Bill exempting overtime pay from state taxes heading to Senate

BIRMINGHAM, Ala. (WBRC) - If you work over 40 hours a week, a bill heading to the Senate could put more money in your pocket. HB217 exempts overtime pay from state income taxes.

The House of Representatives passed the bill unanimously on Tuesday. Representative Anthony Daniels says it’s the first of it’s kind.

“No other state in the union offers anything like this,” said Rep. Daniels. “Never even been introduced, so it’s a new idea but it’s a result of seeing ‘Now Hiring’ signs from Mobile to Huntsville.”

He says the bill will help workers take home 5% more from overtime than you would before, adding that some families are in desperate need of that extra income.

Typically, Alabama taxes all money earned from working, under or over 40 hours, up to around 5% of your paycheck.

“Think about what you could do with that additional 5%, especially in light of where our economy is today,” said Rep. Daniels. “Right now we’re experiencing higher prices whether it’s at a grocery store or a retail store.”

But it’s not just good for employees, Daniels says employers benefit too because people will be more willing to work those additional hours.

“It also helps increase productivity for the employer,” he explains. “Being able to allow businesses to be able to produce at or ahead of schedule... It’s a win-win situation that’ll bring business, people and unions all together on the same accord.”

Representative Daniels is now urging anyone in favor of the bill to contact your Senate leaders to help get it passed.

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