Alabama taxpayers to get one-time income tax rebate of $150 for individuals to offset sales taxes paid on groceries

Alabama taxpayers will get a one-time income tax rebate of $150 for individuals and $300 for those filing jointly, under Act No. 2023-377 / Act No. 2023-511. The rebate is not taxable income.

The rebate by Sen. Arthur Orr, R-Decatur, and Rep. Danny Garrett, R-Trussville, received final approval May 25 and was signed into law June 1.

Starting Nov. 30, 2023, anyone who filed a 2021 Alabama tax return before Oct. 17, 2022, will get a rebate sent electronically to their bank account or by check if the state doesn’t have their bank information.

The estimated $393 million cost of the rebate will be paid out of the 2023 fiscal year supplemental appropriation that allocates a $2.8 billion surplus from the state’s Education Trust Fund.

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Gov. Kay Ivey originally proposed rebates of $400 for individuals and $800 for those filing jointly due to a surplus in the state’s education budget. The amounts proposed changed two other times before the Senate and House agreed on the final number. The law says the reason for the one-time refund is “to partially offset the amount of sales tax paid on groceries” during 2021.


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