduction of $5,000 per year for individual filers and $10,000 per year for joint filers, with aggregate limits of $25,000 (individual) and $50,000 (joint) over a five-year period.

• Excludes account earnings (interest and investment income) from Alabama taxable income during the five-year savings period, with earnings becoming taxable if funds are not withdrawn for eligible home purchase costs by December 31 of the fifth year.

• Imposes 10 percent penalty on non-qualifying withdrawals, with exceptions for death, disability, employment after unemployment benefits exhaustion, and bankruptcy filings; allows penalty-free 60-day transfers between qualifying accounts.

• Requires account holders to submit annual detailed account information and transaction lists to the Department of Revenue, which must report annually to the Legislature on total deductions claimed, deposits, and number of taxpayers subject to penalties.