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Alabama Updates

 
Income Tax Exemption for Overtime Pay

 

Alabama’s income tax exemption for overtime pay is scheduled to end on June 30, 2025.
 
The exemption applies to overtime compensation during the following periods:
  • January 1, 2024 – June 30, 2025: for hourly employees
  • October 1, 2024 – June 30, 2025: for salaried nonexempt employees
 
State lawmakers may consider extending the exemption based on its effect on Alabama’s revenue.
 
There are monthly, quarterly, and annual employer reporting requirements that FrankCrum handles. You can check out the FAQs below and if you have a query on this tax exemption please send an email to tax_group@frankcrum.com.

 

Overtime Pay Exemption - Amended - Alabama Department of Revenue

 

Previous Updates

 

Overtime Pay Exemption

 

Effective October 1, 2024, the following amendments to the Alabama overtime pay exemption take effect:
 
  • The overtime pay exemption (which currently exempts from gross income and Alabama state income tax compensation for hours worked above 40 in any week if it is received by a worker for tax years that begin on or after December 31, 2023, and before June 30, 2025) ends and instead applies to amounts paid as overtime in accordance with the federal Fair Labor Standards Act if the compensation is received for tax years beginning on or after October 1, 2024, through June 30, 2025.  
  • For employers governed by the federal National Railway Labor Act, the exemption applies to hourly component overtime compensation as defined in applicable collective bargaining agreements.
 
There are monthly, quarterly, and annual employer reporting requirements that FrankCrum handles. You can check out the FAQs below and if you have a query on this tax exemption please send an email to tax_group@frankcrum.com.
 

Alabama Overtime Exemption FAQs

 

Income Tax Exemption for Overtime Pay

 

There will be a temporary employee tax exemption for overtime pay received beginning January 1, 2024 through June 30, 2025, which will mean less taxes out of the employee with overtime paycheck. There are monthly, quarterly, and annual employer reporting requirements that FrankCrum will handle. You can check out the FAQs below and if you have a query on this tax exemption send an email to tax_group@frankcrum.com.
 

 

 

Employee Firearm Rights

 

Effective January 1, 2023, Alabama law regarding firearms in public is amended to permit an individual to carry a concealed firearm without a permit. The conditions under which employees may keep firearms in their personal vehicles in an employer's parking lot are also amended.
 
Employers are not permitted to ban employees from keeping guns in employer-owned parking lots. The Guns in the Parking Lot Act allows employees to keep a gun in a privately owned car.

 

 

Adoption Promotion Act (APA)

Effective July 1, 2022, Alabama's Adoption Promotion Act (APA) requires employers with 50 or more employees to provide eligible employees with up to 12 weeks of unpaid family leave for the birth or adoption of a child.

 

The APA also provides that additional family leave due to the adoption of an ill child or a child with a disability must be considered on the same basis as comparable cases of complications accompanying the birth of a child. In addition, if an employer provides paid leave benefits for the birth of a child, it must provide similar benefits for adoption.

 

You can learn more here.

 

COVID-19 Vaccine Mandate Exemptions

The Governor signed into law SB9, which says that an employer may not require employees to receive a vaccination as a condition of employment without providing them with an opportunity to be exempted from the vaccination mandate for religious or medical reasons. The law includes compensation and termination protections for employees who request an exemption.

 

The law also requires employers to provide employees with an exemption form that includes certain language.

 

Unless extended by the Alabama Legislature, this law will automatically be repealed on May 1, 2023.

Here is the link to the exemption form, poster, and employee and employer upload portal: Vaccination Exemption Information Portal (alabama.gov).

 

Required Unemployment Notice

Alabama employers are now required to provide notification of the potential availability of unemployment compensation to each employee who separates from their employment for any reason. They may provide this notice in the form of a letter, email, text message, or flyer. The Alabama DOL is currently working to amend the Alabama Administrative Code to reflect these new requirements.

 

Alabama DOL employer resources are located here.