Alabama Estimated Tax Payments (2026)

Do you have to pay estimated taxes in Alabama?

Yes. If you're self-employed in Alabama and expect to owe $500 or more in Alabama income tax for 2026 after withholding, you must make quarterly estimated payments to the Alabama Department of Revenue. That is below the federal $1,000 threshold, so most part-time self-employed people owe them too. Alabama taxes income at graduated rates up to 5%.

When are Alabama estimated taxes due in 2026?

Alabama's 2026 quarterly payments are due April 15, June 15, September 15, and January 15, in four equal installments, on the same calendar as your federal payments.

• Q1, April 15, 2026

• Q2, June 15, 2026

• Q3, September 15, 2026

• Q4, January 15, 2027

How much should you set aside for Alabama estimated taxes?

Plan to set aside 25% to 30% of your net self-employment profit to cover federal and Alabama taxes combined, then confirm the exact amount with the calculator above. On $50,000 of net self-employment profit, federal self-employment tax alone is about $7,065 (15.3% on 92.35% of your earnings). On top of that you'll owe federal income tax and Alabama income tax at graduated rates up to 5%.

How do you avoid an Alabama underpayment penalty?

To avoid an Alabama underpayment penalty, pay the smaller of 90% of your 2026 Alabama tax or 100% of your 2025 tax, or 110% of last year's tax if your prior-year AGI topped $150,000, in four on-time installments. Paying the full amount late doesn't help; each installment has to be on time. You can estimate a federal underpayment penalty here.

What deductions lower your Alabama estimated taxes?

Because estimated taxes are based on your net profit, every business write-off you claim lowers what you owe each quarter. Common deductions for 1099 workers, reported on Schedule C, include the home-office deduction, car mileage, phone and internet, software, and supplies. Two federal deductions don’t help on your Alabama return: Alabama doesn’t let you deduct half of your self-employment tax, and it doesn’t allow the federal Qualified Business Income (QBI) deduction, which can remove up to 20% of your qualified business income from your federal taxes. If you itemize on your Alabama return, you can deduct the federal self-employment tax you paid during the year instead.

Keeper's 1099 tax calculator estimates your bill after deductions, and our write-off guides list the deductions for your line of work.

Do self-employed people in Alabama owe local taxes too?

Sometimes. Birmingham, Bessemer, Gadsden, and a few other cities charge an occupational tax of 1% to 2% on pay earned there. Self-employed people usually need a city business license instead, so check with your city.

Note: Figures are current for the 2026 tax year and are for planning, not tax advice. Confirm the details with the Alabama Department of Revenue before you file.

How to file quarterly taxes in Alabama

Filing quarterly in Alabama means two separate payments each period: one to the IRS for federal tax, and one to the Alabama Department of Revenue for your state taxes. Here’s how to do it.

1. Confirm you need to pay. You owe estimated payments when tax isn’t withheld from enough of your income — 1099 or freelance work, investment income, or other untaxed income. Federal and Alabama run separate tests: the state generally requires estimated payments if you expect to owe $500 or more in Alabama tax after withholding and credits, subject to its safe-harbor rules.
2. Calculate your federal estimate. Use the Form 1040-ES worksheet (or tax software). Estimate your full-year income, add your federal income tax and self-employment tax, subtract anything already withheld from a paycheck, and split the rest across the year. The estimate at the top of this page gives you a starting number.
3. Calculate your Alabama estimate separately. Work out your Alabama amount on its own using Form 40ES. Don’t just send part of your federal payment to the state — the Alabama calculation is separate, based on your Alabama income tax, credits, and any Alabama withholding.
4. Pay the IRS. Pay through IRS Direct Pay (or EFTPS) and choose the estimated tax / Form 1040-ES option. Select tax year 2026 and save the confirmation number. This money counts only toward your federal taxes.
5. Pay Alabama separately. Make a second payment to My Alabama Taxes and select the Form 40ES estimated payment for 2026. Save that confirmation too. This money counts only toward your Alabama taxes.
6. Repeat on each deadline. For 2026, federal estimated payments are due April 15, 2026, June 15, 2026, September 15, 2026, and January 15, 2027. Alabama uses those same four dates.

Steps reflect 2026 rules and are for planning, not tax advice.