Alabama Tax Brackets 2026
Alabama taxes income in graduated bands for 2026, with the top rate reaching 5%. Only the income inside each band is taxed at that band's rate, so the top rate applies to your highest dollars, not your whole income.
| Rate | Taxable income over | Up to | Tax at band ceiling |
|---|---|---|---|
| 2% | $0 | $500 | $10 |
| 4% | $500 | $3,000 | $110 |
| 5% | $3,000 | — | — |
| Rate | Taxable income over | Up to | Tax at band ceiling |
|---|---|---|---|
| 2% | $0 | $1,000 | $20 |
| 4% | $1,000 | $6,000 | $220 |
| 5% | $6,000 | — | — |
| Rate | Taxable income over | Up to | Tax at band ceiling |
|---|---|---|---|
| 2% | $0 | $500 | $10 |
| 4% | $500 | $3,000 | $110 |
| 5% | $3,000 | — | — |
| Rate | Taxable income over | Up to | Tax at band ceiling |
|---|---|---|---|
| 2% | $0 | $500 | $10 |
| 4% | $500 | $3,000 | $110 |
| 5% | $3,000 | — | — |
Alabama standard deduction (2026)
| Single | $3,000 |
| Married filing jointly | $8,500 |
| Married filing separately | $4,250 |
| Head of household | $5,200 |
Alabama also allows a personal exemption (deducted from income) of $1,500 for single filers.
Several Alabama municipalities levy an employee-paid occupational license tax on wages (e.g., Birmingham 1%, Bessemer 1%, Gadsden 2%, Auburn 1%). These are city-collected, not part of the state return, and apply only in those localities.
See what these rates leave of an actual salary: Alabama paycheck calculator.
Frequently asked questions
What is the top income tax rate in Alabama?
For 2026, the top income tax rate in Alabama is 5%. Graduated states apply that top rate only to income above the final threshold, not to your whole salary.
How do Alabama taxes compare with other states?
The clearest comparison is take-home pay on the same salary across states. Use the take-home pages to see how Alabama stacks up against a no-income-tax state and its neighbors.
Federal: IRS 2026 brackets (Rev. Proc. 2025-32) · FICA: IRS Topic 751 · Wage base: SSA · Alabama: Alabama Department of Revenue - Form 40 (rates, exemptions, federal tax deduction) and Standard Deduction Chart. Rates current as of July 16, 2026. Annual-liability estimates, not payroll withholding — see methodology.