Alabama Income Tax Rates, Brackets, and Calculator for 2026
Alabama has three income tax brackets with income tax rates from 2% to 5% for 2026. Compare AL state tax at $75,000, $100,000, and other income levels. See how filing status changes the results and where Alabama ranks among states.
Alabama has three individual income tax brackets with rates of 2%, 4%, and 5% for 2026. Its progressive system applies each rate only to the portion of taxable income within that bracket. Married Filing Jointly taxpayers use wider brackets than Single, Married Filing Separately, and Head of Family taxpayers. The calculator and tables below compare Alabama taxes across income levels, filing statuses, and states, with examples that include Alabama's federal income tax deduction.
The Alabama Legislature establishes the income tax rules, while the Alabama Department of Revenue administers them and publishes the tax forms and instructions. The 2026 rates and brackets appear in Form 40-ES and remain unchanged from 2025. The standard deduction and personal exemption amounts we use in our calculations appear in the 2025 Form 40 instructions and remain unchanged under 2026 law. For calendar-year filers, federal Form 1040 series returns and Alabama Form 40 tax returns for income earned in 2026 are generally due April 15, 2027.
Alabama is currently the only state that allows an uncapped federal income tax deduction for individuals. A larger qualifying federal tax bill can produce a larger Alabama deduction, including at higher incomes. Our calculator includes this deduction, which can cause the effective Alabama tax rate to fall as income rises even though the tax owed increases. The step-by-step examples show how the deduction reduces Alabama taxable income before the state rates apply.
Tax Calculator
Alabama Income Tax Calculator for 2026
Enter annual household income and select a filing status to estimate Alabama income tax for 2026. Results open in our All 50 States income tax calculator with Alabama highlighted. The examples below show Alabama income tax for a Single filer earning $50,000 to $150,000 annually. Notice that Alabama's national rank improves as income rises, even though the tax owed increases. The effective rate rises slightly at $75,000, then declines as the growing federal income tax deduction offsets a larger share of income.
How Much Will You Pay in Alabama?
| Household Income | State Tax | Marginal Rate | Effective Rate | State Rank |
|---|---|---|---|---|
| $50,000 | $2,069 | 5% | 4.14% | 46 |
| $75,000 | $3,127 | 5% | 4.17% | 38 |
| $100,000 | $4,102 | 5% | 4.10% | 30 |
| $125,000 | $5,073 | 5% | 4.06% | 28 |
| $150,000 | $6,023 | 5% | 4.02% | 26 |
Alabama moves from the high income tax range nationally at $50,000 to the moderate range at $150,000, with rankings improving from 46th to 26th. That is the direct effect of the growing Federal Income Tax Deduction. At $100,000 of annual income, a Single filer pays an estimated $4,102 in Alabama state income tax for 2026. The statutory marginal tax rate is 5%, while the effective tax rate is 4.10%. The state's $2,500 standard deduction, $1,500 personal exemption, lower brackets, and uncapped federal income tax deduction keep the effective rate below the bracket rate.
The ranked estimates assume full-year Alabama residency, Single filing status, wages only, no dependents, and a taxpayer under age 65 who is not blind or claimed as another taxpayer's dependent. The estimates use Alabama's 2026 rates and brackets with retained 2025 deduction and exemption rules. No other deductions, income adjustments, or tax credits are included, and federal, payroll, and local taxes are excluded from the totals. The step-by-step examples further down the page explain how Alabama income tax is calculated for Single and Married Filing Jointly households.
Tax Rates
Alabama Income Tax Rates
Alabama's three individual income tax rates are 2%, 4%, and 5% for 2026. Single, Married Filing Separately, and Head of Family taxpayers use the same bracket thresholds. Married Filing Jointly thresholds are twice the Single amounts. Each rate applies only to the portion of taxable income within that bracket.
2026 Alabama Income Tax Brackets
| Bracket | Rate | Single | Married Filing Jointly | Married Filing Separately | Head of Family |
|---|---|---|---|---|---|
| 1 | 2% | $0 - $500 | $0 - $1,000 | $0 - $500 | $0 - $500 |
| 2 | 4% | $501 - $3,000 | $1,001 - $6,000 | $501 - $3,000 | $501 - $3,000 |
| 3 | 5% | $3,001+ | $6,001+ | $3,001+ | $3,001+ |
Alabama's income tax rates and bracket thresholds remain unchanged for 2026, continuing the schedule used since 1982. The top 5% rate applies to taxable income above $3,000 for Single, Married Filing Separately, and Head of Family taxpayers, or $6,000 for joint filers. Alabama does not adjust these thresholds annually for inflation. As wages rise with inflation, more taxable income can be subject to the top rate even when purchasing power has not increased.
