Alabama Income Tax

Alabama State Tax

Alabama Tax

Even though the federal tax rates are set, tax rates differ across the United States. For instance, the sales tax in Alabama is higher than in Connecticut, while some states do not have sales tax at all. However, both states have the same state tax rates for income taxes. Furthermore, state tax rates in the same state can differ from town to town. Among the types of taxes levied in the US are income tax, sales tax, property tax, and estate tax.

Knowing about the Alabama tax system is beneficial if you are living in, doing business with, or planning to move to Alabama. The following are basic information about the personal income tax structure in the State of Alabama.

Personal Income Tax Rates

The graduated personal income tax rates in Alabama depend on the amount of income filed by the taxpayer; greater income means greater income tax rates.  Income up to $500 is subject to 2% tax per dollar, while the income tax applied to taxable income ranging from $501-$3000 is 4%. For people earning over $3000, the income tax rates goes up to 5% on every dollar. For married people filing for joint income tax returns, the rates are 2% on the first $1000 taxable income, 4% for $1001-$6000 income, and 5% for incomes higher than $6000.

Filing For State Income Tax Return

Taxpayers are expected to file their income tax returns on or before the 15th of April each year; except when it falls on a holiday or weekend. To make things more convenient, the Alabama State Department of Revenue gives taxpayers the option to download tax return forms and to file their returns online.