State Rep. James Lomax (R-Huntsville) has filed legislation that would allow Alabama workers to deduct up to $1,000 in overtime pay from their state income taxes.

HB527 would create a state income tax deduction for qualified overtime compensation, providing targeted relief to hourly and salaried workers who earn overtime pay.

“Affordability is the number one issue in our country, and I want Alabama to be a state that prioritizes lightening the load for its working families,” Lomax said. “My legislation follows the lead President Trump set in the Big Beautiful Bill by providing up to $1,000 in income tax deductions for overtime. The people of Alabama deserve to keep more of their hard-earned money, and I am committed to making sure that is exactly what happens.”

The federal One Big Beautiful Bill Act, signed by President Trump on July 4, 2025, included a similar overtime tax deduction at the federal level. Lomax’s bill would extend that relief to Alabama’s state income tax.

HB527 has been filed and awaits committee assignment.

Thursday was the 17th day of the legislative session.

Sawyer Knowles is a capitol reporter for Yellowhammer News. You may contact him at [email protected].