Alabama workers slapped in the face

Failure to Extend Overtime Tax Takes Money out of Taxpayer Pockets - Alabama Policy Institute

BIRMINGHAM, ALABAMA — Failure to Extend Overtime Tax Takes Money out of Taxpayer Pockets Nearly two years ago, the Alabama Legislature enacted a first in the nation reform to exclude overtime income from the calculation of the state’s individual income tax. In a state that consistently has one of the lowest labor participation rates in the nation (57.8% in March 2025), the exemption has been a “game-changer”, increasing overtime work volume and …

Alabama workers slapped in the face

Last year, when Alabama House Minority Leader Anthony Daniels led the bipartisan passage of the state tax exemption on overtime pay (the first of its kind in the nation), Alabama workers were ecstatic because it provided a meaningful way for them to combat the skyrocketing cost of living. They could immediately see the increase in their take-home pay– pay they earned by going above and beyond. Overtime pay that helped them offset rising grocery,…