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2026 rules · verified against Alabama's primary source
Alabama fully exempts military retirement pay from state income tax.
Military retirement pay is fully exempt from Alabama income tax (longstanding, since 1989).
Treatment
fully exempt
Top marginal rate
5.00%
Source: https://www.revenue.alabama.gov/individual-corporate/income-exempt-from-alabama-income-taxation/ · verified July 2026
Estimated Alabama state income tax on your military retirement, using the top marginal rate on the taxable portion (an upper bound; your effective rate is usually lower).
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