110217-1:n:03/26/2009:GPO-BT/ebo-pa
| SYNOPSIS: | This bill would provide an income tax deduction, to be added to the deduction for federal income taxes paid or accrued, to offset the loss of the federal income tax deduction resulting from the tax credits provided to individuals as the result of the American Recovery and Reinvestment Tax Act of 2009, also called the federal stimulus act. |
To provide an income tax deduction, to be added to the deduction for federal income taxes paid or accrued, to offset the loss of the federal income tax deduction resulting from the tax credits provided to individuals as the result of the American Recovery and Reinvestment Tax Act of 2009, also called the federal stimulus act.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. The legislature finds that individuals allowed to deduct federal income taxes paid or accrued, by Amendment 225 to the Constitution of Alabama, are sometimes entitled to credits against the tax which reduce the amount of federal taxes actually paid; that the proper deduction for federal income taxes to be included in the calculation of the Alabama income tax liability is the net, actual amount of federal income taxes paid; that because of the severity of the current economic downturn, Alabama citizens should be allowed to retain the maximum effect of the federal stimulus; and that therefore it is appropriate for the current year to allow individuals to claim as a federal income tax deduction the amount of federal income taxes actually paid, plus the amount of federal income taxes that have been offset by the new or expanded federal credits allowed pursuant to P.L. 111-5, also known as the American Recovery and Reinvestment Tax Act of 2009.
Section 2. For the tax year ending through December 31, 2009, the federal income tax deduction, authorized by Amendment 225 to the constitution of Alabama, and provided pursuant to Section 40-18-15, shall be determined as if any credits received as a result of the enactment of P.L. 111-5, also known as the American Recovery and Reinvestment Tax Act of 2009, had not reduced the amount of federal income taxes required to be paid. Individuals shall be allowed to add an amount to the federal income taxes actually paid, in calculating the deduction for federal income taxes pursuant to Section 40-18-5, the amount of the new or expanded credits resulting from P.L. 111-5, which reduced the amount of federal income taxes actually required to be paid.
Section 3. This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.