Alabama allows individual taxpayers to deduct either their itemized deductions or a Standard Deduction. If a married couple files separate returns, and one spouse itemizes deductions, both spouses must itemize. Part-year Alabama residents may deduct the full Standard Deduction.
Tax Years Beginning in 2006 or Earlier
For all tax years beginning before January 1, 2007, the Standard Deduction was computed as 20% of Alabama Adjusted Gross Income, but not to exceed (a)$4,000 for a married couple filing a joint return, or (b)$2,000 for all other taxpayers.
Tax Years Beginning in 2007 or Later
The 2006 Tax Reform Bill increased the Standard Deduction for lower income Alabama taxpayers, without reducing the Standard Deduction for other taxpayers. For the 2007 and later, the table below (reproduced from the 2007 Instructions) applies.
