Alabama Income Tax Rates & Brackets — 2026
Alabama has a graduated income tax with 3 brackets in 2026, running from 2% to 5%. A single filer on $100,000 owes about $4,760 — an effective rate of 4.76%.
The Alabama tax gauge at $100,000
Alabama
$100,000 · Single · TY2026Alabama tax brackets for 2026
Every filing status, as published by Alabama Department of Revenue. Rates apply to Alabama taxable income — that is income after the deductions and exemptions shown on each card.
Single
Standard deduction $3,000 · Personal exemption $1,500| Taxable income | Marginal rate |
|---|---|
| $0 – $499 | 2% |
| $500 – $2,999 | 4% |
| $3,000 and above | 5% |
Married filing jointly
Standard deduction $8,500 · Personal exemption $3,000| Taxable income | Marginal rate |
|---|---|
| $0 – $999 | 2% |
| $1,000 – $5,999 | 4% |
| $6,000 and above | 5% |
Married filing separately
Standard deduction $4,250 · Personal exemption $1,500| Taxable income | Marginal rate |
|---|---|
| $0 – $499 | 2% |
| $500 – $2,999 | 4% |
| $3,000 and above | 5% |
Head of household
Standard deduction $5,200 · Personal exemption $3,000| Taxable income | Marginal rate |
|---|---|
| $0 – $499 | 2% |
| $500 – $2,999 | 4% |
| $3,000 and above | 5% |
How the maths actually works
Rates are marginal: the 5% top rate applies only to the dollars above the top threshold, never to your whole income. A single filer on $100,000 in Alabama subtracts $4,000 of deductions and exemptions, then pays each bracket in turn on $96,000 of taxable income — $4,760 in all, or 4.76% of gross income. Marginal vs effective rate, explained.
What Alabama costs at different incomes
Single filer, standard deduction, no dependents. Rank is out of 50 jurisdictions, lowest tax first.
| Gross income | Taxable income | State tax | Effective rate | Per month | National rank | vs median state |
|---|---|---|---|---|---|---|
| $50,000 | $46,000 | $2,260 | 4.52% | $188 | 47th of 50 | +$815 |
| $75,000 | $71,000 | $3,510 | 4.68% | $293 | 44th of 50 | +$962 |
| $100,000 | $96,000 | $4,760 | 4.76% | $397 | 39th of 50 | +$1,033 |
| $150,000 | $146,000 | $7,260 | 4.84% | $605 | 36th of 50 | +$1,194 |
| $250,000 | $246,000 | $12,260 | 4.90% | $1,022 | 33rd of 50 | +$1,501 |
| $500,000 | $496,000 | $24,760 | 4.95% | $2,063 | 30th of 50 | +$2,630 |
| $1,000,000 | $996,000 | $49,760 | 4.98% | $4,147 | 30th of 50 | +$4,994 |
Alabama income tax calculator
Change the income, filing status and number of dependents to see the bracket-by-bracket breakdown.
- Income
- $100,000
- Standard deduction
- $2,500
- Exemptions
- $1,500
- Taxable income
- $96,000
Bracket by bracket
| Taxable income in bracket | Rate | Income taxed | Tax |
|---|---|---|---|
| $0 – $499 | 2% | $500 | $10.00 |
| $500 – $2,999 | 4% | $2,500 | $100.00 |
| $3,000 and above | 5% | $93,000 | $4,650.00 |
This estimates state income tax only, using the standard deduction and personal/dependent exemptions. It does not model itemised deductions, most credits, retirement-income exclusions, or local income taxes, and Alabama localities do levy their own income tax. Your actual bill will differ. See how we calculate this and Alabama's full brackets and sources.
Alabama versus its neighbours
State income tax owed by a single filer on $100,000 in 2026.
What changed since 2025
Alabama's rates, brackets and standard deduction are unchanged from 2025 to 2026.
| 2025 | 2026 | |
|---|---|---|
| Top marginal rate | 5% | 5% |
| Structure | graduated | graduated |
| Standard deduction (single) | $3,000 | $3,000 |
| Tax on $100,000 (single) | $4,760 | $4,760 |
Alabama’s brackets, standard deduction and exemptions are unchanged from 2025, so there is no separate 2025 page — these figures are the 2025 figures.
Recent legislated changes
- IncreaseEffective · Act 2023-421, as amended (sunset June 30, 2025)
Alabama's exemption of overtime pay from individual income tax expired on June 30, 2025, so overtime wages are fully taxable throughout 2026.
