Retirement taxes by state
How Alabama taxes retirement income in 2026
Alabama's income tax rates run from 2% to 5%. Here's how Alabama treats Social Security, retirement-account withdrawals, pensions and Roth conversions in 2026 — and what that means in dollars: a retired couple, both 67, with $98,000 of income pays about $1,300 in Alabama income tax.
Updated October 2026 · 2026 tax year
Alabama at a glance
- Income tax from 2% to 5%.
- Social Security isn't taxed.
- Pension income is fully exempt.
- 401(k)/403(b), IRA and Roth conversion income: up to $6,000 per person excluded from age 65.
- Federal income tax is deductible.
Alabama retirement tax questions
Does Alabama tax Social Security?
No. Social Security isn't taxed.
Does Alabama tax 401(k) and IRA withdrawals?
Partly. 401(k)/403(b), IRA and Roth conversion income: up to $6,000 per person excluded from age 65.
Does Alabama tax pensions?
No. Pension income is fully exempt.
Does Alabama tax Roth conversions?
Partly. 401(k)/403(b), IRA and Roth conversion income: up to $6,000 per person excluded from age 65. Anything above that is taxed like other income.
What is Alabama's income tax rate in 2026?
Alabama's income tax rates run from 2% to 5%.
What retirees actually pay in Alabama: three examples
Calculated with Retirology's tax engine under 2026 law, using each state's standard deduction, its retirement breaks and the 2026 federal rules for how much Social Security is taxable. For the retired couple, Alabama ranks 46th lowest of the 50 states and DC.
| Household | Total income | Alabama tax | Share |
|---|---|---|---|
| Retired couple, both 67 $48,000 of Social Security, $40,000 drawn from IRAs and 401(k)s, and $10,000 of qualified dividends | $98,000 | $1,300 | 1.3% |
| Single retiree, 70 $30,000 of Social Security, a $25,000 pension and $15,000 of IRA withdrawals | $70,000 | $17 | 0.0% |
| Early-retired couple, both 56, converting to Roth A $60,000 Roth conversion and $20,000 of long-term gains and qualified dividends, living on savings | $80,000 | $3,378 | 4.2% |
State income tax only — before local taxes, property tax relief and credits not listed above. Federal income tax is extra and the same in every state.
Alabama income tax brackets (2026)
Rates apply to Alabama taxable income, after the state's deductions and the retirement breaks above.
| Single | Rate | Married filing jointly | Rate |
|---|---|---|---|
| Up to $500 | 2% | Up to $1,000 | 2% |
| $500 – $3,000 | 4% | $1,000 – $6,000 | 4% |
| Over $3,000 | 5% | Over $6,000 | 5% |
Details and limits
Standard deduction and personal exemption combined (the deduction shrinks with AGI to its floor). Federal income tax is deductible. Defined-benefit pensions are exempt; the 65+ exclusion on 401(k)/IRA money is $6,000 (bills to double it did not pass).
Sources
Rates and rules for the 2026 tax year, from Retirology's state tax data (reviewed October 2026):
This page explains state tax rules in general terms. It isn't tax advice — check your state's official instructions or a tax professional for your situation.