Message Center Message - 3/28/2022
Alabama tax law changes
On Wednesday, February 23, 2022 Act 2022-37 was signed into law in Alabama. Effective for the tax year ending on December 31, 2021, this act allows individual taxpayers to calculate their federal income tax deduction without consideration of certain items allowed under the American Rescue Plan Act. Any reductions to the federal income tax attributable to the federal child tax credit, the earned income tax credit, and federal child and dependent tax credits, will be calculated under the provisions of the Internal Revenue Code in effect on December 31, 2020. The increased federal income tax deduction will reduce the amount of tax due on an Alabama individual income tax return.
Tax returns that have already been electronically filed do not need to be amended. The Alabama Department of Revenue will adjust returns that have already been e-filed. Tax returns that were paper filed will need to be amended.
For TaxSlayer Pro, the Alabama schema that incorporates these changes is available today. After installing the update, you will need to reopen any Alabama return not yet filed for the update to be applied to it.
For more information, including a spreadsheet that can be used to see how a return will change, see the Alabama DOR announcement here.