How much is Alabama income tax?
Alabama income tax at 3 levels of Alabama taxable income — what is left after Alabama's own deductions and exemptions. Local income taxes are not included.
| Taxable income | Single | Married filing jointly |
|---|---|---|
| $50,000 | $2,4604.9% effective · 5% marginal | $2,4204.8% effective · 5% marginal |
| $100,000 | $4,9605.0% effective · 5% marginal | $4,9204.9% effective · 5% marginal |
| $250,000 | $12,4605.0% effective · 5% marginal | $12,4205.0% effective · 5% marginal |
What are Alabama's income tax brackets for 2026?
| Taxable income | Rate |
|---|---|
| Up to $500 | 2% |
| Over $500 up to $3,000 | 4% |
| Over $3,000 | 5% |
| Taxable income | Rate |
|---|---|
| Up to $1,000 | 2% |
| Over $1,000 up to $6,000 | 4% |
| Over $6,000 | 5% |
Source: Ala. Code §40-18-5, checked September 10, 2026.
Can you deduct Alabama income tax on your federal return?
The federal deduction for state and local taxes (SALT) is capped at $40,400 for 2026 — $20,200 if married filing separately — and the cap shrinks toward $10,000 once modified AGI passes $505,000. A single filer with $250,000 of Alabama taxable income owes about $12,460 in Alabama income tax — 31% of that cap before any property tax.
SALT cap workaroundsDoes Alabama have a pass-through entity tax (PTET)?
Yes. A partnership or S corporation can elect to pay Alabama income tax at the entity level. The business deducts it federally, so that state tax is not limited by the SALT cap, and the owners claim an Alabama credit or exclusion for it. Deductsy's plan treats March 15 as the Alabama election or first-payment deadline; it is approximate, so confirm it with Alabama before relying on it.
PTET savings calculatorWhen are Alabama estimated tax payments due?
Alabama estimated tax is due April 15, June 15, September 15 and January 15 of the following year, in 4 equal instalments. Those are the same dates as the federal schedule. Source: Form 40ES Instructions, Declaration of Estimated Tax, tax year 2026 (Alabama DOR).
Safe-harbor calculatorWhat is the penalty for underpaying Alabama estimated tax?
Alabama charges interest on an underpaid instalment at the rate it publishes each year: 7% for 2025. Paying at least 90% of this year's tax or 100% of last year's (110% if Alabama AGI was over $150,000) on time avoids it. No estimated payments are required if you expect to owe less than $500. Source: Form 2210AL, Underpayment of Estimated Tax by Individuals (2025).
Are HSA contributions deductible in Alabama?
Yes. Alabama follows the federal treatment, so an HSA contribution — up to $4,400 with self-only coverage or $8,750 with family coverage for 2026 — lowers Alabama taxable income as well as federal.
Can you deduct federal income tax on your Alabama return?
Yes. Alabama lets you subtract the federal income tax you actually paid, with no dollar cap, less refundable credits such as the earned income credit.
Does Alabama give a tax break for 529 plan contributions?
Yes. Alabama lets you deduct up to $5,000 a year of contributions to Alabama's own 529 plan ($10,000 on a joint return). Income limits, per-beneficiary caps and carryforwards differ by state, so check the plan's rules.
529 plan tax savings calculatorWhat is the property tax rate in Alabama?
Alabama's average effective property tax rate is 0.38% — the 50th highest of 51 jurisdictions and 42% of the national average of 0.9%. That is about $380 a year for every $100,000 of home value; the rate varies widely by county and school district.
Itemize or take the standard deduction?How much does an LLC cost to keep in Alabama each year?
Deductsy's table has no annual report fee or minimum franchise tax for an Alabama LLC. Fees change, so confirm with Alabama's business filing office.
Alabama S-corp tax calculatorHow do Alabama taxes compare with neighboring states?
| State | Top income tax rate | Income tax on $100,000 (single) | Property tax (avg) |
|---|---|---|---|
| Alabama | 5% | $4,960 | 0.38% |
| Florida | None | $0 | 0.76% |
| Georgia | 4.99% | $4,990 | 0.77% |
| Mississippi | 4% | $3,600 | 0.72% |
| Tennessee | None | $0 | 0.5% |
On $100,000 of taxable income a single filer's Alabama income tax is $4,960 — more than in 3 of 4 neighboring states. The lowest is Florida at $0; the highest is Georgia at $4,990. Alabama's average property tax rate is higher than in none of the 4.
Income tax is each state's own tax on the same state taxable income; local income taxes are not included.
Tax moves that matter most for Alabama
If you own an S corporation, partnership or multi-member LLC, Alabama's PTET election moves the Alabama income tax on that profit to the business, where it is deductible federally and outside the SALT cap.
An S-corp election can cut self-employment tax once profit is large enough to pay yourself a reasonable salary and still cover payroll and filing costs. The Alabama calculator adds Alabama's own entity fees and taxes to that breakeven.
With 1099 income, a Solo 401(k) can take up to $72,000 a year (2026) — usually more than a SEP-IRA at the same income. Contributions lower both federal and Alabama income tax.
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