Governor Kay Ivey has announced a measure that will benefit nearly 1.9 million state residents by issuing tax refund checks. It is important to note that estates, trusts and individuals who do not file their individual tax returns in Alabama, as well as estates, trusts and individuals claimed as dependents on Alabama federal or state tax returns for 2021, will not be eligible for this refund.
Governor Ivey said, “While we actively seek ways to support citizens during difficult times, I have believed from the beginning that it is the government’s responsibility to effectively manage taxpayer funds. Our nation is going through tough times, and unfortunately, Alabama families are experiencing financial stress.
Thanks to our strong commitment to fiscal responsibility, this one-time tax refund will support our Alabama workers come the holidays.
As for the payment date, eligible residents are expected to receive refunds in their bank accounts beginning December 1, 2023, based on information provided on 2021 Alabama state tax returns.
For those without a registered bank account, the refund will be sent in the form of a paper check. Additionally, this refund will be exempt from Alabama income tax for the 2023 tax year and cannot be used to settle tax debts or any other type of debt, ensuring that the full amount reaches the beneficiaries.
How much help?
Initially, different refund amounts were proposed, with Governor Ivey proposing $400 for single filers and $800 for joint filers.
However, a conference committee approved a compromise that lowered the fee to $150 for individual filers and $300 for joint filers.
Because Alabama is one of the few states that imposes a food tax, the primary purpose of this refund is to offset food taxes paid in 2021. Funding for these rebates comes from the Education Trust Fund, where food taxes play an important role in funding public schools.
Other states, such as Minnesota and New Mexico, have approved similar one-time rebate check initiatives for 2023.
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