Overtime compensation provided in accordance with the federal Fair Labor Standards Act will be exempt from Alabama income tax, under a bill that will go into effect on Oct. 1.
In 2023, Alabama passed a law exempting overtime compensation from state income taxes from Jan. 1, 2024, to June 30, 2025. The exemption applies to overtime compensation paid during the exemption period to employees paid on an hourly basis for work performed in excess of 40 hours in a week.
Starting Oct. 1, the exemption will instead apply to any overtime compensation provided in accordance with the FLSA, under HB ...
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