Update 2025 Alabama income tax

[hua7450]

Summary

Fixes #7190 - Updates 2025 Alabama income tax parameters.

Changes

• Updated standard deduction phase-out thresholds for 2025
• Added 2025 references to parameter files

---

Old Features Not Implemented

The following Alabama income tax features from the 2025 Form 40 Instructions are not currently implemented in PolicyEngine:

Feature	Form Reference	Description
Qualified Long-Term Care Premiums	Schedule A, Line 26	Fully deductible (no AGI floor). NOT included in medical expenses.
Gambling Losses	Schedule A, Line 25	Deductible to extent of winnings. NOT subject to 2% AGI floor.
Railroad Retirement Tax (Tier 1)	Schedule A, Line 7	Employee's Tier 1 contribution is deductible as itemized deduction.
City/County/Occupational Tax	Schedule A, Line 8	As reported on W-2.
Personal Property Taxes	Schedule A, Line 8	Tax based on vehicle value (not weight-based portion).
Federal Gift Taxes	Schedule A, Line 8	Deductible if taxpayer made the gift and paid the tax.
Generation-Skipping Transfer Taxes	Schedule A, Line 8	GST taxes imposed on income distributions per 26 U.S.C. §2601.

New Features (2025) Not Implemented

The following new features from the 2025 Form 40 Instructions are not currently implemented:

Feature	Legal Authority	Description
Vehicle Loan Interest Deduction	Section 40-18-15	New for 2025-2028. Interest on qualified vehicle loans (US final assembly, personal use). Cap: $10,000. Phaseout: $100k single / $200k MFJ. See page 20.
Sound Money Tax Neutrality Act	Act 2024-447	Amends Section 40-18-14 to exclude net capital gains from precious metal bullion exchange from state income taxes. See page 7.
Military Income Exemption	Act 2024-170	Amends Section 40-18-3 to expand state income tax exemption on military pay for certain compensation of National Guard and Reserve members deployed outside US or activated for emergencies. See page 7.
Alabama Workforce Housing Tax Credit	Act 2024-302	Annual credit up to $2M per project for up to 10 years for qualified workforce housing projects. Administered by Alabama Housing Finance Authority. See Schedule OC.
Childcare Facility Tax Credit	Act 2024-303	Tax incentive for Alabama childcare providers who own and operate a qualified facility. Based on facility's quality rating and average monthly eligible children. See Schedule OC.
Employer Tax Credit	Act 2024-303	Tax incentive for Alabama employers (non-childcare providers) who support employees' childcare needs by offering financial assistance. See Schedule OC.
Employer Provider Credit	Act 2024-303	Tax incentive for Alabama childcare providers who incur eligible expenses for operation, maintenance, and/or updates of a qualified childcare facility. See Schedule OC.

[codecov]

Codecov Report

✅ All modified and coverable lines are covered by tests.
✅ Project coverage is 73.29%. Comparing base (f6b4cbb) to head (2e0d0cd).
⚠️ Report is 26 commits behind head on main.

Additional details and impacted files

@@             Coverage Diff              @@
##              main    #7192       +/-   ##
============================================
- Coverage   100.00%   73.29%   -26.71%     
============================================
  Files            1     3665     +3664     
  Lines           22    52702    +52680     
  Branches         1      263      +262     
============================================
+ Hits            22    38626    +38604     
- Misses           0    14047    +14047     
- Partials         0       29       +29     

Flag	Coverage Δ
unittests	73.29% <ø> (-26.71%)	⬇️

Flags with carried forward coverage won't be shown. Click here to find out more.

☔ View full report in Codecov by Sentry.
📢 Have feedback on the report? Share it here.

🚀 New features to boost your workflow:

• ❄️ Test Analytics: Detect flaky tests, report on failures, and find test suite problems.