Every Alabama income tax bracket for 2026, exactly as published — with the standard deduction, the exemption credit, and a tool that finds your bracket and shows the tax slice by slice.
| Rate | Taxable income over | Up to | Cumulative tax at top of band |
|---|---|---|---|
| 2% | $0 | $500 | $10 |
| 4% | $500 | $3,000 | $110 |
| 5% | $3,000 | and above | — |
Brackets apply to taxable income — gross income minus the standard deduction. Both tables are printed in full on this page; the tabs only choose which you look at first.
Enter your Alabama taxable income (after the standard deduction). Your bracket lights up in the table above, and your tax is broken into its slices.
Figure A The bracket staircase
The staircase: each step is one bracket. The tax climbs only inside the step you are standing on — moving into a higher bracket never taxes your earlier income at the higher rate.
| Taxable income (single) | Alabama tax | Effective rate | Top (marginal) rate |
|---|---|---|---|
| $50,000 | $2,460 | 4.9% | 5% |
| $75,000 | $3,710 | 4.9% | 5% |
| $100,000 | $4,960 | 5.0% | 5% |
| $150,000 | $7,460 | 5.0% | 5% |
Overtime pay is fully taxable for all of 2026: Alabama's overtime-pay exemption (Act 2023-421, as amended) expired on June 30, 2025, so no part of 2026 overtime qualifies, unlike the first half of 2025. Source: Alabama Department of Revenue notice, 'Overtime Exemption Ends June 30, 2025'. No change to the graduated rates (2% / 4% / 5%), the sliding standard deduction ($3,000 down to a $2,500 floor for single filers) or the federal income tax deduction for 2026. Source: Tax Foundation, State Individual Income Tax Rates and Brackets 2026.
The state-specific rules behind the numbers above — the things a generic calculator gets wrong about Alabama.
Alabama is one of only a handful of states that still let individual filers deduct the federal income tax they actually paid when figuring state taxable income. The deduction is claimed on Form 40 and it shrinks or grows with your federal bill: a bigger federal liability means a bigger Alabama deduction, and anything that cuts your federal tax — extra retirement contributions, for example — also cuts this state deduction. Because the top Alabama rate is 5%, every $1,000 of federal tax deducted saves about $50 of Alabama tax, which is why Alabama's effective rate lands noticeably below its headline 5% rate.
Source: Tax Foundation, State Individual Income Tax Rates and Brackets 2026; Alabama Department of Revenue, Form 40 instructions
Alabama's standard deduction is not a single flat number. For a single filer it starts at $3,000 and slides down by $25 for every $500 of Alabama adjusted gross income above $25,499, until it reaches a floor of $2,500. Higher earners therefore get the $2,500 minimum, while lower earners keep more of the deduction. The personal exemption is $1,500 for a single filer, and the graduated brackets are unusually compressed: 2% on the first $500 of taxable income, 4% from $500 to $3,000, and 5% on everything above $3,000 — so most filers pay the 5% top rate on nearly all of their taxable income.
Source: Tax Foundation, State Individual Income Tax Rates and Brackets 2026
Alabama does not tax Social Security benefits at all, even when part of them is taxable on your federal return. Separately, roughly two dozen Alabama cities levy an occupational tax on wages earned inside city limits — Birmingham charges 1% and Gadsden 2%, with most taxing cities at 1% — withheld by your employer on top of the state tax. Averaged across the whole state these local levies work out to only about 0.07% of AGI, but for a worker in a taxing city they are a real extra layer that a state-only estimate will miss.
Source: Tax Foundation, State Individual Income Tax Rates and Brackets 2026; Alabama League of Municipalities occupational tax survey
About two dozen Alabama cities levy occupational taxes on wages earned inside city limits, typically 1% (Birmingham, Auburn, Bessemer and others), with Gadsden at 2% and a few cities at 0.5%. They are withheld by employers and filed with the city, separate from Form 40. Statewide they average only about 0.07% of AGI because most cities levy none. Since 2020, state law bars municipalities from creating new occupational taxes.
