Mortgage Interest Deduction in Alabama
State income tax rate
5%
Itemized deductions allowed
✅ Yes
State-Level Mortgage Interest Deduction
Alabama conforms to federal itemized deductions, so if you itemize federally you can also deduct mortgage interest on your Alabama return at rates up to 5%.
Combined Federal + Alabama Savings
If you paid $18,000 in mortgage interest last year and itemize on both returns, your combined tax savings would be approximately:
- Federal (22% bracket): $3,960
- Alabama (5% rate): $900
- Total estimated savings: $4,860
These are estimates based on a 22% federal bracket. Your actual savings depend on your specific tax situation.