HB273ENGROSSED
Page 0
KH19AA-2
By Representatives Kiel, Garrett, Paschal, Almond, Lee,
Pringle, Baker, Ellis, Collins, Hulsey, Estes, Chestnut,
Lawrence, Woods, Marques, Colvin, Stubbs, Mooney, Robertson,
Kitchens, Faulkner, Wood (D), Daniels
RFD: Ways and Means Education
First Read: 06-Apr-23
2023 Regular Session
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A BILL
TO BE ENTITLED
AN ACT
Relating to income taxes; to amend Section 40-18-15.3,
Code of Alabama 1975, to revise the qualifications for
employees and employers to receive the income tax deduction
for health insurance premiums paid.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 40-18-15.3, Code of Alabama 1975, is
amended to read as follows:
"ยง40-18-15.3
(a) As used in this section, the following terms shall
have the following meanings:
(1) QUALIFYING EMPLOYEES. Alabama resident employees
who are employed by qualifying employers , earn no more than
$50,000 of wages in the applicable tax year, and report no
more than $75,000 of adjusted gross income on their Alabama
individual income tax return ($150,000 if married filing
jointly) for the applicable year.
(2) QUALIFYING EMPLOYERS. Employers with less than 2550
employees.
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(b) For tax years beginning after December 31,
20102023, in addition to any other Alabama income tax
deduction that a qualifying employee may be entitled to with
respect to the payment of health insurance premiums,
qualifying employees shall be allowed to deduct from Alabama
gross income 100 percent of the amounts they pay as health
insurance premiums as part of an employer provided health
insurance plan provided by a qualifying employer.
(c) In addition to any other Alabama income tax
deduction that a qualifying employer may be entitled to with
respect to the payment of health insurance premiums paid on
behalf of qualifyingemployees, the qualifying employer shall
be allowed as a deduction in the computation of Alabama
taxable income 100 percent of the amounts they pay as health
insurance premiums in connection with an employer provided
health insurance plan on behalf of qualifyingemployees making
less than $75,000 annually in wages from the qualifying
employerin connection with an employer provided health
insurance plan.
(d) The deductions allowed under this section shall be
effective January 1, 2024, through the sooner of the
following, unless extended by an act of the Legislature:
(1) December 31, 2028
(2) December 31 of the tax year in which the
cumulative amount reported in the Report on Tax Expenditures
by the Legislative Services Agency reaches ten million dollars
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($10,000,000) for the following expenditures:
a. Corporate income tax small business health
insurance premiums.
b. Individual income tax small employer and employee
health insurance premiums. "
Section 2. This act shall become effective on the first
day of the third month following its passage and approval by
the Governor, or its otherwise becoming law.
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House of Representatives
Read for the first time and referred
to the House of Representatives
committee on Ways and Means
Education
................06-Apr-23
Read for the second time and placed
on the calendar:
1 amendment
................19-Apr-23
Read for the third time and passed
as amended
Yeas 97
Nays 1
Abstains 7
................27-Apr-23
John Treadwell
Clerk
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