HB 108 Summary

• Amends Section 40-18-19 of the Code of Alabama 1975 to create a new income tax exemption for distributions from defined contribution deferred compensation plans for individuals age 65 and older.

• Exempts 80 percent of such distributions, up to a maximum of $20,000, from state income tax.

• Phases in the exemption over a ten-year period beginning January 1, 2021, increasing by $2,000 annually until reaching the $20,000 cap in 2030.

• Taxpayers cannot exempt more than 80 percent of distributions from defined contribution deferred compensation plans under this provision.

• Becomes effective on the first day of the third month following passage and approval by the Governor.