Alabama residents are set to receive a one-time tax rebate of $300, and the Alabama Department of Revenue will start issuing these payments on Friday. The payments will be distributed via paper check or direct deposit, depending on how residents received their 2021 tax refund. Approximately 1.9 million residents are expected to benefit from this initiative.

$393 Million in Rebates Funded by Surplus

The state of Alabama will allocate around $393 million in rebates, and these funds come from a substantial $2.8 billion surplus in the Education Trust Fund. This surplus has allowed the state to provide financial relief to its residents.

Refund Conditions and Amounts

To be eligible for the rebate, residents must have filed their 2021 individual income tax return by October 17, 2022, at the latest. The rebate amounts are $150 for single filers and $300 for married couples filing jointly. There are no income restrictions or phase-outs, making a broad range of residents eligible for the rebates.

Exceptions to Rebate Eligibility

While the majority of residents will benefit, certain individuals won’t be eligible for the tax refund. This includes those who failed to submit their 2021 state Individual Income Tax return by the October 17, 2022 deadline, individuals residing outside the state, trust or estate accounts, and those who made a dependent claim in the tax year 2021.

Distribution Methods and Tax Exemption

For eligible residents who did not receive a refund for the 2021 tax year, paper check rebates will be mailed to the current address on file with the state revenue department. Residents who changed their banking information or used a tax preparer’s account for their 2021 refund will also receive paper checks. Importantly, state taxes will not apply to these rebate payments, providing additional relief to Alabama residents.