AL HB384

Amends Alabama Code Section 40-18-21 to limit the income tax credit for taxes paid to other states or territories so it only offsets the portion of Alabama tax liability attributable to income from non-Alabama sources.

The credit is calculated by multiplying a taxpayer's total Alabama income tax liability by a fraction where the numerator is adjusted gross income from other states and the denominator is total adjusted gross income.

Timely filed refund petitions for overpaid income tax for tax years 2013-2017 shall be granted without consideration of the new limitation, with a deadline of June 30, 2018 for pre-2017 tax years.

No assessments or adjustments related to the new limitation may be entered for tax years ending on or before December 31, 2017, and any such assessments entered in violation shall be void and unenforceable.

Effective for tax years beginning on or after January 1, 2018.