HB296 Summary

• Exempts 70 percent of distributions from defined contribution deferred compensation plans from Alabama state income tax, with a maximum exemption of $30,000 per distribution.

• Eligibility limited to individual taxpayers who are 65 years of age or older.

• Phases in the exemption over a 10-year period beginning January 1, 2022, increasing by $3,000 annually until reaching the $30,000 cap in 2031.

• Amends Section 40-18-19 of the Code of Alabama 1975 relating to state income tax exemptions.

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