Alabama Tax Break for Overtime Pay Wins Statehouse Approval (1)

Alabama is poised to exempt hourly workers’ overtime pay from the state income tax, under a first-of-its-kind measure that supporters say could help address the workforce shortage.

The legislation (HB 217) won final passage from state lawmakers Tuesday, when the House and Senate unanimously approved changes requested by Gov. Kay Ivey (R) to remove a $25 million cap on the total annual amount of the tax break and shorten the exemption’s lifespan before it expires.

“Eliminating the $25 million annual cap will make the bill easier to administer for employers and potentially put more money in the pockets ...