Alabamans may claim an income tax deduction based on their qualified overtime compensation under a bill that takes effect Oct. 1 and applies to tax years 2026 to 2028.
HB 527 defines and calculates qualified overtime compensation as the premium portion of overtime required under the federal Fair Labor Standards Act. It is the same form of overtime compensation that may be deducted for federal income tax purposes under the One Big Beautiful Bill Act.
The bill allows each taxpayer to claim up to $1,000 in qualified overtime compensation as a deduction. The tax deduction is only available for ...
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