A tax rebate for millions of Alabamians will arrive next month. Eligible taxpayers will get up to $300 in a one-time income tax rebate from Alabama. This tax rebate was announced earlier this year and is set to be issued starting December 1.
Income tax rebate from Alabama: what is it?
Lawmakers and Gov. Kay Ivey approved the one-time income tax rebate from Alabama earlier this year. Lawmakers changed the rebate amount two times before eventually agreeing on up to $300.
Gov. Ivey initially proposed a rebate of up to $800. The state Senate committee, at the time, proposed a smaller rebate payment of up to $210, while the Alabama House proposed doubling that amount.
“Thanks to our unwavering commitment to fiscal responsibility, one-time tax rebates will be with our hard-working Alabamians in time for the holidays,” Gov. Ivey said recently.
The one-time income tax rebate from Alabama is estimated to cost the state about $393 million. Money for the rebate will come from the record $2.8 billion surplus in the education budget.
The rebate money will help taxpayers to offset the grocery taxes they paid in 2021. Alabama mainly uses the grocery taxes for public schools through the Education Trust Fund.
About 1.9 million taxpayers are expected to qualify for the rebate, including about 855,000 single filers and about 690,000 couples filing jointly. The remaining are the taxpayers who are married but file separately or as head of family.
Who won’t get the rebate?
To qualify for the rebate, taxpayers had to file their 2021 tax return by Oct. 17, 2022. Non-residents, estates or trusts, or anyone claimed as a dependent during the 2021 tax year doesn’t qualify for the rebate.
The Alabama Department of Revenue will start issuing the income tax rebate beginning December 1. Eligible individuals will get $150 in rebate, while couples filing jointly will get $300.
If one of the taxpayers who filed their 2021 return jointly dies, the remaining person will still qualify for the full $300 rebate. The rebate check won’t be issued to a deceased person who filed the 2021 return as single, head of family or married filing separately.
Eligible taxpayers will get the rebate either directly into their bank account or by check, depending on how they received their refunds. Paper checks will be issued to those who received their 2021 refund by paper check; whose banking information has changed since filing their 2021 return; or who received their 2021 refund using a tax preparer’s account.
It must be noted that the rebate won’t be taxable for Alabama income tax purposes. Also, the rebate won’t be subject to debt collection or an offset, i.e., the rebate can’t be used to pay any state taxes or other state debts you owe.
Visit this Department of Revenue website or call 334-242-1170 to get more information on the income tax rebate from Alabama.
