Guide to filing Alabama state taxes

This article was fact-checked by our editors and Jennifer Samuel, senior product specialist for Credit Karma. It has been updated for the 2019 tax year.

Rockets and revolutionaries have earned Alabama a special place in U.S. history.

The Cotton State — which is home to the U.S. Space & Rocket Center, the late civil rights leader Martin Luther King Jr.’s church and the Rosa Parks Museum — tries to go easy on filers. If you pay Alabama state taxes, you have just three state income tax rates and tax brackets to consider.

And you don’t have to worry that the top rate will rise, thanks to a restriction by the state Constitution that aimed to stabilize the tax environment. But if you choose not to itemize deductions on your state return, it’ll take some math, a chart and a bit of patience to figure your Alabama standard deduction.

Learn more about the state’s individual income tax and its relatively simple process for filing your Alabama state tax returns.

• What are some basics of Alabama state taxes?
• What are some Alabama deductions and credits to know?
• How can I file an Alabama state tax return?
• What if I owe and can’t pay?
• How can I track an Alabama tax refund?

What are some basics of Alabama state taxes?

Taxing body

Alabama has several taxes, including sales tax, use tax and county-level property taxes. The state also has an individual income tax, which is collected by the Alabama Department of Revenue, or ADOR.

If you have tax-related questions, call 1-334-242-1170 or submit a help request online. The ADOR also offers online FAQs about filing and paying income tax, ordering forms, checking on your refund and related topics. And it has nine regional Taxpayer Service Centers that offer assistance Monday through Friday from 8 a.m. to 5 p.m. Central time.

Filing and payment deadline

For 2019 state taxes, the state has extended the filing and payment deadline. Alabama residents now have until July 15, 2020 to file their state returns and pay any state tax they owe for the year. As with the federal deadline extension, Alabama won’t charge interest on unpaid balances between April 15 and July 15, 2020.

While this year is a bit different, generally the income tax filing deadline in Alabama is the same as the federal tax return due date — April 15. If the federal deadline falls on a holiday or weekend, the IRS will extend it to the next business day.

If you can’t file your Alabama state tax on time, you get an automatic six-month extension to complete your return. But if you owe tax, you must pay it on or before the original due date. The extension doesn’t extend your time to pay your taxes, and you could face penalties and interest if you don’t pay your tax on time.

Filing statuses

Alabama’s filing statuses for individual tax returns are …

• Single
• Married filing a joint return
• Married filing a separate return
• Head of family

Common-law couples can file as married filing a joint return.

Alabama income tax rates

You won’t have to worry about rising income tax rates in Alabama. The top rate can’t go above 5% because of the limit imposed by the state Constitution. The rates are 2%, 4% and 5%, and your marginal tax rate will depend on your income and filing status.

What are some Alabama deductions and credits to know?

You can choose to itemize your deductions or take a standard deduction on your Alabama state tax return, whichever helps reduce your tax burden.

Alabama standard deduction

Like the federal standard deduction, your filing status plays a role in determining your Alabama standard deduction. But the state also takes your Alabama adjusted gross income into account.

Personal exemptions and deductions

Alabama’s personal exemption is $1,500 if your filing status is single or married filing separately, or $3,000 if your status is married filing jointly or head of family with a qualifying person. If you’re a dependent or student, you can still claim your own personal exemption, even if you’re claimed as a dependent on someone else’s tax returns.

The state offers several tax deductions. Here are a few that are available for 2019.

