1 HB86
2 208257-1
3 By Representative Mooney
4 RFD: Ways and Means Education
5 First Read: 02-FEB-21
6 PFD: 12/17/2020
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1 208257-1:n:09/29/2020:LSA-KF/jmb
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8 SYNOPSIS: Under existing law, amounts received in 2020
9 as a result of federal tax credits or advance
10 refunds provided under the federal Coronavirus Aid,
11 Relief, and Economic Security (CARES) Act, as
12 provided in I.R.C. 6428, are not excluded from
13 Alabama individual income taxation.
14 Under existing law, cancellation of
15 indebtedness income resulting from the forgiveness
16 of small business loans forgiven under Section 1106
17 of the federal Coronavirus Aid, Relief, and
18 Economic Security (CARES) Act is not excluded from
19 Alabama individual income taxation and may not be
20 excluded from Alabama corporate income taxation and
21 financial institution excise taxation.
22 Under existing law, any amount received by
23 Alabama taxpayers from the state Coronavirus Relief
24 Funds provided to the state under the Coronavirus
25 Aid, Relief, and Economic Security (CARES) Act,
26 must be recognized as income.
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1 This bill would provide for an exclusion
2 from Alabama individual income taxation for any
3 federal tax credits or advance refunds resulting
4 from the federal Coronavirus Aid, Relief, and
5 Economic Security (CARES) Act or any subsequent
6 federal act providing similar tax credits or
7 advance refunds in response to the Coronavirus
8 pandemic.
9 This bill would provide for an exclusion
10 from Alabama income taxation and financial
11 institution excise taxation for small business
12 loans forgiven under the Paycheck Protection
13 Program established by the federal Coronavirus Aid,
14 Relief, and Economic Security (CARES) Act or any
15 subsequent federal act providing small business
16 loan forgiveness in response to the Coronavirus
17 pandemic.
18 This bill would exempt any amount received
19 by a taxpayer from state Coronavirus Relief Funds,
20 or other stimulus funds provided to the state in
21 response to the Coronavirus pandemic from being
22 recognized as income for Alabama income taxation
23 and financial institution excise taxation.
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25 A BILL
26 TO BE ENTITLED
27 AN ACT
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2 Relating to income taxes; to provide for an
3 exclusion from Alabama individual income tax or financial
4 institution excise tax for federal tax credits, advance
5 refunds, loan forgiveness, or amounts received from state
6 Coronavirus Relief Funds resulting from the federal
7 Coronavirus Aid, Relief, and Economic Security (CARES) Act or
8 any subsequent federal act directly related to the Coronavirus
9 pandemic.
10 BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
11 Section 1. (a) Any tax credits or advance refund
12 amounts received as a result of the federal Coronavirus Aid,
13 Relief, and Economic Security (CARES) Act, as provided in
14 I.R.C. 6428, or any subsequent federal act directly related
15 to the Coronavirus pandemic, shall be excluded from Alabama
16 individual income taxation.
17 (b) For taxable year 2020, any tax credits or
18 advance refund amounts received as a result of the federal
19 Coronavirus Aid, Relief, and Economic Security (CARES) Act, as
20 provided in I.R.C. 6428, or any subsequent federal act
21 directly related to the Coronavirus pandemic, shall also be
22 excluded from any and all calculations in determining a
23 taxpayer's federal income tax deduction pursuant to Section
24 40-18-15.
25 (c) Principal or interest payments incurred by an
26 employer on any qualified education loan that is excluded from
27 the employees federal gross income pursuant to I.R.C. Section
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1 127(c)(1)(B), under the provisions of Section 2206(a) of the
2 Coronavirus Aid, Relief, and Economic Security (CARES) Act, or
3 any subsequent federal act directly related to the Coronavirus
4 pandemic, shall be excluded from the gross income of an
5 employee for income taxes imposed by Chapter 18 of Title 40,
6 to the same extent as the amount is excluded from the federal
7 gross income.
8 Section 2. Any amount of cancellation of
9 indebtedness income resulting from a loan forgiven under
10 Section 1106 of the federal Coronavirus Aid, Relief, and
11 Economic Security (CARES) Act, or any subsequent federal act
12 directly related to the Coronavirus pandemic:
13 (1) Shall be exempt from the financial institution
14 excise tax imposed by Chapter 16 of Title 40 and the income
15 taxes imposed by Chapter 18 of Title 40, to the same extent as
16 the amount is exempt from the federal income tax.
17 (2) Shall also be excluded from any and all
18 calculations in determining a taxpayer's federal income tax
19 deduction pursuant to Chapter 16 or Chapter 18 of Title 40.
20 (3) In determining the deductibility of expenses,
21 such as payroll, utilities, mortgage interest, and rent,
22 allowed to be paid with the exempt loan proceeds, the expenses
23 shall be deductible in calculating Alabama taxable income to
24 the same extent that the expense are deductible in calculating
25 federal taxable income under the provisions of the Internal
26 Revenue Code.
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1 Section 3. Any Alabama taxpayer subject to the tax
2 imposed by Chapter 16 or Chapter 18 of Title 40 shall be
3 exempt from recognizing as income any amount received from
4 state Coronavirus Relief Fund amounts provided to the state
5 under the Coronavirus Aid, Relief, and Economic Security
6 (CARES) Act, or any subsequent federal act directly related to
7 the Coronavirus pandemic.
8 Section 4. This act shall become effective
9 immediately following its passage and approval by the
10 Governor, or its otherwise becoming law.
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