You are partially correct regarding the Alabama deduction for health insurance premiums for small employers. If qualified, you can deduct 100% of the premiums paid instead of 50%.
The following is an excerpt from the AL Instruction Booklet for Individual Income Tax Form 40:
Health Insurance Premium Deduction
Alabama resident taxpayers may deduct from Alabama gross income 100 percent of the amounts that they pay as health insurance premiums as part of an employer provided health insurance plan who are employed by an employer that has less than 25 employees and earns no more than $50,000 of wages and reports no more than $75,000 of adjusted gross income on their Alabama individual income tax return or $150,000 if married filing joint.
TurboTax will not automatically carry the information entered on your W-2 to the AL return. You must enter the amount manually.
As you go through the AL return, look for the screen titled 'Let's check for any Alabama deductions'. Click Start or Update beside Health Insurance Expense and answer the questions in that section to see if you qualify for the deduction.
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