Governor Ivey Signs Bill to Provide Tax Relief to Hardworking Alabamians

MONTGOMERY – Governor Kay Ivey on Thursday signed House Bill 527 into law. The legislation, sponsored by Rep. James Lomax and Sen. Arthur Orr, provides an income tax deduction for qualified overtime compensation, up to $1,000. HB527 also suspends the state’s portion of the grocery tax for two months beginning in May.

“Alabamians are the best workers out there. I applaud Rep. James Lomax and Sen. Arthur Orr for working with us to provide tax relief to those employees putting in overtime,” said Governor Ivey. “I am also glad we are able to put a two month pause on the state’s portion of the grocery tax to help families across Alabama. Any time we can responsibly provide some relief for the hardworking people in our state, I am all for it.”

Rep. James Lomax joined Governor Ivey in her office as she officially signed HB527 into law.

“HB527 provides meaningful, direct tax relief by delivering real savings at the grocery store for all families and rewarding hardworking Alabamians by recognizing the value of overtime work,” said Rep. Lomax. “By creating a deduction on overtime pay and temporarily suspending the state sales tax on food, this legislation puts money back into the pockets of families when they need it most. I’m grateful to my colleagues in the Legislature for their support in getting this bill across the finish line, and I thank Governor Ivey for her continued leadership in supporting the people of Alabama.”

Sen. Arthur Orr carried the legislation in the Senate.

“I want to commend my colleagues in the Legislature for passing legislation that provides hardworking Alabamians with well-deserved tax relief on overtime pay, as well as some temporary tax relief at the grocery store that will benefit families across the state,” said Sen. Orr. “This reflects a strong commitment to easing the financial burden on Alabama families while encouraging productivity and economic growth, which are priorities Governor Ivey has emphasized since day one.”

The income tax reduction for overtime compensation will apply for tax years 2026 through 2028. The grocery tax suspension will occur May 1, 2026 through June 30, 2026.

A photo of Governor Ivey signing HB527 is attached.

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