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gwhatley
New Member

I worked as a state employee in Alabama. We are exempt from paying state taxes. Where do I indicate this on my state form?

Where do I indicate exemption from state taxes on an Alabama form?
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Cynthiad66
Employee Tax Expert

I worked as a state employee in Alabama. We are exempt from paying state taxes. Where do I indicate this on my state form?

Alabama considers income from Defined Benefit Retirement Plans to be excludable from tax, but you have to manually indicate that the plan qualifies to be excluded.

 

Here is a list of Alabama income that is exempt from state taxes.  If you are retired then that portion of your income could be exempt.

 

Follow steps below:

  1. Go back into your state return.
  2. Edit
  3. Then scroll through pages until you see the page in Exhibit 1 Below
  4. Click on Edit

 

Exhibit 1

 

The Special Handling screen will appear then just follow the prompts.

 

Exhibit 2

 

 

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