A new Alabama overtime law will allow hourly employees who work overtime to keep more of their earnings. While the overtime income tax exemption benefit is temporary (as of now), it will provide some financial relief for Alabama employees who work overtime. Of the 41 states that impose an income tax, Alabama is the only one to exempt overtime pay.
“I believe that this will not only allow hard-working Alabamians to keep more of what they earn, but it will also help businesses by helping them retain employees in a tight labor market,” said Alabama House Minority Leader Anthony Daniels, who sponsored the bill.
