5 New Alabama State Laws Taking Effect on January 1st

Here are five of the most significant changes arriving in Alabama this New Year.

1. The Consumable Hemp Product Crackdown (HB 445)

Starting January 1, 2026, the wild west of "hemp-derived" edibles and beverages in Alabama is coming to an end. This law introduces strict new oversight for products containing cannabinoids like CBD and Delta-8.

• The Regulation: Consumable hemp products can now only be sold by retailers licensed by the ABC Board. Furthermore, products intended for ingestion or absorption must be sold through licensed pharmacies that have obtained specific certification from the State Board of Pharmacy.
• Packaging and Potency: All products must be in original, sealed containers with clear "certificates of analysis." Servings are capped at 10mg of total THC for beverages and edibles, with a maximum of 40mg per package.
• Enforcement: Any product sold in violation of these rules after January 1 is considered contraband and can be seized without a warrant.

2. The 30-Day "Safe Harbor" Tax Exemption (HB 379)

Alabama is making a significant push to attract mobile workers and short-term business travelers by simplifying the State income tax code.

• The Exemption: Beginning January 1, nonresident employees who work in Alabama for 30 days or fewer in a calendar year are exempt from Alabama state income tax and withholding.
• The Catch: This "safe harbor" only applies if the worker's home state offers a similar exemption or has no income tax. If a worker stays for 31 days, the exemption is voided, and taxes are owed for the entire duration of their stay.
• The Goal: This aligns Alabama with national "mobile workforce" standards, reducing the administrative burden on out-of-state companies doing temporary work within the state.

3. The CHOOSE Act: Application Portal for New Families

While the landmark "Creating Hope and Opportunity for Our Students' Education" (CHOOSE) Act was passed in 2024, January 2026 marks a massive milestone for Alabama families looking to switch to private or home schooling.

• The Portal: On January 2, 2026, the state officially opens the application portal for new families to apply for Education Savings Accounts (ESAs) for the 2026–2027 school year.
• The Funding: Eligible families can receive up to $7,000 per student for private school tuition or $2,000 for home education expenses.
• Eligibility: For this cycle, the program remains focused on families with an adjusted gross income not exceeding 300% of the federal poverty level, before it opens to all families regardless of income in 2027.

4. Increased Earnings Limit for Retirees

For thousands of Alabamians who have retired from state or local government but wish to return to the workforce part-time, 2026 brings more financial breathing room.

• The New Cap: The Retirement Systems of Alabama (RSA) has officially raised the post-retirement earnings limit to $40,000 for the 2026 calendar year.
• The Rule: Retirees can work for an RSA-member agency without losing their pension benefits, as long as their annual compensation does not exceed this new cap.
• The Benefit: This is a significant increase from previous years and is designed to help fill critical staffing gaps in local government and law enforcement with experienced former employees.

5. Presumptive Eligibility for Pregnant Women (Medicaid Expansion)

To improve maternal health outcomes across the state, a new Medicaid policy officially enters its complete implementation phase this January.

• The Law: Under SB 102, Alabama is implementing "presumptive eligibility" for pregnant women. This allows healthcare providers to immediately enroll pregnant women in Medicaid if they appear to meet income requirements.
• The Impact: Instead of waiting weeks for an application to be processed, women can receive prenatal care, screenings, and vitamins immediately. This change is aimed at reducing Alabama's high maternal mortality rate by ensuring care begins as early as possible in the first trimester.

Would you like me to help you find the application link for the CHOOSE Act portal or provide the specific packaging requirements for the new hemp law?

New job opportunities for retired law enforcement. This video explains how pre-filed legislation for the 2026 session aims to expand employment opportunities for retired law enforcement officers in Alabama.