$300 Alabama Tax Rebate Check: Who Will Get It, How Much and When?

Alabama Tax Rebate Check

Alabama tax rebate checks were finally signed into law last week by Gov. Kay Ivey. Lawmakers negotiated heavily on the rebate check amount and eventually decided to send a one-time payment of up to $300. The rebate checks will start to go out this fall.

Alabama Tax Rebate Check: Who Will Get It And When To Expect It?

Alabama is sending rebate checks to help residents offset the grocery taxes they paid in 2021. The state largely allocates grocery taxes for public schools through the Education Trust Fund. Alabama will use the money from the Education Trust Fund to send the rebate checks.

“And thanks to the work of the Alabama Legislature, we continue making these wise investments while paying down debts, adding to our savings and returning the working people of Alabama’s money back to them through tax rebate,” Gov. Ivey said in a press release.

To qualify for the Alabama tax rebate check, you must have filed a state income tax return for 2021. It must be noted that estates and trusts won’t be eligible for the rebate. Also, those claimed as a dependent on a 2021 federal or Alabama state income tax return won’t qualify for the rebate as well.

Eligible recipients will get the rebate checks as early as Nov. 30, 2023. Alabama will send the rebate checks to the bank accounts listed on the taxpayers’ 2021 state tax return. Those who haven’t listed a bank account on their 2021 return will get a paper check.

Recipients won’t have to pay income tax on the rebate money. Also, the rebate money won’t be subject to debt collection. So, even if you owe state taxes or have other state debts, your rebate money won’t get chipped.

How Much Money To Expect

Single filers (head of household or married filing separately) will get a $150 Alabama tax rebate check, while married filing jointly will get $300. The rebate amount was changed twice during negotiations, but lawmakers eventually agreed on $150.

Gov. Ivey initially proposed a one-time rebate of $400 for single filers ($800 for joint filers). The state Senate committee, however, proposed a smaller rebate payment of $105 ($210 for joint filers). The state House proposed to double the rebate amount, but the proposal failed to get support. 

Eventually, a conference committee approved a compromise of $150 for individual taxpayers. Arthur Orr, Chairman of the Senate Finance and Taxation Committee, noted that the lawmakers settled on a rebate amount that they thought would be significant but still affordable for the state.

“We’re not going to raise taxes. So if we give away too much, then what happens? We start cutting and that affects the children across the state and educational delivery across this state,” Orr said in a statement.

Senators approved the final amount by a 27-4 vote, while representatives voted 103-0 for the compromise amount. Alabama tax rebate checks are estimated to cost the state about $393 million.