Alabama state tax FICA deduction for part year resident, with excess SS tax withheld

[tgfirst]

I moved to AL in Aug 2025, from out-of-state  (AL residency started Aug 2025)

During 7 months with out-of-state residency, I paid $6,000 in Social Security tax (with out-of-state employer #1 W-2)

During 5 months as an AL resident, I paid $10,000 total  Social Security tax to two employers (total of employer #2 and #3 W-2’s from AL)

So I paid a total of $16,000 SS taxes, or $5082 excess (SS limit is 10918) that is claimed as federal tax withheld at the federal level.

The AL instructions state that "the excess amount claimed as Federal Income Tax Withheld on your Federal return cannot be claimed as an itemized deduction on your Alabama return".   This kinda suggests that the excess needs to be subtracted from the $10K AL SS tax deduction?   Is that the way it reads?   Or does it read as simply another added deduction not allowed to be taken?

Does that mean the full $10K SS tax is deductible (not reduced by excess), and the excess $5082 is simply not an additional deduction I am allowed to take?

Or should the $5082 excess be apportioned between the states, by ratioed amounts of SS tax paid in each state, and reducing the $10K SS tax paid by an apportioned amount of the excess?

Or does the full $5082 excess needs to be subtracted from the $10K AL portioned SS deduction, leaving only a $4918 SS deduction?

If last case, reducing the already reduced/portioned AL residency SS tax deduction by the full excess amount seems excessive (might apply to full year AL resident, but fails to consider part-year cases with out-of-state SS tax).

[MaryK4]

Alabama tax regulations state that part-year residents may deduct expenses only to the extent the expenses were paid while the taxpayer was a resident. Since you paid $10,000 in Social Security tax while living in Alabama, that is the amount technically "paid while a resident."

[tgfirst]

Lacking any simple or clear answer on the excess, I think I’ve figured it out.

The full 10K SS component is deductible for AL FICA deduction (and added to the medicare component), and not reduced, or affected by the Federal SS tax excess amount.

The Federal SS tax excess is a federal issue only, of no concern for the AL state tax FICA deduction amount (would be best if the AL form 40 instructions never mentioned it, or at least not phrase it the way it is).

The excess is recorded (as a refund of excess taxes paid) on Federal 2025 taxes.  The refund is not realized until 2026, when 2025 Fed refund is received.   It's still unclear if it in any way may flow to the 2026 AL state tax return from the 2025 AL part-year condition, but should not.

[DianeW777]

Yes, see the required proration below. The full amount would only be allowed if you were a resident during the time of withholding.

• Part-Year Proration: Part-year residents can only deduct expenses, including federal taxes, to the extent they were paid while a resident of Alabama (AL).
• Allocation: If the deduction cannot be specifically attributed to the period of residency, it may be prorated based on the number of months of Alabama residency.

Alabama (AL) allows a deduction for excess Social Security (FICA) or Railroad Retirement Tax (RRTA) withheld by employers during the taxable year, similar to federal treatment. This excess amount, which occurs when you have multiple employers, is considered a deductible federal income tax payment for Alabama state tax purposes.

• AL Federal Income Tax Deduction

@tgfirst