AL HB41

Active duty members of the U.S. Marine Corps, Navy, Air Force, Army, Coast Guard, or Alabama National Guard who are Alabama residents stationed outside the state may deduct their military pay and allowances from their Alabama individual income tax return.

The deduction applies only to pay and allowances not otherwise deductible or excludable from Alabama adjusted gross income and cannot be claimed for service while stationed within Alabama.

Taxpayers must annually certify their residence status to the Department of Revenue on forms provided by the department to claim this deduction.

The Department of Revenue shall adopt rules necessary to enforce the act.

The act becomes effective for taxable years beginning after December 31, 2020.