HB52INTRODUCED
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HB52
UM6HDGX-1
By Representatives Garrett, Almond
RFD: Ways and Means Education
First Read: 04-Feb-25
PFD: 01-Oct-24
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6 UM6HDGX-1 09/09/2024 RA ()RA 2024-2508
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PFD: 01-Oct-24
SYNOPSIS:
Under current law, contributions to an Alabama
Achieving a Better Life Experience (ABLE) savings
account are deductible from taxable income on an
Alabama individual income tax return until December 31,
2025, when the deduction is sunset.
This bill would extend the Alabama ABLE
contribution deduction through December 31, 2030.
A BILL
TO BE ENTITLED
AN ACT
Relating to income taxes; to amend Section 40-18-15.8,
Code of Alabama 1975, to extend the sunset date for the
existing income tax deduction for contributions to an Alabama
Achieving a Better Life Experience (ABLE) savings account to
December 31, 2030.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 40-18-15.8, Code of Alabama 1975, is
amended as follows:
"§40-18-15.8
(a) An individual taxpayer shall be allowed a deduction
from gross income, regardless of whether the taxpayer itemizes
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from gross income, regardless of whether the taxpayer itemizes
income tax deductions in calculating the income tax imposed
pursuant to Section 40-18-5, for contributions made to an
Alabama Achieving a Better Life Experience (ABLE) savings
account, defined in Section 16-33C-3, as prescribed by this
section.
(b) An individual taxpayer will be allowed to deduct
contributions made on or after January 1, 2021 , to an Alabama
ABLE savings account, by or on behalf of such individual, of
an amount up to five thousand dollars ($5,000) per annum. If
the taxpayer makes a nonqualified withdrawal as defined by
Section 529A of the Internal Revenue Code (26 U.S.C. § 529A),
the amount of the nonqualified withdrawal, plus 10 percent of
the amount withdrawn, shall be added back to the income of the
contributing taxpayer in the year the nonqualified withdrawal
was distributed. Rollover amounts transferred to an Alabama
ABLE savings account shall not be considered contributions for
purposes of this deduction to the extent that an Alabama
income tax deduction has already been claimed for the rollover
contribution amounts.
(c) The Department of Revenue may adopt rules to assist
with the administration of this section.
(d) The deduction allowed under this section shall not
be claimed for tax years that begin after December 31, 2030.
Unless extended by an act of the Legislature, this section
shall sunset on December 31, 2025. "
Section 2. This act shall become effective on October
1, 2025.
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