The bill amends Section 40-18-15.3 of the Code of Alabama 1975 to revise the qualifications for employees and employers to receive income tax deductions for health insurance premiums paid. The definition of "qualifying employees" is updated to include Alabama resident employees who report no more than $75,000 of adjusted gross income on their tax return, regardless of their wages, while "qualifying employers" are defined as those with fewer than 2,550 employees. The bill allows qualifying employees to deduct 100% of their health insurance premiums from their Alabama gross income, and qualifying employers can also deduct 100% of the premiums they pay on behalf of employees earning less than $75,000 annually.

Additionally, the bill introduces a new provision stating that these deductions will be effective from January 1, 2024, until either December 31, 2028, or until the cumulative amount of reported expenditures reaches $10 million, whichever comes first. This includes deductions for both corporate income tax small business health insurance premiums and individual income tax small employer and employee health insurance premiums. The bill is set to take effect on the first day of the third month following its passage and approval by the Governor.

Statutes affected:
Introduced: 40-18-15, 40-18-15
Engrossed: 40-18-15, 40-18-15