Alabama SB69 would exempt certain compensation of civilian employees of the U.S. Department of Defense and Armed Forces from state income tax.

Alabama SB69 amends the state's income tax code to exempt certain compensation of civilian employees of the U.S. Department of Defense and Armed Forces from state income tax. This exemption applies to compensation earned while the individual is in a combat zone, deployed outside the United States, or activated to support state or federal emergency responses. The exemption is without discrimination and only to the extent and manner that other income is taxed, as constitutionally or legally authorized. The changes would apply to tax years beginning on or after January 1, 2027.

Alabama SB69 would exempt certain compensation of civilian employees of the U.S. Department of Defense and Armed Forces from state income tax.

Alabama SB69 amends the state's income tax code to exempt certain compensation of civilian employees of the U.S. Department of Defense and Armed Forces from state income tax. This exemption applies to compensation earned while the individual is in a combat zone, deployed outside the United States, or activated to support state or federal emergency responses. The exemption is without discrimination and only to the extent and manner that other income is taxed, as constitutionally or legally authorized. The changes would apply to tax years beginning on or after January 1, 2027.