Taxes in Tuscaloosa
Alabama's near-flat 5% income tax (softened by a real, uncommon federal-tax-deduction offset) applies to Tuscaloosa residents same as the rest of the state, layered with a city ad valorem millage rate (51.5 mills) that sits above the statewide average even as the countywide effective property tax rate stays genuinely low by national standards.
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Learn moreAlabama's graduated income tax -- restated as place-level context
Alabama applies a graduated state income tax: 2% on the first $500 (single) / $1,000 (MFJ) of taxable income, 4% on the next bracket up to $3,000 (single) / $6,000 (MFJ), and 5% above that -- effectively a near-flat 5% rate for most working filers. Alabama is also one of only three states letting taxpayers deduct federal income tax paid from Alabama taxable income, a real offset that pulled one 2026 estimate of the effective rate at $100,000 income down to roughly 4.08%. This applies identically to Tuscaloosa residents as to the rest of the state -- see alabama.js for the full mechanics.
Tuscaloosa's own ad valorem rate sits above the statewide average
The City of Tuscaloosa's own ad valorem millage rate is 51.5 mills, above the statewide average of 42 mills -- a real, disclosed fact worth knowing even though the countywide effective rate (0.45% median) still runs low by national standards thanks to Alabama's generally low home-value base.
Property tax varies meaningfully by zip code
Effective property tax rates ranged 0.47% (35405) to 1.03% (35401) across zip codes reviewed, with median tax bills from $703 to $2,065 -- driven mainly by differing school-district levies and local assessment districts. A 2024 referendum that would have raised the school-supporting rate by 11.5 mills (to 63 mills total) was rejected by voters, falling 705 votes short.
No state estate or inheritance tax
Alabama levies no state estate tax or inheritance tax. Confirm current guidance directly for any actual estate-planning decision, since sufficiently large estates may still owe the federal estate tax.
Key takeaways
- Alabama's graduated income tax runs near-flat 5% for most earners, meaningfully softened by the state's real federal-tax-deduction offset (one 2026 estimate: ~4.08% effective at $100K income).
- Tuscaloosa's own 51.5-mill city rate sits above the statewide 42-mill average, even as the countywide effective property tax rate (0.45% median) stays low by national standards.
- Property tax varies meaningfully by zip code (0.47%-1.03% effective) -- a 2024 school-funding referendum was rejected by voters.
- Alabama levies no state estate or inheritance tax, though the federal estate tax can still apply to sufficiently large estates.
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