E-file Alabama Taxes & Get Your Tax Refund Fast
Alabama requires people who have lived or worked in the state for a full year and earned incomes that are above the stipulated amounts for their filing statuses to file state income tax returns. People who are single and have earned over $4000 must file if they have lived in the state for a full year. Likewise, a person filing Married Filing Separately will be required to file Alabama taxes if he or she has lived there a full year and earned $5250 or more that year.
Alabama residents filing Head of Household must file if they earned an income of $7700 or more. People filing as Married Filing Jointly must have earned $10,500 that year and lived in Alabama for a full year. Non-residents must file Alabama taxes if their incomes fall at or above the allowable prorated personal exemption amount. Self-employed residents must file a state income tax return regardless of their filing status or income.
Alabama Tax Rates
The rate at which the state taxes a person's income can vary according to income and tax filing status. Single people and people filing as HOH, as well as married couples filing separately, will be taxed at a rate of 2% for the first $500 of taxable income and then 4% for the next $2500 and 5% for all taxable income over $3000. Couples filing jointly will be taxed at 2% for the first $1000 of taxable income, 4% for the next $5000 of taxable income, and 5% for all income over $6000.
Alabama Standard Deductions
Alabama offers standard deductions that vary by filing status and income level. Single filers can deduct up to $3,000. Married couples filing jointly can claim up to $8,500, while those filing separately can deduct up to $4,250. Head of family filers may claim up to $5,200. These deductions lower your taxable income before tax rates are applied.
Special Deductions and Exemptions
Alabama has several tax breaks that can lower your tax bill. This state allows taxpayers to deduct their entire federal income tax paid on their state return. Social Security benefits are also completely tax free, giving retirees valuable tax savings.
Military retirement pay and combat zone pay for active-duty military personnel are exempt from Alabama state income tax. These breaks create substantial savings for military personnel and veterans living in the state.
When to File Taxes
Taxpayers in the state can file their returns between January 1 and April 15, 2025, for the 2024 tax year. If people are unable to file on or before April 15, they will automatically be granted an extension until October 15. The state will not grant a tax extension longer than six months, however. People who do not file by October 15 of each year will be considered delinquent in filing their state income taxes. Alabama's delinquent or late-filing penalty is equal to 10% of the tax due or $50, whichever is greater. The $50 late-filing penalty applies even if there is no tax due for the tax period.
Remember that an extension gives you more time to file your return, but you still need to pay what you owe by the original due date. Pay your estimated taxes by April 15 to avoid extra charges.
Amended Tax Returns
People who must file an amended return are required to fill out and submit the state Form 40X. The 40X forms must be mailed to:
Alabama Department of Revenue
P. O. Box 327464
Montgomery, AL 36132-7464
How to Pay Alabama Taxes
Taxpayers can pay their balances owed to the state online through the Department of Revenue site at https://myalabamataxes.alabama.gov. They can also mail in payments, along with the required Form 40V, to the Department of Revenue.
For individuals and Corporations making more than a certain amount of money in any tax year, the state provides a tax coupon booklet for making estimated payments. Estimated taxes must be sent on the schedule instructed by Form 40ES (April 15, June 15, September 15, and January 15).
Checking Your Tax Refund
People who are owed refunds can check the status of their refunds online through the Alabama Department of Revenue's website. Refunds are processed
For faster processing, consider e-filing your return and choosing direct deposit for your refund. Direct deposit is the quickest way to receive your Alabama tax refund, typically within 2-3 weeks of filing, compared to 6+ weeks for paper returns.
Bordering States
Four states border Alabama. Tennessee is located to the north, Georgia to the east, Florida (no state income tax) is situated to the south and Mississippi to the west. Residents who work in one of these bordering states but reside in Alabama may be responsible to file a tax return with the state where they work.
Alabama's Tax Environment
Alabama's overall tax burden falls in the middle range compared to other states. The income tax structure is straightforward, and Alabama has one of the lowest property tax rates in the nation at approximately 0.36% of assessed value.
On the other hand, Alabama has one of the highest combined state and local sales tax rates in the country, averaging around 9.29%. This includes the state rate of 4.0% plus additional local taxes. Unlike many states, Alabama is one of the few that fully taxes groceries at the regular sales tax rate.
Understanding all aspects of Alabama's taxes helps when planning your finances or thinking about moving to the state.
Frequently Asked Questions
Does Alabama tax Social Security benefits?
No, the state fully exempts Social Security benefits from state income tax.
Is there a penalty for not filing a tax return if I'm required to?
Yes, Alabama imposes a late filing penalty of 10% of the tax due or $50, whichever is greater. This penalty applies even if you don't owe any tax.
How long does it take to receive an Alabama tax refund?
E-filed returns with direct deposit typically receive refunds within 2-3 weeks. Paper returns may take 6 weeks or longer.
Does this state offer any tax breaks for retirees?
Yes, Alabama exempts Social Security benefits and most retirement income from taxation, making it tax-friendly for retirees.
Note: States & U.S. territories may make changes to their tax laws with little notice. We do our best to keep this information up-to-date, but it is provided on an "AS IS" basis. For more see our terms.