Monday, January 9, 2023

More retirement plan income now exempt from income tax in Alabama

Act 2022-294, sponsored by Rep. Lynn Greer (R-Rogersville), beginning January 1, 2023, exempts from state income tax up to $6,000 in taxable retirement income for people age 65 and older.  

The new exemption applies to withdrawals from 401(k)-type accounts and individual retirement accounts, known as defined contribution retirement plans. Income from traditional pensions, called defined benefit plans, has been exempt from Alabama’s state income tax for decades, including those from both public and private employers.

To see details in the legislation, click here.



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