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Senate approves bill to untax families’ ARPA benefits

By MARY SELL, Alabama Daily News

The Alabama Senate on Thursday approved a bill ensuring that Alabama families aren’t penalized on their state income taxes for the expanded tax credits received under the American Rescue Plan Act.

Sen. Dan Roberts, R-Mountain Brook, said if the state doesn’t act and change its tax code, Alabamians would pay an extra $87 million in state income taxes.

“These individuals qualified for tax relief because they showed up for work during the pandemic, so it would be outrageous to punish them, especially when they were doing what was necessary during difficult times to provide for themselves and their families,” Roberts said.

Rep. Jim Carns, R-Vestavia Hills, is sponsoring the House version of the bill.

Those ARPA benefits for families were an increased child tax credit, increased dependent care credit and increased and modified earned income credit. Taxpayers had to have earned income from work to be able to claim the later two.

In all, the three provisions totaled about $2 billion in additional pandemic relief benefits for Alabama families.

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