From January onwards, hourly employees working full-time in Alabama will not have to pay the state’s 5% income tax on any hours worked over 40. This new law is considered to be the first of its kind in the United States.
A new law was passed last session, and its effects are already being felt. In fact, on Thursday, the governor and state officials participated in a ceremonial bill signing at Hyundai Motor Manufacturing in Montgomery. This marks a significant step forward for the state, as it means that progress is being made towards achieving important goals.
According to Hyundai, the majority of their workforce consists of approximately 4,000 hourly employees who have the opportunity to earn overtime. Although this law will significantly impact their employees, it’s not only those working at Hyundai who will experience the advantages.
Surrounded by lawmakers who advocated for its passage, Gov. Kay Ivey ceremonially signed the bill, stating that it will allow numerous Alabamians to bring home a higher income.
“The hardworking mentality displayed by employees across our state is being celebrated and rewarded through House Bill 217,” stated Gov. Ivey.
Lawmakers must renew the tax exemption before the sunset date in 2026, according to Daniels. It is crucial to take action during the upcoming or following session. According to Daniels, getting 5% of time and a half is much more beneficial than getting 5% of the base pay.
According to Daniels, although the tax cut will have an estimated $45 million impact on the education budget, it’s important to consider the bigger picture. He believes that when individuals have more money in their paychecks, they tend to spend more, which could potentially balance out the revenue impact. Alabama’s Overtime Tax Cut Bill Receives Ceremonial Signing in Montgomery
The state of Alabama recently passed a bill to reduce state income taxes on overtime pay. This bill was officially signed into law in a ceremony held in Montgomery, the state capital. The new law will go into effect on January 1, 2022, and will benefit thousands of Alabamians who work overtime hours.
The signing ceremony was attended by several state officials, including Governor Kay Ivey and other lawmakers who supported the bill. The bill is aimed at encouraging productivity and rewarding hardworking Alabamians who put in extra hours on their jobs. Overall, this new law is expected to have a positive impact on the state’s economy and workforce.
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