Compare States
Compare Alabama to Other States
The next table compares Alabama with its four bordering states, plus Arkansas, Louisiana, and South Carolina, at $75,000 of annual income for a Single filer. States appear from lowest to highest state income tax, with the difference measured against Alabama. The marginal rate identifies the tax bracket reached, while the effective rate is state income tax divided by $75,000 of household income, expressed as a percentage. Notice how deductions and exemptions affect the gap between each state's marginal and effective rates.
Alabama vs Other States at $75,000 of Income (2026)
| State Name | State Tax | Difference | Marginal Rate | Effective Rate | State Rank |
|---|---|---|---|---|---|
| Florida | $0 | −$3,127 | 0% | 0.00% | 1 |
| Tennessee | $0 | −$3,127 | 0% | 0.00% | 1 |
| Louisiana | $1,864 | −$1,263 | 3% | 2.49% | 13 |
| Mississippi | $2,268 | −$859 | 4% | 3.02% | 17 |
| Arkansas | $2,287 | −$839 | 3.7% | 3.05% | 18 |
| South Carolina | $2,657 | −$469 | 5.21% | 3.54% | 29 |
| Georgia | $2,994 | −$133 | 4.99% | 3.99% | 36 |
| Alabama | $3,127 | $0 | 5% | 4.17% | 38 |
All seven comparison states have lower estimated state income tax than Alabama at this income level. Alabama's $3,127 tax is closest to Georgia's $2,994, a difference of about $133 despite nearly identical marginal rates. Alabama is about $859 higher than Mississippi and $1,263 higher than Louisiana. The difference between some states may narrow as income rises and Alabama's federal income tax deduction grows. Florida and Tennessee have no state income tax.
Examples
Alabama Income Tax Calculation Examples
The goal of these examples is to compare Single and Married Filing Jointly statuses at the same $75,000 annual income per person. The Single example uses $75,000 of household income, while the Married Filing Jointly example assumes each spouse earns $75,000, for a combined $150,000. The results match our 2026 income tax calculator using these income amounts and the corresponding filing status.
To simplify the calculations, both examples assume full-year Alabama residency, W-2 wages only, no dependents, and taxpayers under age 65 who are not blind or claimed as dependents. In the comparison table, we start by reducing Alabama household income by the state standard deduction and personal exemptions. We then calculate and subtract the federal income tax deduction to determine Alabama taxable income. Finally, we apply the state brackets to calculate Alabama state income tax. No other state deductions or tax credits are included.
2026 Alabama Filing Status Comparison
| Tax Metric | Single | Married Filing Jointly |
|---|---|---|
| Household Income | $75,000 | $150,000 |
| State Standard Deduction | $2,500 | $5,000 |
| Personal Exemptions | $1,500 | $3,000 |
| Federal Income Tax Deduction | $7,670 | $15,340 |
| Alabama Taxable Income | $63,330 | $126,660 |
| State Income Tax | $3,127 | $6,253 |
| Effective Tax Rate | 4.17% | 4.17% |
| Marginal Tax Rate | 5% | 5% |
Looking at the table above, we can see that both households reach Alabama's 5% bracket and have the same 4.17% effective tax rate. The joint state standard deduction, personal exemptions, and federal income tax deduction are twice the Single amounts in these examples. Alabama's joint bracket thresholds also double, so the couple's $6,253 tax equals the combined tax of two single filers who each owe $3,126.50. There is no marriage penalty or bonus in this comparison. Doubling the table's rounded Single tax produces a $1 difference. Next, we will review the step-by-step calculations for each filing status.
Step-by-Step Example 1: Single
For a single filer earning $75,000, we first calculate the federal income tax deduction. Subtracting that amount, the $2,500 Alabama standard deduction, and the $1,500 personal exemption leaves $63,330 of Alabama taxable income. That income fills the first two state brackets, with the remaining amount taxed at 5%.
