Lawmakers pass income tax deduction for working families

Lawmakers pass income tax deduction for working families

By MARY SELL, Alabama Daily News

MONTGOMERY, Ala. – The Alabama Senate on Thursday gave final passage to legislation increasing state income tax standard deductions and dependent exemptions.

The bill was originally filed as Senate Bill 19 as a way to help low-income Alabamians, but bills that increase or decrease state taxes must start in the House. The bill was sponsored by Rep. Lynn Greer, R-Rogersville, and Sen. Arthur Orr, R-Decatur. 

“This is important to working families to receive tax relief in these days of high inflation,” Orr said Thursday. “The Legislature will have passed well over $100 million in tax relief this session to help families and small businesses.” 

House Bill 163 increases the optional standard deduction by $1,000 for couples married filing jointly and $500 for those single, married filing separately and head of household. It also increases the adjusted gross income range allowable for the maximum optional standard deduction to $35,000, up from $33,000, and the adjusted gross income range allowable for dependent exemption to $50,000, up from $20,000, to increase the threshold at which the state imposes individual income taxes.

The bill now goes to Gov. Kay Ivey for her signature.