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Retirees are not exempt from paying Alabama state tax.

However, Alabama does not tax Social Security, Federal retirement benefits, Alabama state retirement benefits, and periodic distributions from private defined benefit pension plans. A "defined benefit" pension plan is a traditional pension plan where the employer guarantees a certain benefit when you retire. The does not include a 401k type of plan which is a "defined contribution" plan where you take your chances with your own investments.

Distributions from IRA, 401k, etc plans are taxable in much the same manner as they are on your federal return. If you made deductible contributions to an IRA plan before 1982, you may be eligible for an additional adjustment.

All other types of income are taxable the same for retirees as for anyone else.

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Q: Do you have to pay Alabama state tax if you are retired?
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