• Federal income tax deduction — The federal government generally allows taxpayers who itemize to deduct up to $10,000 in state and local taxes paid each year. Alabama flips that scenario and allows state residents to deduct their federal income tax for the year less any federal tax credits the filers claimed. And you don’t have to itemize your Alabama deductions in order to claim this one.
• Medical and dental expenses — If you itemize deductions on your Alabama return, you may be able to deduct qualified medical and dental expenses that exceed 4% of your Alabama AGI.
• FICA taxes — Alabama allows you to take an itemized deduction of the federal Social Security and Medicare taxes your employer withheld from your income.
• Real estate taxes — If you paid property tax on any noncommercial property you owned in any state, you can take an itemized deduction for that amount. This doesn’t include any real estate taxes paid as part of your mortgage payments.
• Contributions to a College Counts Alabama 529 savings plan — You may be able to deduct contributions of up to $5,000 a year (or $10,000 for married filing jointly) to a College Counts Alabama 529 savings plan for qualified higher education expenses. Contributions to the Prepaid Affordable College Tuition Program also qualify.
• Contributions to a Catastrophe Savings Account — If you deposit money in a savings account labeled as a Catastrophe Savings Account, you may be able take a deduction for your deposits, up to certain limits per year. You can use the account to pay for repair costs or other losses if your home is damaged by a catastrophic storm or flood and your costs or losses aren’t covered by your homeowner’s insurance.

How can I file an Alabama state tax return?

To file your Alabama state tax return electronically, you can use the state’s free tax-filing system at My Alabama Taxes, or MAT. You can pay any tax due by using your checking account (for free) or by credit card (but there’s a fee). You can also use a paid tax professional or one of the online tax preparation and filing service approved by ADOR. Some providers may charge fees, so review terms, conditions and costs before choosing an e-file provider.

To file by mail, send your relevant tax forms to the Alabama Department of Revenue at one of these addresses, depending on which form you file and whether you include a tax payment.

• Form 40 without payment: P.O. Box 154, Montgomery, AL 36135-0001
• Form 40 with payment: P.O. Box 2401, Montgomery, AL 36140-0001
• Form 40A without payment: P.O. Box 327465, Montgomery, AL 36132-7465
• Form 40A with payment: P.O. Box 327477, Montgomery, AL 36132-7477
• Form 40NR without payment: P.O. Box 154, Montgomery, AL 36135-0001
• Form 40NR with payment: P.O. Box 2401, Montgomery, AL 36140-0001

If you’re owed a refund, the ADOR will start releasing refunds on March 1, 2020. If you e-file, you can expect your refund in about eight to 10 weeks after receiving your filing acknowledgment from the ADOR. Refunds for paper filers take eight to 12 weeks to process, and refunds for first-time filers can take up to 12 weeks to process.

If that sounds like a long time, there’s a way to speed up your refund. Download the IDEMIA eID app from the App Store or Google Play, and then take a selfie and a photo of your driver’s license for authentication by the Alabama Law Enforcement Agency to verify your identity. Then go to My Alabama Taxes to register your IDEMIA eID for faster processing.

What if I owe and can’t pay?

Alabama doesn’t offer an installment payment plan to people who can’t afford to pay their income taxes. But the state has an Office of Taxpayer Advocacy to help you resolve tax disputes if they linger after you’ve used appeals and methods of review. You can reach the office by calling 1-334-242-1055 or by mail at P.O. Box 327005, Montgomery, AL 36132-7005.

How can I track an Alabama tax refund?

To track your refund status, call the state’s refund hotline at 1-855-894-7391 or check online by going to the My Alabama Taxes portal and clicking on the “Where’s My Refund” link. You’ll need to provide your Social Security number (or the first one listed on a joint return), the tax year in question and your expected refund amount.

Bottom line

Filing a state tax return in Alabama is a mixed bag of simple and complex. Just three tax rates and brackets make it easier to understand which applies to your tax situation. But you’ll have to do some calculating to determine your standard deduction.

If you have questions, you can visit one of the Taxpayer Service Centers, submit a question online or call the ADOR for help. And remember to pay your tax on time since there are penalties if you’re late and there’s no way to set up a payment plan with the Department of Revenue.

Jennifer Samuel, senior tax product specialist for Credit Karma, has more than a decade of experience in the tax preparation industry, including work as a tax analyst and tax preparation professional. She holds a bachelor’s degree in accounting from Saint Leo University. You can find her on LinkedIn.