Ad valorem tax; qualified disabled veterans; extend homestead exemption to unremarried surviving spouses or minor children

2025-2026 Regular Session Introduced by Josh Bonner and 4 co-sponsors

House Bill 52 extends tax deductions for Alabama ABLE accounts until 2030 and ensures $100 million annually for educational funding, aiding families with disabilities.

Senate Committee Favorably Reported By Substitute

#handicappedpersons #military #emergencymanagement #andveteransaffairs #revenueandtaxation

Purpose and Intent

House Bill 52 (HB 52) aims to make technical amendments to the funding provisions of the CHOOSE Act credits and to extend the sunset date for income tax deductions related to contributions to Alabama Achieving a Better Life Experience (ABLE) savings accounts. The bill is designed to enhance educational funding and support families saving for disability-related expenses.

Key Provisions

Extension of ABLE Contribution Deduction:

The bill extends the existing income tax deduction for contributions to Alabama ABLE savings accounts from December 31, 2025, to December 31, 2030.
Taxpayers can deduct contributions of up to $5,000 per year to these accounts.

Funding for the CHOOSE Act:

Establishes the CHOOSE Act Fund in the State Treasury, requiring a minimum annual appropriation of $100 million starting from the fiscal year ending September 30, 2026.
For fiscal year 2026, the Commissioner of Revenue must deposit $100 million into the CHOOSE Act Fund by June 1, 2026.
From fiscal year 2027 onward, the fund will receive additional deposits based on gross income tax receipts, with a cap of $150 million annually for families with an adjustable gross income not exceeding 300% of the federal poverty level.

Management of Excess Funds:

Any excess funds in the CHOOSE Act Fund, exceeding $500 million, will revert to the Education Trust Fund for legislative appropriation.

Administrative Provisions:

The Department of Revenue is authorized to adopt rules for the administration of the ABLE deduction.

Impact

Financial Implications:

The bill is projected to reduce potential income tax receipts to the Education Trust Fund by an estimated minimum of $375,000 annually from fiscal years 2027 through 2031 due to the extended ABLE deductions.

Beneficiaries:

Families saving for disability-related expenses through ABLE accounts will benefit from the extended tax deductions.
The CHOOSE Act Fund will provide financial support for educational expenses, particularly for families with lower incomes.

Procedural Timeline

Introduced: November 5, 2025

Passed: The bill was passed by the House on February 13, 2025, and subsequently by the Senate on May 6, 2025.

Enacted: The bill was signed into law and delivered to the Governor on May 29, 2025.

Effective Date: The provisions of the bill will take effect on June 1, 2025.

Conclusion

House Bill 52 represents a significant legislative effort to support families with disabilities and enhance educational funding in Alabama. By extending tax deductions for ABLE contributions and ensuring robust funding for the CHOOSE Act, the bill aims to provide critical financial resources to eligible families.

Bill