Alabama has a top marginal income tax rate of 5% for 2026. See the full brackets, standard deduction, and how it stacks up against the national average.
Last updated: May 2026 · Data: state revenue departments, IRS, BLS
Alabama uses a graduated (progressive) income tax system administered by the Alabama Department of Revenue. The top marginal rate for 2026 is 5% on the highest bracket.
| Taxable Income | Tax Rate (2026) |
|---|---|
| $0 to $500 | 2% |
| $500 to $3,000 | 4% |
| Over $3,000 | 5% |
Alabama income tax starts from your taxable income after deductions. For 2026 (2025 tax year), the federal standard deduction is $15,000 for single filers and $30,000 for married filing jointly, which reduces the income subject to federal tax.
| Standard Deduction (2026) | Amount |
|---|---|
| Federal - Single | $15,000 |
| Federal - Married Filing Jointly | $30,000 |
| Federal - Head of Household | $22,500 |
State standard deductions, personal exemptions, and credits vary and may differ from the federal amounts above. Confirm Alabama figures with the Alabama Department of Revenue.
| Benchmark | Top Marginal Rate |
|---|---|
| Alabama (2026) | 5% |
| National average - all 50 states | 4.86% |
| National average - 41 states with an income tax | 5.93% |
| Highest in the U.S. (California) | 13.3% |
| Lowest among states that tax income | 2.5% |
| States with no income tax | 0% (9 states) |
At 5%, Alabama's top rate is above the national average of 4.86% (all 50 states).
Alabama is one of the few states that allows a deduction for federal income taxes paid on your state return, which effectively lowers the state tax burden.
| Alabama Tax Snapshot | 2026 |
|---|---|
| Top Income Tax Rate (2026) | 5% |
| Income Tax Structure | 3-bracket graduated |
| State Sales Tax | 4% |
| Minimum Wage | $7.25/hour |
| Median Household Income | $59,000 |
| Tax Agency | Alabama Department of Revenue |
Run the numbers for Alabama with our free calculators:
See how nearby states tax income in 2026:
Alabama has a top marginal state income tax rate of 5% for 2026, applied to the highest income bracket. Lower brackets are taxed at lower rates. It is administered by the Alabama Department of Revenue.
Alabama uses a graduated, progressive income tax system, so different portions of your income are taxed at different rates as shown in the bracket table above.
Alabama has 3 income tax brackets for 2026, ranging up to a top rate of 5%.
The 2026 federal standard deduction is $15,000 for single filers and $30,000 for married filing jointly. Alabama state deductions, exemptions, and credits can differ; verify current figures with the Alabama Department of Revenue.
At 5%, Alabama's top rate is above the national average of 4.86% (all 50 states). The national average top marginal rate is 4.86% across all 50 states and 5.93% among the 41 states that levy an income tax.
State income tax in Alabama is collected by the Alabama Department of Revenue. Federal income tax and FICA (Social Security and Medicare) are paid separately to the IRS.