HB588 Summary

• Effective for tax years beginning January 1, 2021, owners, members, partners, or shareholders of electing pass-through entities must report their pro rata or distributive share of entity income per specified Alabama tax code sections (40-16-4, 40-18-24, 40-18-26, 40-18-27, 40-18-28, 40-18-29, and 40-18-39).

• Owners, members, partners, or shareholders are entitled to a tax credit equal to their pro rata or distributive share of Alabama income tax paid by the electing pass-through entity for the corresponding tax year.

• Any conflicting provisions in Chapters 16 or 18 of Title 40 regarding liability of pass-through entity owners, members, partners, or shareholders are superseded by this act.

• The Department of Revenue may adopt rules for implementation and administration of the act.

• The act became effective immediately upon passage and approval by the Governor.