Alabama State Income Tax Withholding
Last Updated: January 2026
Overview
Alabama uses a progressive income tax system with three tax brackets. The state allows employers to deduct federal income tax paid when calculating state taxable income, which is unique among states.
2026 Tax Rates
Single Filers
| Taxable Income | Tax Rate |
|---|---|
| $0 - $500 | 2% |
| $501 - $3,000 | 4% |
| $3,001 and over | 5% |
Married Filing Jointly
| Taxable Income | Tax Rate |
|---|---|
| $0 - $1,000 | 2% |
| $1,001 - $6,000 | 4% |
| $6,001 and over | 5% |
Deductions and Exemptions
| Filing Status | Standard Deduction |
|---|---|
| Single | $3,000 |
| Married Filing Jointly | $8,500 |
| Head of Household | $4,700 |
Federal Tax Deduction
Alabama is one of the few states that allows a deduction for federal income taxes paid. This deduction reduces the employee's Alabama taxable income.
Special Considerations
State W-4 Form
Alabama uses Form A-4 for state withholding allowances. Employees should complete this form in addition to the federal W-4.
Local Taxes
Some Alabama cities and counties impose occupational taxes. Check with local jurisdictions for additional withholding requirements.
Reciprocal Agreements
Alabama does not have reciprocal tax agreements with other states.