New tax relief laws help Alabamians save money

MONTGOMERY, Ala. (WSFA) – If you forgot to file your taxes by the traditional April 15 deadline, you were in luck for 2022. It was extended to Monday, April 18.

While the day has arrived to pay your federal taxes, Alabama has an automatic six-month extension to file. That means more money could stay in your wallet this tax season after bills from the 2022 legislative session provided financial relief for some Alabamians and their businesses.

“There’s like 23,000 businesses in the state that this will affect,” said state Rep. Steve Clouse, R-District 93, “so it’s, it’s a pretty big hit to the general fund.”

How big of a hit? About $23 million from phasing out the $100 minimum business privilege tax.

“We’ve done well in our budgets here over the last couple of years,” said Clouse, who believes the state can afford to take the hit, not just for businesses, but for Alabamians as well.

“There’s the number of tax relief efforts that are, that have been proposed and passed this year,” said Clouse, “I think totals around $160 million.”

Not all of the tax relief will affect this year, but refunds on average are higher across the nation.

“Looking at our average refunds this year, as compared to last year, it’s a little skewed,” said Kathleen Abrams, the director of the Income Tax Administration Division of the Alabama Department of Revenue.

Abrams said one of the reasons for that is Act 22-37. Signed by Gov. Kay Ivey, Alabama families who got the federal child tax credit will have a higher federal income tax deduction, covered by the state’s general fund.

Other personal income taxes expected in the future include:

6 signed before April 11:

  • HB391 – Rep. Clouse – Business privilege tax
  • HB171 – Rep. South – Amendments to first-time and second chance home buyers program
  • HB262 – Rep. Allen -…

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