MONTGOMERY, Ala. – The Alabama State Senate today passed legislation – SB152 sponsored by Senator Dan Roberts (R-Mountain Brook) – to guarantee that Alabama families will not be penalized for benefitting from expanded tax credits included in federal COVID-19 relief. Absent the enactment of this legislation, Alabama working families would pay an extra $87.7 million in state income taxes.

“I am pleased that the Senate followed through in this critical effort to stop an additional $87.7 million tax on hardworking Alabamians. These individuals qualified for tax relief because they showed up for work during the pandemic, so it would be outrageous to punish them, especially when they were doing what was necessary during difficult times to provide for themselves and their families,” said Senator Roberts. “This money belongs to the people, not the state government, and I am proud that we are one step closer to delivering tax credits to these deserving individuals.”

Federal COVID-19 relief legislation passed last year increased the child tax credit, the dependent care credit, and the earned income tax credit. A taxpayer must have earned income from work to qualify for the earned income credit and the dependent care credit. However, Alabama law does not exclude these pandemic-related federal tax benefits from income that can be taxed by the state.

SB152 would write the exclusion into state law so that Alabama families would not pay additional taxes on the credits they received in 2021.Senator Roberts also sponsored similar legislation last year, which was signed into law on February 12, 2021.

“This was truly a bipartisan effort, and I want to sincerely thank my colleagues on both sides of the aisle for their diligent work, fighting to ensure these families will not be imposed by this nonsensical tax,” Roberts continued.

Senator Roberts’ bill passed unanimously in the Senate. Representative Jim Carns (R-Vestavia Hills) is sponsoring the companion bill in the House of Representatives.