Alabama Income Tax Calculator 2026
See your Alabama state tax, effective rate, and take-home pay in 60 seconds.
Estimate only. Uses 2026 federal figures, Alabamastate figures (see sources below), and a standard-deduction federal calculation. Filing status “Head of household” uses the single column for Alabama. Your actual tax depends on credits, additional income, and adjustments.
Worked example: A single filer earning $85,000 in Alabama
Start with $85,000 of wages. After the $3,000 state standard deduction, running it up Alabama's brackets produces about $4,060 in state income tax — an effective state rate near 4.8%, with a 5% marginal rate. Federal income tax and FICA are calculated separately and shown in the calculator above.
Assumes a single filer taking the standard treatment. Figures are educational estimates.
How Alabama taxes income
Alabama uses a graduated income tax: your income is taxed in slices, with each slice taxed at a higher rate as you move up the brackets from 2% to 5%.
Alabama generally starts from your federal income, applies state-specific adjustments and deductions, and then runs the result up the brackets. Credits and exemptions can change the final number — confirm the current details with the Alabama Department of Revenue.
2026 rate structure
| Rate | Single — taxable income up to | MFJ — taxable income up to |
|---|---|---|
| 2.00% | $500 | $1,000 |
| 4.00% | $3,000 | $6,000 |
| 5.00% | and above | and above |
Retirement income & Social Security
Alabama generally taxes retirement income such as 401(k), IRA, and pension distributions, though it may offer exclusions, deductions, or credits for certain pension or retirement income and for older taxpayers. Confirm the current exclusions with the Alabama Department of Revenue.
Local taxes & reciprocity
Some Alabama municipalities levy a local occupational tax on wages earned within the city.
Reciprocity: Alabama has no income tax reciprocity agreements. If you work across state lines, you generally file a non-resident return where you work and claim a credit to avoid double taxation.
Notable deductions, credits & other taxes
Deductions & credits
- Alabama standard deduction (about $3,000 single / $8,500 MFJ in this model — verify current amounts)
- Credit for income taxes paid to other states (for residents with out-of-state income)
- State versions of common credits — earned income, child/dependent care, and education credits — where offered
Capital gains: Alabama has no separate capital gains rate. Capital gains included in your federal AGI are taxed as ordinary income at Alabama's graduated rates.
Property tax: Property taxes in Alabama are assessed and collected locally, so effective rates vary widely by county and municipality. Check your county assessor or the Alabama Department of Revenue for local rates.
Alabama vs. neighboring states
Compared with its neighbors — Florida, Georgia, Mississippi, Tennessee — Alabama's graduated rates up to 5% sit within the regional range. Effective rates depend heavily on income level, deductions, and local taxes. Note that Florida and Tennessee have no income tax at all, which can matter for people living or working near the border.
Alabama state tax FAQs
What is the Alabama state income tax rate for 2026?
Alabama uses graduated brackets ranging from 2% to 5%, with higher rates applying only to income above each threshold.
Does Alabama tax retirement income or Social Security?
Social Security benefits are exempt from Alabama income tax. For other retirement income, Alabama generally taxes 401(k), IRA, and pension distributions, though exclusions may apply. Verify with the Alabama Department of Revenue.
How are capital gains taxed in Alabama?
Alabama has no separate capital gains rate. Capital gains included in your federal AGI are taxed as ordinary income at Alabama's graduated rates.
Is there a local or city income tax in Alabama?
Some Alabama municipalities levy a local occupational tax on wages earned within the city.
Does Alabama have tax reciprocity with neighboring states?
Alabama has no income tax reciprocity agreements. If you work across state lines, you generally file a non-resident return where you work and claim a credit to avoid being taxed twice.
Sources & verification
Last verified June 12, 2026.