H3 - Act 48 Homestead

The H3 Homestead Exemption, also known as Act 48 Homestead, may be available to homeowners who are 65 years of age or older and meet the applicable federal income requirements, or who are retired due to total and permanent disability and meet the applicable requirements.

To qualify for the H3 exemption based on age and income:

• The property owner(s) must be 65 years of age or older.
• The owner(s) must have a combined net federal taxable income of $12,000 or less on their most recent United States Federal Income Tax Return.
• The Revenue Commissioner's Office is required to verify the date of birth for property owners to confirm that they are 65 years of age or older.
• Effective April 1, 2026, taxpayers age 65 or older who do not file a federal income tax return must provide verification of non-filing directly from the Internal Revenue Service (IRS).
• To obtain verification of non-filing, the taxpayer must complete and submit IRS Form 4506-T to the IRS.
• The IRS typically takes approximately 10 business days to issue the verification letter.
• The IRS non-filing verification letter is required for the initial assessment.
• After the initial assessment, an annual recertification form must be completed to maintain the H3 age/income exemption.
• If the taxpayer does not return the annual recertification form or no longer qualifies because of an increase in federal income, the exemption will be removed.
• If the exemption is removed, the taxpayer must meet the applicable requirements again to receive the exemption.

To qualify for the H3 exemption based on disability:

The owner/occupant must be retired due to total and permanent disability through the Social Security Administration (SSA), Veterans Affairs (VA), another government agency, or another qualifying entity.

Acceptable documentation may include:

• An SSA award letter or benefit verification letter stating the effective date the owner was determined to be totally and permanently disabled. The owner had to be  retired due to the disability before reaching age 65.
• A VA award letter or benefit verification letter stating the effective date and that the individual is totally and permanently disabled.
• Documentation of a pension or annuity received due to total and permanent disability from a private company or state or federal government agency, such as the Railroad Retirement Board.
• Affidavits from two Alabama-licensed physicians verifying the owner's total and permanent disability.

Annual Recertification

After the initial assessment, an annual recertification form must be completed to maintain the H3 disability exemption, unless the exemption is based on qualification through Veterans Affairs.

Code of Alabama 1975, Title 40-9-21