State income tax bill clears House, moves to Senate - Montgomery Alabama news.

State income tax bill clears House, moves to Senate

(Source: WSFA 12 News) (Source: WSFA 12 News)

The Alabama House approved House Bill 346, a measure by Rep. Chris Blackshear, Thursday. The bill would create a simplified state income tax form and allow filers who forego deductions to receive a tax cut. 

"Creation of this new, simplified form is a victory for taxpayers who utilize it because they can finish their taxes within minutes with no complicated calculations, and it is a victory for the state because it brings added efficiency and reduces the man hours needed to process tax returns," Blackshear, R- Smiths, said in an Alabama House press release. "At the same time, it rewards taxpayers who use the form and do not claim deductions by providing them with a tax cut."

The measure creates an optional 40EZ state income tax form, available to full-time state residents earning less than $100,000 a year and claiming no non-wage income. 

Single taxpayers and married taxpayers filing jointly can use the form.

Blackshear says the form will be especially beneficial for taxpayers without dependents and who claim no itemized deductions or tax credits. The form should also minimize the threat of identity theft when filing state tax returns. 

In exchange for foregoing itemized deductions and credits, single filers on the new 40EZ form would claim a standard deduction of $2,250, as opposed to the $2000 standard deduction claimed by those using the regular form. Married filers would use a $4,500 standard deduction, as opposed to the $4000 deduction used by other married couples. 

A fiscal note attached to the bill estimates its implementation would reduce annual revenues in the Education Trust Fun by $600,000 a year. Currently, the trust fund equals roughly $4.6 billion.

If the Senate approves the bill, and if it is signed by the governor, the new law would go into effect for the tax year beginning on Jan. 1, 2018.

Copyright 2017 WSFA 12 News. All rights reserved. 

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