Can’t afford a storm shelter? Alabama’s $ 3,000 Housing Tax Credit Starts 2022

LEE COUNTY, Alabama (WRBL) – All homeowners in Alabama are eligible for a $ 3,000 Alabama tax credit for storm shelters installed after January 1, 2022. Credit is not retroactive . The legislation, led by Auburn Representative Joe Lovvorn, honors the lives lost in Lee County in the March 3 tornadoes.

Earlier this year, Troy Hardey showed News 3 the storm shelter he has set up next to his Lee County home.

“It’s six or seven inches thick and weighs about 33,000 pounds and is built to withstand an EF-5. I hope we never get to use it, but just having it here gives us a sense of security, ”said Hardey.

Hardey’s family survived the March 3 tornadoes. They threw a mattress over their young grandchild and weathered the storm. However, the damage to their property was significant. After the disaster, Hardey and 157 families in Lee County applied for a FEMA shelter grant, which earned them a 75 percent refund. Unfortunately, the grant is now closed. However, beginning in the first of 2022, families in Alabama are eligible for a state tax credit for the construction, acquisition or installation of a qualified storm shelter. The credit will be up to 50% of the cost up to $ 3,000.

“We set a cap of $ 2 million per year for three years. Serving as the first responder to many tornadoes over the years, I think we need to find ways for the people of Alabama to put safety first. This bill would allow them to recover part of their investment through tax savings. A Storm Shelter Tax Credit is not a solution for everyone, but it is another way to deliver tax savings to people that could save their lives, ”said Joe Lovvorn, Alabama House District 79 representative.

Lee County Emergency Management Agency director Rita Smith said the requirements were specific. The tax credit is not retroactive. The shelter must be FEMA approved, able to withstand an EF-5 tornado and built on your property. The documents will be processed by the Alabama Emergency Management Agency and the Alabama Revenue Department. The agency is setting up a website to help Alabama families navigate the paperwork. Smith says local EMAs are there to help families figure out the details.

“If you call us, we’ll walk you through and tell you what to do,” Smith said.

Read the legislation: Ala code. § 40-NEW
Up to date with the legislation of the second extraordinary session of 2021.
Article 40-NEW – Definitions; storm shelter tax credit

(a) As used in this Act, the following terms shall have the following meanings:
(1) MANUFACTURED HOME. Any structure built to manufactured home construction and safety standards that displays a red certification label on the outside of each transportable section.
(2) PRIMARY RESIDENCE. Any manufactured home or single-family home which is the taxpayer’s full-time legal residence and which is used for the purposes of calculating the taxpayer’s income tax.
(3) QUALIFIED STORM SHELTER. A storm shelter or safe to which all of the following conditions apply:
a. The design is able to withstand an EF5 tornado.
b. The shelter or bedroom is put into service as an attachment to the taxpayer’s primary residence, or on the same lot or plot as the primary residence, and no other qualified storm shelter is attached to the primary residence or on the lot.
vs. The shelter or room meets or exceeds the most recent minimum criteria of the Federal Emergency Management Agency for the design, construction and operation of residential secure rooms.
D. The shelter or room is built on the site of the taxpayer’s primary residence or is manufactured off-site and installed on the site of the taxpayer’s primary residence.
(4) INDIVIDUAL RESIDENCE BUILDING. A structure designed according to international residential codes or its predecessor codes.
(b) An Alabama Income Tax Credit is established for qualifying taxpayers who incur costs for the construction, acquisition or installation of a qualified storm shelter at their primary residence in the ‘State. The tax credit is equal to three thousand dollars ($ 3,000) or 50% of the total cost of the construction, acquisition and installation of the storm shelter eligible for the primary residence, depending on the lesser of the two. The total costs for the purposes of calculating the tax credit under this paragraph excludes all costs reimbursed or to be reimbursed by any other entity, including, but not limited to, insurance reimbursements, grants or other government subsidies or incentives. The tax credit must be used in the tax year in which the taxpayer obtained a tax credit certificate under paragraph (f).
(c) The tax credit granted under this Act may not reduce the tax payable of a taxpayer to less than zero. If the taxpayer’s tax payable is less than the tax credit granted under this Act, the taxpayer may only use the amount of the credit which reduces the taxpayer’s tax payable to zero. The tax credit is neither refundable nor transferable and cannot be carried over. A taxpayer claiming the tax credit can only claim the tax credit for the year in which the qualifying storm shelter was acquired, constructed or installed, regardless of tax liability. of the taxpayer.
(d) The Ministry of Revenue grants the tax credit on state income tax which is due by the taxpayer holding the tax credit certificate issued under paragraph (f) for the amount indicated on the tax credit certificate, subject to the limitations of paragraph (c). The department may audit and reassess any credit improperly obtained by the taxpayer, in accordance with the Alabama Taxpayer Bill of Rights and the Uniform Tax Procedures Act under Chapter 2A of Title 40, Code of Alabama 1975.
(e) The tax credit authorized by this Act is limited to an aggregate amount for all taxpayers of two million dollars ($ 2,000,000) annually.
(f) Before claiming the income tax credit allowed under paragraph (b), the taxpayer must file an annual information report in a manner prescribed by the Alabama Emergency Management Agency , which includes information reflecting the costs of constructing, acquiring, or installing the qualified storm shelter at the primary residence, as well as additional information required by the Alabama Emergency Management Agency. Upon receipt of all of the information required by this paragraph, the Alabama Emergency Management Agency issues a tax credit certificate to the taxpayer claiming the credit. Tax credit certificates will be issued on a first come, first served basis until the annual limit provided for in paragraph (e) is reached. In the event that tax credit bookings are equal to the total amount available for bookings in the tax year, all eligible taxpayers whose claims are then pending approval or subsequently submitted must be advised in the manner prescribed by the Emergency Management Agency of Alabama that no additional tax credits will be granted in that tax year and, notwithstanding paragraph (b), will be permitted to claim a tax credit certificate in the following tax year, subject to the limitations of paragraph (c).
(g) The Alabama Emergency Management Agency shall prepare a report detailing the number of qualified storm shelters constructed, acquired and installed and the amount of tax credits claimed under this Act. The information on the report should be consistent with the information required under Section 40-1-50, Code of Alabama 1975, and rules adopted by the Department of Revenue. Information provided under this section is exempt from the confidentiality provisions of Section 40-2A-10, Code of Alabama 1975, and must be provided by the Alabama Emergency Management Agency to the Legislature in accordance with the section 40-1-50, Code of Alabama. 1975, and the rules adopted by the Ministry of Revenue.
(h) The Alabama Emergency Management Agency may make rules to implement and administer this law.
(i) The tax credit granted under this section will come into effect on January 1, 2022, for tax year 2022, and will continue throughout tax year 2025, unless it is not extended by an act of the Legislature.
Ala code. § 40-NEW (1975)

Added by law 2021-540, § 1, eff. 08/01/2021.