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Alabama State Tax Compliance Bulletin

Starting January 1, 2024, Alabama hourly employees will no longer pay state income tax on pay earned for working over 40 hours a week.
Business Compliance Bulletin

Starting January 1, 2024, Alabama hourly employees will no longer pay state income tax on pay earned for working over 40 hours a week.

Visit Alabama.gov for information on overtime exemption, including FAQs, filing specifications, and employer reporting requirements.

Required Employer Reports

Included with this exemption are new reporting requirements for employers. Employers will be required to report:

   1. The total aggregate amount of exempt overtime wages.

   2. The total number of employees who received the exempt overtime wages.

2023 Historical Report: This year’s overtime data must be filed electronically by January 31, 2024, along with Form A3.

Monthly and Quarterly ReportsStarting from the 2024 tax year, these figures will be submitted electronically on either the monthly Form A6 or quarterly Form A1 withholding returns.

The exemption from overtime wage for hourly work will expire on June 29, 2025, unless the legislature extends it.

Customized, Scalable HRIS Software 

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