SB201 Summary

• Establishes the Alabama First-time Home Buyer Savings Account Act, allowing first-time home buyers to open dedicated savings accounts beginning January 1, 2019 for down payments and closing costs on Alabama single-family residences.

• Provides state income tax deductions of up to $6,000 per year for individual account holders or $12,000 per year for joint filers, with earnings excluded from taxable income.

• Limits tax benefits to a five-year period with aggregate caps of $30,000 for individual accounts and $60,000 for joint accounts.

• Imposes 10 percent penalty plus full account inclusion in taxable income for withdrawals used for purposes other than eligible home purchase costs, with exceptions for death, disability, and bankruptcy.

• Requires account holders to submit annual transaction details and settlement statements to the Department of Revenue, and mandates the department report annually to the Legislative Services Agency on program usage and deductions claimed.