- Federal taxable income: Subtract the 2026 federal standard deduction for Single filers. $75,000 − $16,100 = $58,900
- Federal income tax deduction: Apply the federal rates to the income within each bracket. $12,400 × 10% = $1,240 $38,000 × 12% = $4,560 $8,500 × 22% = $1,870 Then add the results. $1,240 + $4,560 + $1,870 = $7,670
- Alabama taxable income: Subtract the state standard deduction, personal exemption, and federal income tax deduction from household income. $75,000 − $2,500 − $1,500 − $7,670 = $63,330
- Tax through the first two Alabama brackets: Apply each state rate to the income within that bracket. $500 × 2% = $10.00 $2,500 × 4% = $100.00 Then add the results. $10.00 + $100.00 = $110.00
- Tax on the third Alabama bracket: Subtract $3,000 from $63,330, leaving $60,330 taxed at 5%. $60,330 × 0.05 = $3,016.50
- Estimated Alabama income tax: Add the tax from the lower brackets and the third bracket. $110.00 + $3,016.50 = $3,126.50
To calculate the Alabama effective tax rate, we divide $3,126.50 of state income tax by $75,000 of household income. The result is 4.17%, rounded. The estimated state income tax rounds to $3,127 in the comparison table.
The Alabama marginal tax rate is 5%, the rate applied to the next dollar of Alabama taxable income. However, Alabama's uncapped federal income tax deduction grows as federal income tax increases. As a result, additional wages in this example are effectively taxed at less than 4% by Alabama.
Step-by-Step Example 2: Married Filing Jointly
Now let's apply the calculation to a married couple filing jointly. Each spouse earns $75,000, for a combined household income of $150,000. Their $5,000 Alabama standard deduction, $3,000 personal exemptions, and $15,340 federal income tax deduction leave $126,660 of Alabama taxable income. The joint brackets are twice as wide, so the first $6,000 fills the lower brackets and the remainder is taxed at 5%.
- Federal taxable income: Subtract the 2026 federal standard deduction for Married Filing Jointly. $150,000 − $32,200 = $117,800
- Federal income tax deduction: Apply the federal joint rates to the income within each bracket. $24,800 × 10% = $2,480 $76,000 × 12% = $9,120 $17,000 × 22% = $3,740 Then add the results. $2,480 + $9,120 + $3,740 = $15,340
- Alabama taxable income: Subtract the state standard deduction, personal exemptions, and federal income tax deduction from household income. $150,000 − $5,000 − $3,000 − $15,340 = $126,660
- Tax through the first two Alabama brackets: Apply each joint state rate to the income within that bracket. $1,000 × 2% = $20.00 $5,000 × 4% = $200.00 Then add the results. $20.00 + $200.00 = $220.00
- Tax on the third Alabama bracket: Subtract $6,000 from $126,660, leaving $120,660 taxed at 5%. $120,660 × 0.05 = $6,033.00
- Estimated Alabama income tax: Add the tax from the lower brackets and the third bracket. $220.00 + $6,033.00 = $6,253.00
To calculate the Alabama effective tax rate, we divide $6,253 of state income tax by $150,000 of household income. The result is 4.17%, the same effective rate as the Single example. The calculated state income tax is $6,253, matching the comparison table.
The Alabama marginal tax rate is 5%, the same bracket rate as the Single example. Again, Alabama's uncapped federal income tax deduction grows as federal income tax increases. As a result, additional wages in this example are effectively taxed at less than 4% by Alabama.
Takeaway
Alabama Income Tax Takeaways
Effective rate is lower than the bracket rate
Our Single example at $75,000 produces an estimated $3,127 in Alabama income tax, while the Married Filing Jointly example at $150,000 produces $6,253. Both have a 4.17% effective rate, below the 5% bracket rate. The state standard deduction, personal exemptions, lower brackets, and federal income tax deduction reduce the share of household income paid in state tax.
The examples show no marriage penalty
The married couple's $6,253 tax equals the combined tax of two single filers who each owe $3,126.50. Joint bracket thresholds double, and the state deductions, personal exemptions, and federal income tax deduction also double in this comparison. The $1 difference results from doubling the table's rounded Single tax amount.
The effective rate falls as the federal deduction grows
For Single filers, Alabama's effective rate rises slightly from 4.14% at $50,000 to 4.17% at $75,000, then falls to 4.02% at $150,000. The growing federal income tax deduction offsets a larger share of income, even though the Alabama tax owed continues to increase. In both step-by-step examples, that deduction also means additional wages are effectively taxed at less than 4% by Alabama despite the 5% bracket rate.