Retirement income
We do not publish Alabama's treatment of Social Security, pensions and retirement account withdrawals, because we could not establish it from a primary source. Rather than estimate it, we withhold it — see retirement taxes by state for the jurisdictions we can publish.
Capital gains
How Alabama taxes a capital gain in tax year 2025. This is verified separately from the rate schedule above and can be for a different tax year.
Alabama taxes a capital gain at the ordinary graduated rates, topping out at 5%. Gains are reported on Schedule D and no general exclusion or preferential rate is offered anywhere in the Form 40 booklet.
Taxed at the same rates as every other kind of income: the holding period changes nothing.
Alabama computes its own gross income under Section 40-18-14 rather than starting from a federal total, but the capital gain figure itself comes from federal Schedule D.
Exclusions that reach only certain assets
- Precious metal bullion — Beginning 1 January 2025, net capital gain on the exchange of precious metal bullion is not reported. The Sound Money Tax Neutrality Act (Act 2024-0447) amended Section 40-18-14 to exclude it. "Precious metal bullion" means coins, bars or rounds containing primarily refined gold, silver, platinum or palladium, marked and valued primarily by weight, purity and content.
These do not change the rates above, which are the rates on a gain that qualifies for no exclusion — a share of stock, for instance.
Not modelled: The ordinary treatment is established by the absence of any capital gains modification in the Department's own Form 40 booklet rather than by an affirmative statement that no preference exists.
Source: Alabama Department of Revenue — 2025 Alabama Form 40 Individual Income Tax Booklet — What's New for 2025 and Examples of Income You Do Not Report (retrieved 2026-09-19). Compare every state.
Local income taxes
Alabama has no state-administered local income tax, but a number of municipalities levy an occupational license tax on wages earned inside the city, withheld by the employer and separate from the state income tax. The City of Auburn's rate is 1% of gross wages. The City of Birmingham also administers an occupational tax through its Tax and License Division. Local tax is not included in any figure above.
| Locality | Rate |
|---|---|
| Auburn1% of gross wages paid for work in the City of Auburn, per the city's Employer's Quarterly Return of Occupation License Fee. | 1% |
What else to know about Alabama
- Alabama's brackets are not indexed for inflation and the thresholds are extremely low: the top 5% rate applies to all taxable income above $3,000 (single, married filing separately, head of family) or $6,000 (married filing jointly), so nearly every filer is at the top marginal rate.
- Alabama allows a deduction for federal income tax paid. This is unusual and materially reduces real Alabama liability, especially for higher earners; USTaxGauge does not model it, so our Alabama figures overstate tax for most filers.
- The Alabama standard deduction phases down with Alabama AGI. We store the maximum amount for each filing status; filers above roughly $26,000 of Alabama AGI (about $13,000 if married filing separately) receive less.
- The dependent exemption also phases down with Alabama AGI: $1,000 at $50,000 or less, $500 from $50,001 to $100,000, $300 above $100,000. The personal exemption ($1,500 or $3,000) does not phase out.
- Alabama's temporary exemption of overtime pay from state income tax, in effect from January 1, 2024, ended June 30, 2025; overtime paid after that date is fully taxable. Legislation to extend it did not pass.
- Several Alabama municipalities levy a separate occupational license tax on wages earned in the city (Auburn 1%, among others). It is not included in the state figure.
Capital gains
Alabama taxes capital gains as ordinary income at the same 2%/4%/5% rates; there is no preferential rate or exclusion.
What our figures leave out
Sources
- 1.Alabama Department of RevenueState revenue departmentWithholding Tax Tables and Instructions for Employers and Withholding Agents (Revised January 2026)Retrieved
- 2.Tax FoundationResearch organisation (cross-check)Alabama Tax Rates & RankingsRetrieved · Cross-check: "Alabama has a graduated state individual income tax, with rates ranging from 2.00 percent to 5.00 percent."
- 3.Alabama Department of RevenueState revenue departmentIndividual Income TaxRetrieved · Rate schedule: 2% first $500 ($1,000 MFJ), 4% next $2,500 ($5,000 MFJ), 5% over $3,000 ($6,000 MFJ).
- 4.City of Auburn, AlabamaGovernmentEmployer's Quarterly Return of Occupation License FeeRetrieved · Line 3: "Occupation license withheld during this quarter from wages paid to employees (1% of Line 2)".
- 5.City of Birmingham, AlabamaGovernmentTax and License DivisionRetrieved · Confirms the City of Birmingham administers an occupational tax; the division's page does not publish the rate.
Figures on this page were last checked against these sources on . Found something wrong? Report it.