Alabama Tax Overview
Alabama has a relatively low top income tax rate of 5% but is one of the few states that allows a deduction for federal income taxes paid. The state also has one of the lowest property tax rates in the nation, making it attractive for homeowners.
Alabama Tax Quick Facts (2026)
| Income Tax | progressive (top rate: 5.0%) |
| Sales Tax (State) | 4.00% |
| Property Tax (Avg Effective) | 0.39% |
| Median Household Income | $56,950 |
| Capital | Montgomery |
| Population | 5.1 million |
Alabama Income Tax Brackets (2026)
| Income Range | Tax Rate |
|---|---|
| $0 — $500 | 2.00% |
| $500 — $3,000 | 4.00% |
| $3,000+ | 5.00% |
Frequently Asked Questions About Alabama Taxes
Does Alabama have a state income tax?+
Yes, Alabama has a progressive income tax system with a top marginal rate of 5.0%.
What is the property tax rate in Alabama?+
The average effective property tax rate in Alabama is approximately 0.39% of assessed home value. On a $300,000 home, that is about $1,170 per year.
What is the sales tax rate in Alabama?+
The state sales tax rate in Alabama is 4.00%. Local jurisdictions may add additional sales tax.
What is the median household income in Alabama?+
The median household income in Alabama is approximately $56,950 per year.
How does Alabama's tax burden compare to other states?+
Alabama's total tax burden depends on income tax, property tax, and sales tax combined. Use the calculator above to compare your specific situation.
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James Whitfield, CPA, MST
James Whitfield is a Certified Public Accountant with a Master of Science in Taxation. He specializes in US federal and state tax calculations and ensures all tax-related tools meet current IRS guidelines. Last updated: April 2026. Uses 2026 tax year data from state revenue departments and IRS publications.