- Filing threshold: Wage threshold (based on personal exemptions). Based on Alabama-sourced income, but prorated based on taxpayer’s share of Alabama income compared to global income.
- Reciprocity agreements: None.
- SBTCI (10 is best): 4.89
- Convenience of the employer rule? No.
- Withholding threshold: None.
- Total ROAM Index score: 2.95 out of 35
Alabama earns one of the lowest scores on the ROAM Index by doing very little to help remote/mobile workers and businesses that employ them. Though the state’s filing threshold is based on Alabama-sourced income, the fact that the threshold is prorated based on the ratio of income earned in Alabama means that it is effectively a global wage threshold. Meanwhile, the state offers no withholding threshold for businesses or reciprocity agreements.
To improve, Alabama should consider adopting defined-day filing and withholding thresholds of greater than 30 days, as well as entering into reciprocity agreements with neighboring states.
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