How to apply for Alabama income tax: retirement income exclusion for age 65+ (and exempt Social Security and pensions)
Alabama Department of Revenue (ALDOR)
Who it's for
Alabama does not tax Social Security benefits, and it does not tax payments from many public pensions (such as the Alabama Teachers and Employees Retirement Systems and federal civil service retirement) or from defined benefit retirement plans. If you are 65 or older and have other taxable retirement income (such as IRA or 401(k) withdrawals), you can exclude up to $6,000 of it from Alabama income tax. A spouse who is 65 or older can exclude up to $6,000 too. Claim the exclusion on Schedule RS with your Alabama Form 40 or 40NR return.
Only helps if you owe Alabama income tax on retirement income that is not already exempt. The $6,000 exclusion is per taxpayer and cannot be more than the retirement income taxable to Alabama. Amounts are from the 2025 Schedule RS; confirm on the 2026 form when it is published.
People who qualify for one senior program often qualify for others. See everything you may qualify for — free, no SSN, about five minutes.
Find my benefitsWhat you'll need
- Alabama Form 40 or 40NR with Schedule RS
- Forms 1099-R for retirement income
Where to apply
Apply online: official application
Renewals
annual (claim on each year's return)
Not sure if you qualify? Run a free check first.
Find my benefitsNot legal or financial advice. The agency makes the final eligibility decision.