Alabama taxes income at 2%, 4% and 5%, and the 5% rate starts after just $3,000 of taxable income. So most of your income is taxed at 5%: a single filer on $60,000 owes $2,760, or 4.6%.
The calculator applies Alabama's rules for a single filer. It subtracts a standard deduction that shrinks as income rises, plus the $1,500 personal exemption. Alabama also lets you deduct your federal income tax. The calculator leaves that out, so its result is too high by about 5% of your federal tax.
Three rates, and the top one starts at $3,000
Single filers, heads of family and married people filing separately all use the same bands:
- 2% on the first $500 of taxable income
- 4% on the next $2,500
- 5% on everything above $3,000
Joint returns get bands exactly twice as wide. That's 2% on the first $1,000, 4% on the next $5,000 and 5% above $6,000. Taxable income is what's left after deductions and exemptions:
The standard deduction shrinks as you earn more
For a single filer, the standard deduction is $3,000 while adjusted gross income (AGI) is under $25,500. It then falls by $25 for every $500 above that line. At $35,500 it reaches its floor of $2,500. The other filing statuses follow the same pattern with their own amounts:
| Filing status | Full deduction | Cut | Floor |
|---|---|---|---|
| Single | $3,000 (AGI under $25,500) | $25 per $500 | $2,500 |
| Married filing jointly | $8,500 (AGI under $25,500) | $175 per $500 | $5,000 |
| Head of family | $5,200 (AGI under $25,500) | $135 per $500 | $2,500 |
| Married filing separately | $4,250 (AGI under $12,750) | $88 per $250 | $2,500 |
The shrinking deduction hides a small bump. Between $25,500 and $35,500, each extra $500 of income also costs $25 of deduction. You pay 5% on $525, or $26.25, so your real marginal rate there is about 5.25%.
The calculator's marginal-rate line still shows 5%. It also rounds any part of a $500 step up to a full step. That can add $1.25 of tax in that range.
What single filers pay, from $20,000 to $200,000
Here's the calculator's result at six incomes:
| Income | Alabama tax | Effective rate |
|---|---|---|
| $20,000 | $735 | 3.7% |
| $30,000 | $1,246 | 4.2% |
| $40,000 | $1,760 | 4.4% |
| $60,000 | $2,760 | 4.6% |
| $100,000 | $4,760 | 4.8% |
| $200,000 | $9,760 | 4.9% |
Once the deduction bottoms out at $35,500, the result is simply 5% of income minus $240. That's $200 saved by the $4,000 of deduction and exemption, plus $40 from the lower first bands. The effective rate creeps toward 5% but never reaches it.
The federal tax deduction the calculator skips
Alabama lets you deduct the federal income tax paid or accrued within the tax year. The Form 40 instructions include a worksheet that works out the amount from your federal return. At the 5% rate, every $1,000 of federal tax you deduct saves $50.
Here's the 2025 federal income tax for a single filer, from our tax bracket calculator:
| Income | Federal income tax, 2025 | Federal effective rate |
|---|---|---|
| $30,000 | $1,472 | 4.9% |
| $60,000 | $5,072 | 8.5% |
| $100,000 | $13,449 | 13.4% |
| $200,000 | $37,067 | 18.5% |
At $60,000, 5% of $5,072 is about $254. That cuts the Alabama bill from $2,760 to about $2,506. At $100,000, the saving grows to about $672. To apply it yourself, subtract 5% of your federal tax from the calculator's result.
Income Alabama doesn't tax
Leave these out of the income you enter. The Department of Revenue lists them as exempt:
- Federal Social Security benefits
- Benefits from Alabama's Teachers' and Employees' Retirement Systems, and other defined benefit pensions
- Military retirement pay
- Unemployment compensation
If you're 65 or older, the first $6,000 of other taxable retirement income is exempt too. That rule applies from 2023.
Filing jointly, as head of family, or with dependents
A shortcut for couples
Above $71,000 of joint AGI, every joint figure is exactly double the single one. That covers the bands, the $5,000 deduction floor and the $3,000 exemption. So enter half your AGI and double the result. A couple on $120,000 enters $60,000 and owes 2 × $2,760 = $5,520.
Head of family
Heads of family use the single bands but get a $3,000 exemption. Above $35,500, their deduction matches the single $2,500. So subtract $75, which is 5% of the extra $1,500, from the calculator's result.
Dependents
Each dependent adds $1,000 of exemption when AGI is $50,000 or less, $500 up to $100,000 and $300 above that. At 5%, that takes $50, $25 or $15 off the tax per dependent.
The return is due with your federal one, April 15 for most people, with an automatic extension to October 15. For take-home pay after federal tax and Social Security, try the salary calculator or the FICA calculator.
Sources
- Alabama Department of Revenue, Individual Income Tax: General Information for Individuals
- Alabama Department of Revenue, Form 40 Booklet: Forms and Instructions (tax year 2025)
- Alabama Department of Revenue, Income Exempt from Alabama Income Taxation
- Code of Alabama §40-18-15, Deductions for individuals (2025 code)
- Code of Alabama §40-18-19, Exemptions (2025 code)