Alabama Taxpayer Stimulus Freedom Acts of 2021

Ala. Code tit. 40, ch. 18, art. 22

in effect

Ala. Code § 40-18-460 Exclusion of Cares Act Relief Benefits, Etc., from Alabama Individual Income Taxation and Deductions.

40-18-460. Exclusion of Cares Act Relief Benefits, Etc., from Alabama Individual Income Taxation and Deductions. (a) Any tax credits or advance refund amounts received as a result of the federal Coronavirus Aid, Relief, and Economic Security Act, as provided in 26 U.S.C. § 6428, or as a result of Section 272 of the COVID-related Tax Relief Act of 2020 (RELIEF Act), Pub. L. 116-260, as provided in 26 U.S.C. § 6428A, or as a result of other similar COVID-related relief measures for individuals enacted by the United States Congress, as applicable to the 2021 tax year, shall be excluded from Alabama individual income taxation. (b) Any tax credits or advance refund amounts received as a result of the federal Coronavirus Aid, Relief, and Economic Security Act, as provided in 26 U.S.C. § 6428, or as a result of Section 272 of the RELIEF Act, Pub. L. 116-260, as provided in 26 U.S.C. § 6428A, or as a result of other similar COVID-related relief measures for individuals enacted by the United States Congress shall also be excluded from any and all calculations in determining a taxpayer’s federal income tax deduction pursuant to Section 40-18-15. (c) Principal or interest payments incurred by an employer on any qualified education loan that is excluded from an employee’s federal gross income pursuant to 26 U.S.C. § 127(c)(1)(B), under the provisions of Section 2206(a) of the Coronavirus Aid, Relief, and Economic Security Act, as amended by Section 120 of the Taxpayer Certainty and Disaster Relief Tax Act of 2020, Pub. L. 116-260, shall be excluded from the gross income of the employee for income taxes imposed by this chapter to the same extent as the amount is excluded from the federal gross income. (d) Any amount received from a Qualified Emergency Federal Aid Grant shall be excluded from the gross income of the grant recipient for income taxes imposed by this chapter to the same extent as the amount is excluded from the federal gross income under Section 277 of the RELIEF Act. (e) Any Alabama taxpayer subject to the tax imposed by Chapter 16 or this chapter shall be exempt from recognizing as income any amount received from the state Coronavirus Relief Fund provided by the United States Congress to the State of Alabama from the Coronavirus Aid, Relief, and Economic Security Act. (f) Any qualifying disaster relief payment received by an Alabama taxpayer which would be excluded from federal income taxation pursuant to 26 U.S.C. § 139 as a result of the Presidential Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak shall be excluded from the gross income of the taxpayer for income taxes imposed by this chapter to the same extent as the amount is excluded from federal gross income. (g) This section applies to tax years ending after March 27, 2020. (Act 2021-1, §2.)

Ala. Code § 40-18-461 Cancellation of Indebtedness Income Under Cares Act, Etc., Excluded from Alabama Individual Income Taxation and Deductions.

40-18-461. Cancellation of Indebtedness Income Under Cares Act, Etc., Excluded from Alabama Individual Income Taxation and Deductions. (a) Any amount of cancellation of indebtedness income resulting from a loan forgiven under Section 1106 or Section 1109 of the federal Coronavirus Aid, Relief, and Economic Security Act as redesignated or amended by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, Pub. L. 116-260, or under Section 311 thereof: (1) Shall be exempt from the financial institution excise tax imposed by Chapter 16 and the income taxes imposed by this chapter to the same extent as the amount is exempt from the federal income tax under Sections 276 or 278 of the RELIEF Act. (2) Shall not be considered in determining the deductibility of otherwise deductible expenses, such as payroll, utilities, mortgage interest, and rent, allowed to be paid with the exempt funds, to the same extent as the expenses remain deductible in calculating federal income tax under Sections 276 or 278 of the RELIEF Act. (3) Shall also be excluded from any and all calculations in determining a taxpayer’s federal income tax deduction pursuant to Chapter 16 or this chapter. (b) This section applies to tax years ending after March 27, 2020. (Act 2021-1, §3.)

Ala. Code § 40-18-462 Amounts of Certain Loans and Grants Under Cares Act, Etc., Excluded from Alabama Individual Income Taxation and Deductions.

40-18-462. Amounts of Certain Loans and Grants Under Cares Act, Etc., Excluded from Alabama Individual Income Taxation and Deductions. (a) Any subsidy payment for covered loans as described in Section 1112(c) of the federal Coronavirus Aid, Relief, and Economic Security Act; any amounts received as Emergency EIDL Grants under Section 1110 of the federal Coronavirus Aid, Relief, and Economic Security Act, as amended by Section 332 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act; and any amounts received as Grants to Shuttered Venues or as Targeted EIDL Advances under Sections 324 or 331, respectively, of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act: (1) Shall be exempt from financial institution excise tax imposed by Chapter 16 and the income taxes imposed by this chapter to the same extent as the amount is exempt from federal income tax under Section 278 of the RELIEF Act. (2) Shall not be considered in determining deductibility of otherwise deductible expenses, such as payroll, utilities, mortgage interest, and rent, allowed to be paid with the exempt funds, to the same extent as the expenses remain deductible in calculating federal income tax under Section 278 of the RELIEF Act. (3) Shall also be excluded from any and all calculations in determining a taxpayer’s federal income tax deduction pursuant to Chapter 16 or this chapter. (b) This section applies to tax years ending after March 27, 2020. (Act 2021-1, §4.)

Source: Alabama Legislature (alison.legislature.state.al.us)URL: https://alison.legislature.state.al.us/code-of-alabamaFetched: 10/20/2026