HB231 Summary

• For tax year 2021, individual taxpayers may exclude federal income tax reductions from enhanced child tax credits, earned income tax credits, and child and dependent care tax credits received under the American Rescue Plan Act of 2021 when calculating their Alabama federal income tax deduction.

• Federal income tax deductions for 2021 shall be calculated as if taxpayers paid the federal income tax that would have been owed under the Internal Revenue Code in effect on December 31, 2020, allowing individuals to receive enhanced federal credits without paying Alabama state income tax on those amounts.

• Financial institution excise taxpayers are allowed one additional month following the federal income tax return due date (including extensions) to file Alabama financial institution excise tax returns for tax years beginning January 1, 2021 or later.

• Corporate income taxpayers are allowed one additional month following the federal income tax return due date (including extensions) to file Alabama corporate income tax returns for tax years beginning January 1, 2021 or later.

• Both filing extensions do not permit deferral of actual tax payment beyond the original due date; the Department of Revenue is authorized to adopt implementing rules.