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NOTICE Frequently Asked Questions – Storm Shelter Credit (Act 2021-540)

Posted: January 26, 2022
  • When can I claim the storm shelter credit?
    • January 1, 2022, through the 2025 tax year, unless extended by an act of the Legislature.
  • Do I qualify for the credit if I already have a storm shelter?
    • No. A taxpayer applying for the tax credit can only do so for the year in which the qualified storm shelter was acquired, constructed, or installed.
  • What is a qualified storm shelter?
    • A qualified storm shelter is defined as a storm shelter or safe room to which all of the following apply:
      • The design is capable of withstanding an EF5 tornado.
      • It is placed in service as an attachment to the taxpayer’s primary residence, or on the same lot or parcel as the primary residence where no other storm shelter previously exists.
      • It meets or exceeds the most recent Federal Emergency Management Agency minimum criteria for the design, construction, and operation of residential safe rooms.
      • It is built on the site of the taxpayer’s primary residence or is manufactured offsite and installed on the site of the taxpayer’s primary residence.
  • What is the amount of the tax credit?
    • $3,000 or 50 percent of the total cost of the construction, acquisition, and installation of the qualified storm shelter, whichever is less. The total costs will exclude any costs reimbursed or expected to be reimbursed by any other entity.
    • The tax credit issued is not refundable or transferable. It also cannot decrease the taxpayer’s tax liability to less than zero.
  • How do I apply for the credit with the Alabama Emergency Management Agency (AEMA)?
    • The taxpayer will file an annual informational report with the AEMA. More information for this report and how to obtain a credit certificate can be found at https://ema.alabama.gov/.
  • How do I claim the credit on my tax return with the Alabama Department of Revenue (ALDOR)?
    • ALDOR will require the credit certificate issued to the taxpayer by the Alabama Emergency Management Agency. The credit will need to be pre-certified through My Alabama Taxes (https://myalabamataxes.alabama.gov) under the taxpayer’s name shown on the credit certificate. In the “Individuals” pane, click on “Submit an Individual Credit Claim.” The credit claim MUST be submitted in the name of the individual listed on the certificate, even when filing a joint tax return. Failure to submit the required certificate, credit claim, and other documents in this manner will result in the credit being disallowed.

*For more information regarding claiming the credit on your income tax return contact the Audit and Appeals, Compliance Unit at 334-353-9770.