HB3 Summary

• For the 2021 tax year, Alabama individual taxpayers' federal income tax deduction shall be calculated without considering the reductions in federal tax from enhanced child tax credits, earned income tax credits, and child and dependent care tax credits under the American Rescue Plan Act of 2021.

• The federal income tax deduction for these enhanced credits shall instead be calculated as if the individual paid federal income tax under the Internal Revenue Code provisions in effect on December 31, 2020, allowing individuals to receive the full amount of enhanced federal credits without increasing Alabama state taxable income.

• Financial institution excise taxpayers are allowed a one-month extension following the federal return due date to file Alabama excise tax returns for tax years beginning on or after January 1, 2021; the Department of Revenue may grant discretionary extensions for tax years 2020-2021.

• Corporate income taxpayers are allowed a one-month extension following the federal return due date to file Alabama corporate income tax returns for tax years beginning on or after January 1, 2021; the Department of Revenue may grant discretionary extensions for tax years 2020-2021.

• The filing extensions do not extend the due date for payment of tax liabilities, and the Department of Revenue is authorized to adopt rules to implement the act.