Results are estimates for educational purposes only. Based on 2026 IRS federal brackets and Alabama state tax rates. Always consult a qualified tax professional.
Alabama income tax overview
Alabama has a progressive income tax with a top rate of 5%, but its standard deduction is very low at just $2,500 for single filers — meaning more income is subject to state tax than in most other states. Alabama is unique in that it allows a deduction for federal income taxes paid, which reduces state taxable income for most workers. This federal deduction partially offsets the low standard deduction. Alabama also has a local income tax in several cities and counties — Birmingham levies 1%, and Jefferson County adds another 1% occupational tax, creating a combined local burden of 2% for residents of that area on top of state taxes.
2026 Alabama income tax rates
Tax rate
Income range (single filer)
2%
$0 – $500
4%
$501 – $3,000
5%
Over $3,000
Worked example: $75,000 salary in Alabama
A $75,000 salary in Alabama results in approximately $3,200 in state income tax (effective ~4.3% after federal deduction), plus $12,580 federal tax, $4,650 Social Security, and $1,088 Medicare. Annual take-home is approximately $53,482, or $2,057 bi-weekly.
Key facts: 5% top rate · Allows federal tax deduction · Very low $2,500 standard deduction · Some local taxes
Frequently asked questions — Alabama income tax
Yes — Alabama is one of very few states that allows you to deduct the federal income taxes you paid from your Alabama taxable income. This significantly reduces your effective Alabama tax rate, especially for higher earners who pay more federal tax.
Yes, several Alabama municipalities levy occupational taxes: Birmingham (1%), Jefferson County (1%), Auburn (1%), Gadsden (2%), and a few others. These are on top of the state 5% rate and apply where you work, not just where you live.
No. Alabama does not tax Social Security benefits.
Alabama's standard deduction is only $2,500 for single filers — one of the lowest in the country. However, the federal tax deduction partially compensates for this.
Alabama exempts Social Security, most pension income from state, federal, and military retirement systems from state income tax. Private sector 401k and IRA distributions are taxable, however.
Compare Alabama to other states
Use our US income tax calculator to compare your take-home pay across all 50 states. You may be surprised how much location affects your net income.