Alabama Tax Calculators.
Tax year 2026 income tax rates, brackets, and sales tax for Alabama. Returns for tax year 2026 are generally filed in 2027; source links and last-verified dates are shown below.Tax year 2026 means income earned during calendar year 2026; those returns are generally filed in 2027. State and local sales tax rates can change during the year, so confirm current rules before filing or remitting tax.
Income Tax
Alabama uses a progressive income tax with 3 brackets ranging from 2% to 5%. The brackets are narrow, so most taxpayers reach the top rate quickly. Alabama also allows a deduction for federal income taxes paid.
| Taxable Income | Rate |
|---|---|
| $0 - $500 | 2.0% |
| $500 - $3,000 | 4.0% |
| Over $3,000 | 5.0% |
Sales Tax
Groceries are taxed at the full state rate. Prescription drugs are exempt.
Alabama's top rate of 5.0% is slightly above the national average of ~4.6%, but its deduction for federal taxes paid partially offsets this.
What is the income tax rate in Alabama?
Alabama has a progressive income tax with rates of 2%, 4%, and 5%. The top rate of 5% applies to income over $3,000 for single filers.
Does Alabama tax groceries?
Yes, Alabama taxes groceries at the full 4% state sales tax rate, though some cities add additional local taxes. This is one of the few states that fully taxes groceries.
Can I deduct federal taxes on my Alabama return?
Yes, Alabama is one of a few states that allows you to deduct your federal income tax liability from your state taxable income, which can significantly reduce your state tax bill.