The formulas
- Taxable income = income - standard deduction - personal exemptions (when applied), not below zero
- Standard deduction from the Alabama chart: falls in steps as Alabama AGI rises above $25,999 ($12,999 if married filing separately)
- Personal exemption: $1,500 single or separate, $3,000 joint or head of family
- Alabama income tax = tax from the rate schedule
How it works
Tax year: 2025. These are the latest full return figures Alabama has published.
Alabama taxes income at 2% to 5%. Enter income before state deductions and choose whether to apply the state standard deduction and personal exemptions, or enter taxable income and switch them off. The tool computes state income tax only; credits other than those named are not applied.
Alabama taxes the first $500 of taxable income at 2 percent, the next $2,500 at 4 percent and the rest at 5 percent ($1,000 and $5,000 bands on a joint return). The standard deduction follows the 2025 Form 40 chart: $8,500 joint, $5,200 head of family, $3,000 single and $4,250 married filing separately at the low end, falling in $500 steps of Alabama AGI ($250 steps when married filing separately) to $5,000, $2,500, $2,500 and $2,500.
Alabama also allows a deduction for federal income tax paid and a dependent exemption of $1,000, $500 or $300 per dependent depending on Alabama AGI. This tool does not apply either: subtract them from the income you enter.
Local taxes: Birmingham, Bessemer, Gadsden and several other Alabama cities levy an occupational license tax on wages earned in the city; it is not included.
Illustrative figures only. Check the result against your firm's methodology before relying on it.
Common questions
What is the Alabama income tax rate for 2025?
Alabama taxes income at 2% to 5% for 2025. Standard deduction from the Alabama chart: falls in steps as Alabama AGI rises above $25,999 ($12,999 if married filing separately).
What is the Alabama standard deduction?
Single: $3,000; Married filing jointly or surviving spouse: $8,500; Head of household: $5,200; Married filing separately: $4,250 (2025, at low income).
Are there local income taxes in Alabama?
Birmingham, Bessemer, Gadsden and several other Alabama cities levy an occupational license tax on wages earned in the city; it is not included.
Sources
- Alabama Department of Revenue, What is Alabama's individual income tax rate?
- Alabama 2025 Form 40 booklet (standard deduction chart, personal exemption)
- Alabama 2025 Form 40
Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.