Source: Tax Foundation — State Individual Income Tax Rates and Brackets, 2026
Yes. Alabama is one of the few states with a full federal income tax deduction for individuals. You deduct the federal income tax you paid during the year on Form 40, which lowers your Alabama taxable income dollar for dollar. At the 5% top rate, $8,000 of federal tax paid saves you about $400 of Alabama tax.
For single filers it slides with income: it starts at $3,000 and is reduced by $25 for every $500 of Alabama AGI over $25,499, down to a floor of $2,500. Most middle- and higher-income single filers end up with the $2,500 minimum. The single personal exemption is $1,500.
No. Social Security benefits are fully exempt from Alabama income tax, regardless of your other income, even if up to 85% of them are taxable federally.
On $75,000 of wages as a single filer, the estimate on this page puts your Alabama state tax at $3,127, federal income tax at $7,670 and FICA at $5,738, for total tax of $16,534 and take-home pay of $58,466. The Alabama figure already reflects the federal income tax deduction, which is why it is lower than a simple 5% calculation would suggest.
Birmingham levies a 1% occupational tax on wages earned working within city limits, withheld by your employer in addition to Alabama state tax. About two dozen Alabama cities have similar taxes, generally 0.5% to 2% — Gadsden is 2% — but most Alabama workers pay no city tax at all.
No. Alabama's temporary exemption for qualified overtime wages ran from January 1, 2024 to June 30, 2025 and then expired. Overtime paid from July 1, 2025 onward, including all of 2026, is fully taxable as ordinary wages on your Alabama return.
Alabama income tax brackets for 2026 in full: every rate and threshold for single and joint filers, the $3,000 standard deduction, worked examples and a find-your-bracket tool.
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Every Alabama income tax bracket for 2026, printed in full exactly as published: single and married-filing-jointly tables, the standard deduction, worked examples on taxable income, and a find-your-bracket tool that lights up your band and builds your tax slice by slice. Rates checked 31 October 2026; all figures are for the 2026 tax year.
On $100,000 of taxable income in Alabama (single filer, 2026), the slice-by-slice tax is $4,960.00 — the top slice is taxed at 5%, but the effective rate on the whole $100,000 is far lower because the early slices are taxed at the bottom rates. A $100,000 salary is not $100,000 of taxable income: the $3,000 standard deduction comes off first, which is what the companion income calculator works through.
Alabama taxes income in 3 bands from 2% to 5%. The standard deduction is $3,000.00 for a single filer. The tables are the state’s official 2026 schedules (sources printed on the page); cumulative tax at the top of each band is computed slice by slice from those rates. The federal comparison figures use IRS Rev. Proc. 2025-32.
Yes. Alabama is one of the few states with a full federal income tax deduction for individuals. You deduct the federal income tax you paid during the year on Form 40, which lowers your Alabama taxable income dollar for dollar. At the 5% top rate, $8,000 of federal tax paid saves you about $400 of Alabama tax.
For single filers it slides with income: it starts at $3,000 and is reduced by $25 for every $500 of Alabama AGI over $25,499, down to a floor of $2,500. Most middle- and higher-income single filers end up with the $2,500 minimum. The single personal exemption is $1,500.
No. Social Security benefits are fully exempt from Alabama income tax, regardless of your other income, even if up to 85% of them are taxable federally.
On $75,000 of wages as a single filer, the estimate on this page puts your Alabama state tax at $3,127, federal income tax at $7,670 and FICA at $5,738, for total tax of $16,534 and take-home pay of $58,466. The Alabama figure already reflects the federal income tax deduction, which is why it is lower than a simple 5% calculation would suggest.
Birmingham levies a 1% occupational tax on wages earned working within city limits, withheld by your employer in addition to Alabama state tax. About two dozen Alabama cities have similar taxes, generally 0.5% to 2% — Gadsden is 2% — but most Alabama workers pay no city tax at all.
No. Alabama's temporary exemption for qualified overtime wages ran from January 1, 2024 to June 30, 2025 and then expired. Overtime paid from July 1, 2025 onward, including all of 2026, is fully taxable as ordinary wages on your Alabama return.
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