Alabama Income Tax Rates 2025
Alabama has a progressive income tax system with 3 brackets ranging from 2% to 5%. Alabama is notable for allowing a deduction for federal income taxes paid, which can significantly reduce state taxable income.
Tax Type
Progressive
Rate Range
2% – 5%
Brackets
3
2025 Tax Brackets — Single Filer
| Taxable Income | Rate |
|---|---|
| $0 – $500 | 2% |
| $501 – $3,000 | 4% |
| Over $3,000 | 5% |
2025 Tax Brackets — Married Filing Jointly
| Taxable Income | Rate |
|---|---|
| $0 – $1,000 | 2% |
| $1,001 – $6,000 | 4% |
| Over $6,000 | 5% |
How It Works
Alabama's income tax brackets are relatively low and narrow, meaning most taxpayers quickly reach the top 5% rate. However, Alabama is one of only three states that allow taxpayers to deduct their federal income taxes from their state taxable income, which can substantially lower the effective rate.
Alabama also has a state sales tax of 4% and local property taxes. Social Security benefits are not taxed at the state level.