HB 217 — Relating to gross income; to amend Section 40-18-14, Code of Alabama 1975; to exclude hours worked above 40 in any given week from gross income.

HB217 ENGROSSEDENROLLED GYIF66-2GYIF66-4 By Representatives Daniels, Ledbetter, Garrett, Chestnut, Lawrence, Bracy, Drummond, Warren, Whitt, Faulkner, Colvin, Clarke, Woods, Jones, Plump, Moore (M), Hollis, Boyd, Travis, Stubbs, Starnes, Reynolds, Mooney, Harrison RFD:

23-Mar-23 2023 Regular Session Page 0 HB217 EngrossedEnrolled 2Enrolled, AAn BILLAct, TO BE ENTITLED AN ACT 7 Relating to gross income;

The term "gross income" as used herein also includes alimony and separate Page 1 HB217 Engrossed maintenance payments to the extent they are includable in gross income for federal income tax purposes under 26 U.S.C.

Page 1 HB217 Enrolled The term "gross income" as used herein also includes any amount included in gross income under 26 U.S.C.

Interest upon obligations of the United States or Page 2 HB217 Engrossed its possessions;

Any amounts received by an individual which are Page 2 HB217 Enrolled excludable from gross income under 26 U.S.C.

§ 8437) under which the employee has an election whether the contribution will be made to the trust or received by the employee in cash and contributions made by an employer for an employee for an annuity contract, which contributions would be excludable from the gross income (for federal income Page 3 HB217 Engrossed tax purposes) of the employee in accordance with the provisions of 26 U.S.C.

Page 3 HB217 Enrolled k.

Amounts paid or incurred by an employer on behalf of an employee if the amounts may be excluded from gross income for federal income tax purposes by an employee pursuant to 26 95 U.S.C.

The exemption provided pursuant to this paragraph shall be available for tax years that begin after December 31, 2023, and end prior to January 1, 2027.2027 June 30,2025.

3.

The Department of Revenue shall adopt rules to ensure that no more than $25 million, annually, in aggregate income taxes otherwise due from all taxpayers is exempt from income tax pursuant to this paragraph.

3.

Each employer shall submit to the Department of Revenue, on forms prescribed by the department, the following:

(i) For the tax year beginning January 1, 2023, the total amount received by full-time hourly wage-paid employees as compensation for work performed in excess of 40 hours in a week and the total number of employees for which it was paid.

The data shall be due no later than January 31, 2024.

(ii) For the tax year beginning on or after January 1, 2024, and each tax year thereafter, the total amount received by full-time hourly wage-paid employees as compensation for Page 4 HB217 Enrolled work performed in excess of 40 hours in a week and the total number of employees for which it was paid.

The data shall be provided monthly or quarterly and shall be due no later than the due date for the corresponding monthly or quarterly withholding tax returns.

(iii) Additional information as may be required by the department.

4.

The department shall report to the Legislative Services Agency - Fiscal Division and the Department of Finance the data collected and compiled pursuant to subparagraph 3.

no later than 30 days after the due date of such data.

For purposes of this article, proportionate share shall be defined by reference to (i) the status of the individual owner as a partner or member of a Subchapter K entity, shareholder of an Page 4 HB217 Engrossed Alabama S corporation, or beneficiary of an estate or trust, and (ii) the allocable interest in that entity owned by the individual.

(b) The Department of Revenue may adopt rules to provide for the administration of the provisions of this Page 5 HB217 Enrolled section." Section 2.

Page 56 HB217 EngrossedEnrolled House________________________________________________ Speaker of Representativesthe ReadHouse forof theRepresentatives first________________________________________________ timePresident and referredPresiding ................23-Mar-23Officer toof the Senate House of Representatives committeeI onhereby Wayscertify andthat Meansthe Educationwithin ReadAct fororiginated in and was passed by the secondHouse time02-May-23, as amended and placedwas ................26-Apr-23passed onagain theas calendar:amended by Executive Amendment 06-Jun-23.

amendmentYeas Read103, forNays the0, thirdAbstains time0 andJohn passedTreadwell ................02-May-23Clerk Senate 06-Jun-23 Passed Senate 06-Jun-23 Passed, as amended by Executive Amendment Yeas 10530, Nays 00, Abstains 0 JohnS Treadwell Clerk Page 67