Updated May 10, 2026
Capital Gains: 2-5%Income Tax: 2-5%Tax Summary
Alabama treats cryptocurrency as property, following federal IRS guidelines. Capital gains and crypto income are taxed as ordinary income at state rates of 2-5%. No crypto-specific exemptions apply.
Quick facts for Alabama, United States
Capital Gains Tax
2-5%Income Tax Rate
2-5%Capital Gains Tax
2-5%• Crypto capital gains follow federal classification: short-term as ordinary income, long-term at preferential federal rates.
• Alabama taxes all capital gains as ordinary income with no preferential rates.
• No state-specific exemptions or thresholds for crypto gains.
• Report via federal AGI on Alabama Form 40.
• Alabama taxes all capital gains as ordinary income with no preferential rates.
• No state-specific exemptions or thresholds for crypto gains.
• Report via federal AGI on Alabama Form 40.
Income Tax
2-5%• Mining income taxed as ordinary income at fair market value when received.
• Staking rewards taxed as ordinary income upon receipt.
• Follows federal treatment; no state-specific rules.
• Same progressive rates apply: 2% on first $500-$1,000, 4% next, 5% above.
• Staking rewards taxed as ordinary income upon receipt.
• Follows federal treatment; no state-specific rules.
• Same progressive rates apply: 2% on first $500-$1,000, 4% next, 5% above.
Reporting Requirements
• Report all crypto transactions on federal returns (Schedule 1, D); flows to state.
• File Alabama Form 40 (individuals).
• Deadline: April 15 (or extension to October 15).
• Keep records of cost basis, FMV.
• File Alabama Form 40 (individuals).
• Deadline: April 15 (or extension to October 15).
• Keep records of cost basis, FMV.
Special Notes
• No local income taxes in Alabama.
• No specific crypto guidance from AL DOR; defaults to federal.
• Virtual currency exempt from state property tax.
• Federal 1099-DA reporting starts 2026 for brokers.
• No specific crypto guidance from AL DOR; defaults to federal.
• Virtual currency exempt from state property tax.
• Federal 1099-DA reporting starts 2026 for brokers.
Other US States
Compare state-level crypto tax differences across the United States.
Alaska
CG: 0%Income: 0%
Arizona
CG: 2.5%Income: 2.5%
Arkansas
CG: 0-3.7% (50% deduction on long-term gains)Income: 0-3.7%
California
CG: 1%-13.3%Income: 1%-13.3%
Colorado
CG: 4.4% (flat rate)Income: 4.4% (flat rate)
Connecticut
CG: 2-6.99%Income: 2-6.99%
Delaware
CG: 2.2%-6.6%Income: 2.2%-6.6%
District of Columbia
CG: 4-10.75% (taxed as ordinary income)Income: 4-10.75%
Florida
CG: 0%Income: 0%
Georgia
CG: 5.19%Income: 5.19%
Hawaii
CG: Varies: short-term 1.4-11%, net long-term up to 7.25%Income: 1.4-11%
Idaho
CG: 0-5.3%Income: 0-5.3%
Illinois
CG: 4.95% (flat rate)Income: 4.95% (flat rate)
Indiana
CG: 2.95% state + 0.5%-3% local county (varies)Income: 2.95% state + 0.5%-3% local county (varies)
Iowa
CG: 3.8%Income: 3.8%
Kansas
CG: 5.2%-5.58%Income: 5.2%-5.58%
Kentucky
CG: 3.5%Income: 3.5%
Louisiana
CG: 3%Income: 3%
Maine
CG: 5.8%-9.15% (taxed as ordinary income)Income: 5.8%-9.15%
Maryland
CG: 2%-6.5% state + 2.25%-3.2% local; +2% surtax on net gains if FAGI >$350,000Income: 2%-6.5% state + 2.25%-3.2% local (varies by county)
Massachusetts
CG: 5% (LTCG), 8.5% (STCG) + 4% surtax >$1,083,150Income: 5% + 4% surtax >$1,083,150
Michigan
CG: 4.25%Income: 4.25%
Minnesota
CG: 5.35%-9.85% (+1% NIIT on net investment income > $1M)Income: 5.35%-9.85%
Mississippi
CG: 0% on first $10,000; 4.4% thereafterIncome: 0% on first $10,000; 4.4% thereafter
Missouri
CG: 0%Income: 2%-4.7%
Montana
CG: Long-term: 3.0%-4.1%; Short-term: 4.7%-5.65%Income: 4.7%-5.65%
Nebraska
CG: 2.46%-4.55% (taxed as ordinary income)Income: 2.46%-4.55%
Nevada
CG: 0%Income: 0%
New Hampshire
CG: 0%Income: 0%
New Jersey
CG: 1.4%-10.75% (as ordinary income)Income: 1.4%-10.75%
New Mexico
CG: 1.5% - 5.9%Income: 1.5% - 5.9%
New York
CG: 4-10.9% (state) + 3.078-3.876% (NYC)Income: 4-10.9% (state) + 3.078-3.876% (NYC)
North Carolina
CG: 3.99% (taxed as ordinary income)Income: 3.99%
North Dakota
CG: Short-term: 0%-2.5%; Long-term: effective 0%-1.5% after 40% exclusionIncome: 0%-2.5%
Ohio
CG: 2.75% (flat on income > $26,050)Income: 2.75% (flat on income > $26,050)
Oklahoma
CG: 0%-4.5%Income: 0%-4.5%
Oregon
CG: 4.75%-9.9%Income: 4.75%-9.9%
Pennsylvania
CG: 3.07% (flat rate)Income: 3.07% (flat rate)
Rhode Island
CG: 3.75%-5.99%Income: 3.75%-5.99%
South Carolina
CG: 1.99%-5.21% (44% deduction for net long-term capital gains)Income: 1.99%-5.21%
South Dakota
CG: 0%Income: 0%
Tennessee
CG: 0%Income: 0%
Texas
CG: 0%Income: 0%
Utah
CG: 4.5%Income: 4.5%
Vermont
CG: 3.35%-8.75%Income: 3.35%-8.75%
Virginia
CG: 2-5.75%Income: 2-5.75%
Washington
CG: 7% on long-term gains exceeding $278,000 (2025 threshold, inflation-adjusted)Income: 0% (no state income tax)
West Virginia
CG: 2.11% - 4.58% (taxed as ordinary income)Income: 2.11% - 4.58%
Wisconsin
CG: 3.5%-7.65% (30% subtraction for long-term)Income: 3.5%-7.65%
Wyoming
CG: 0%Income: 0%
Alabama Crypto Tax FAQ
Is cryptocurrency taxed in Alabama?
Alabama treats cryptocurrency as property, following federal IRS guidelines. Capital gains and crypto income are taxed as ordinary income at state rates of 2-5%. No crypto-specific exemptions apply.
What is the crypto capital gains tax rate in Alabama?
The state-level capital gains treatment in Alabama is currently listed as 2-5%.
How do I report crypto taxes in Alabama?
• Report all crypto transactions on federal returns (Schedule 1, D); flows to state.
Compare With Other Countries
Disclaimer: This information is AI-generated and for educational purposes only. Tax laws are complex and subject to change. Always consult with a qualified tax professional for advice specific to your situation.