Alabama's ranking improves as income rises
Alabama moves from 46th at $50,000 to 38th at $75,000 and 26th at $150,000 for Single filers among the 50 states and the District of Columbia, with 1 representing the lowest effective rate. This moves Alabama from the high income tax range nationally toward the middle as its federal deduction grows. At $75,000, however, Alabama has higher estimated income tax than all seven comparison states. Its $3,127 tax is about $133 more than Georgia's and $859 more than Mississippi's.
The federal deduction is uncapped but depends on credits
Alabama is currently the only state that allows an uncapped federal income tax deduction for individuals. A larger qualifying federal tax bill can produce a larger Alabama deduction, including at higher incomes. Federal credits, including the Earned Income Tax Credit and Child Tax Credit, can reduce the deduction available on the Alabama return to zero. A smaller deduction can increase Alabama tax, offsetting part of the federal credit's benefit. Our examples include the federal income tax deduction without federal credits.
FAQ
Frequently Asked Questions
What is the Alabama income tax rate for 2026?
Alabama has three individual income tax rates for 2026: 2%, 4%, and 5%. Each rate applies only to the portion of taxable income within its bracket. The bracket thresholds depend on whether the taxpayer files jointly or uses one of Alabama's other filing statuses.
How much is Alabama income tax on $75,000?
A Single filer earning $75,000 in wages owes an estimated $3,127 in Alabama income tax for 2026, an effective rate of 4.17%. The calculation includes a $2,500 state standard deduction, $1,500 personal exemption, and $7,670 federal income tax deduction. That leaves $63,330 of Alabama taxable income and produces $3,126.50 in state tax before rounding.
How much is Alabama income tax on $100,000?
A Single filer earning $100,000 in wages owes an estimated $4,102 in Alabama income tax for 2026, an effective rate of 4.10%. The calculation includes a $2,500 state standard deduction, $1,500 personal exemption, and $13,170 federal income tax deduction. That leaves $82,830 of Alabama taxable income and produces $4,101.50 in state tax before rounding.
What is the Alabama marginal tax rate?
The marginal tax rate is the rate applied to the next dollar of Alabama taxable income. Our Single example at $75,000 and Married Filing Jointly example at $150,000 both reach the 5% bracket. However, additional wages also increase the federal income tax deduction. As a result, additional wages in these examples are effectively taxed at less than 4% by Alabama.
What is the Alabama effective tax rate?
The effective tax rate is Alabama income tax divided by household income, expressed as a percentage. Our 2026 Single examples produce effective rates of 4.17% at $75,000, 4.10% at $100,000, and 4.02% at $150,000. The rate declines across these income levels because the growing federal income tax deduction offsets a larger share of income. The Alabama state income tax owed still increases.
Does Alabama have a marriage penalty?
No, not in our equal-income comparison. A married couple earning $75,000 each owes $6,253 in Alabama income tax, equal to the combined tax of two single filers who each owe $3,126.50. The joint bracket thresholds, state deductions, personal exemptions, and federal income tax deduction all double in these examples. Other income splits, deductions, and credits can change the result.
How much is the Alabama standard deduction for 2026?
Alabama's standard deduction decreases as Alabama adjusted gross income rises, within these filing-status ranges used for our 2026 estimates:
- Single: $2,500 to $3,000
- Married Filing Jointly: $5,000 to $8,500
- Married Filing Separately: $2,500 to $4,250
- Head of Family: $2,500 to $5,200
Lower-income taxpayers receive the larger deduction, while higher-income taxpayers receive the minimum for their filing status. Alabama does not adjust these amounts annually for inflation. They have remained unchanged since the 2022 increase.
Taxpayers may instead claim eligible itemized deductions on Alabama Schedule A. State rules differ from federal Schedule A, so the deductible amounts may differ. Married Filing Separately taxpayers must generally both use the standard deduction or both itemize unless they lived apart for the entire year.
How much is the Alabama personal exemption for 2026?
Alabama's personal exemption is $1,500 for Single and Married Filing Separately taxpayers and $3,000 for Married Filing Jointly and Head of Family taxpayers. The exemption reduces Alabama taxable income rather than directly reducing the calculated tax. Our 2026 estimates retain these amounts from the published 2025 rules. Alabama does not adjust these exemptions annually for inflation.
Does Alabama have a dependent exemption?
