To indicate that your AL pension is exempt from AL taxes, please follow these steps:
- As you go through the AL return, you will see a screen, About Your Retirement Distributions.
- Click Edit next to your retirement distribution.
- On the screen, Alabama Special Handling of This Distribution, if your retirement is included in the list, click the Yes box to indicate that the distribution is not taxed by AL.
- You will be brought back to the screen, About Your Retirement Distributions. You will see that there is a zero (0) entry in the AL Taxable Pensions/IRAs column.
- If you need to select another plan, click Edit next to that plan and perform the same steps. If not, click Done.
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