Alabama State Tax Calculator 2026
Estimate your Alabama state income tax and take-home pay for tax year 2026.
Last updated: November 2025 · Source
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Alabama 2026 tax overview
3-bracket schedule unchanged since 1935; std deduction phases out at higher incomes.
Breakdown
Alabama income tax brackets, 2026
Rates apply to each slice of taxable income in turn, not to the whole amount. Reaching the 5% bracket does not mean paying 5% on everything. Figures are for single filers unless the state uses one schedule for all statuses.
| Taxable income | Rate | Tax on this bracket |
|---|---|---|
| $0 to $500 | 2% | $10 max |
| $500 to $3,000 | 4% | $100 max |
| Over $3,000 | 5% | 5% of everything above $3,000 |
Brackets apply to income after the Alabama standard deduction of $2,500 single and $7,500 married filing jointly, which is separate from the federal standard deduction.
What this calculator does not include
Several Alabama cities levy an occupational tax on wages earned in the city, typically 1% to 2%, including Birmingham (1%), Gadsden (2%) and Bessemer (1%). It is withheld by the employer and is not credited against state tax.
Frequently Asked Questions
What are the 2026 Alabama income tax rates?
Alabama uses a 3-bracket progressive schedule for 2026, running from 2% to 5%. The top rate starts at $3,000 of taxable income. 3-bracket schedule unchanged since 1935; std deduction phases out at higher incomes.
At what income does the top Alabama tax rate start?
The 5% top rate applies to taxable income above $3,000. Below that, 2 lower brackets apply in sequence, so your average rate is always lower than your top rate.
What is the 2026 Alabama standard deduction?
Alabama allows a state standard deduction of $2,500 for single filers and $7,500 for married filing jointly in 2026. This is separate from the federal standard deduction, which is $16,100 and $32,200 respectively.
Are there local income taxes in Alabama?
Yes. Several Alabama cities levy an occupational tax on wages earned in the city, typically 1% to 2%, including Birmingham (1%), Gadsden (2%) and Bessemer (1%). It is withheld by the employer and is not credited against state tax.
Does Alabama tax Social Security and retirement income?
Alabama does not tax Social Security, and defined-benefit pension income is exempt. Withdrawals from 401(k)s and IRAs are taxable, though filers 65 and over can exclude up to $6,000 of that income.
What surprises people most about Alabama income tax?
Federal income tax paid is deductible on the Alabama return, one of only a handful of states that still allow it. That materially lowers the effective state rate for higher earners.