Yes. Alabama allows an exemption for each qualifying dependent, based on Alabama adjusted gross income:
- $50,000 or less: $1,000 per dependent
- $50,001 through $100,000: $500 per dependent
- Over $100,000: $300 per dependent
The exemption reduces taxable income before Alabama tax is calculated. Our examples assume no dependents and do not include this exemption.
Does Alabama tax overtime pay in 2026?
Yes. Regular wages earned during overtime hours remain taxable, but Alabama allows a deduction for qualifying overtime premium pay for 2026 through 2028. The deduction is limited to the lesser of the actual premium or $1,000 per taxpayer, whether the taxpayer claims the standard deduction or itemizes.
For time-and-a-half pay, only the additional half-rate qualifies, not all wages earned during overtime hours. Our calculator does not include this deduction.
Can you deduct federal income tax on an Alabama return?
Yes. Alabama residents may deduct qualifying federal income tax when calculating Alabama taxable income, with no dollar cap. The deduction is based on federal tax liability after applicable credits, not the amount withheld from wages. Federal credits can reduce the deduction to zero.
The deduction is available with either the Alabama standard deduction or eligible itemized deductions. Additional calculations may apply when federal and Alabama filing statuses differ. Our examples show how the deduction is calculated for Single and Married Filing Jointly taxpayers.
References:
- 2026 Form 40-ES Estimated Tax Instructions (PDF). Alabama Department of Revenue. Provides the 2026 tax rate schedules and estimated-tax worksheet, including the federal income tax deduction and personal and dependent exemptions. Refers taxpayers to the regular return instructions for exemption amounts. Retrieved October 20, 2026.
- 2025 Form 40 Booklet (PDF). Alabama Department of Revenue. Provides the published filing instructions for standard deductions, personal and dependent exemptions, and Alabama Schedule A. The federal income tax deduction worksheet on page 31 explains how applicable federal credits reduce the deduction. These prior-year instructions are supplemented by the 2026 legislation cited below. Retrieved October 20, 2026.
- Revenue Procedure 2025-32: 2026 Inflation Adjustments (PDF). Internal Revenue Service. Section 4 supplies the 2026 federal income tax brackets and standard deductions used to calculate the federal liability deducted in the Alabama examples. Retrieved October 20, 2026.
- Section 40-18-5, Individual Income Tax Rates and Rule 810-3-5-.01, Tax Rates for Individuals. Alabama Legislature and Alabama Administrative Code. Establish the 2%, 4%, and 5% rates and the wider bracket thresholds for Married Filing Jointly taxpayers. Retrieved October 20, 2026.
- 2026 House Bill 527, Enrolled (PDF) and Overtime Premium Deduction, Act 2026-604. Alabama Legislature and Department of Revenue. The law restates Section 40-18-15, retaining the standard deduction ranges and federal income tax deduction. The law and agency guidance explain the overtime premium deduction for 2026-2028, capped at $1,000 per taxpayer and available with either standard or itemized deductions. Retrieved October 20, 2026.
- 2026 House Bill 341, Enrolled (PDF). Alabama Legislature. Restates Section 40-18-19 with the continuing $1,500 and $3,000 personal exemptions and the dependent exemption amounts and income thresholds used in the FAQ. Retrieved October 20, 2026.
- Fiscal Note for House Bill 163, Act 2022-297. Alabama Legislative Services Agency, 2022. Documents the increases in standard deduction minimums and maximums and the expanded income thresholds for standard and dependent deductions. Supports the explanation that the current standard deduction amounts date to the 2022 increase. Retrieved October 20, 2026.
- Rule 810-3-15-.20, Federal Income Tax Deduction. Alabama Administrative Code, Alabama Legislative Services Agency. Explains the individual federal income tax deduction, credit adjustments, and allocation rules when federal and Alabama filing statuses differ. Read with the Form 40 worksheet for the applicable return-year calculation. Retrieved October 20, 2026.
- The Alabama Tax and Budget Handbook: Income Tax. Alabama Arise, 2026. Provides secondary context for Alabama's distinction as the only state allowing a full federal income tax deduction for individuals. The calculations on this page use the government sources listed above. Retrieved October 20, 2026.
- Due Dates. Alabama Department of Revenue. States that individual income tax returns are due on the same date as the corresponding federal return, supporting the general filing deadline stated in the introduction. Retrieved October 20, 2026.