State Taxes on unemployment benefits: Alabama does not tax unemployment benefits. In addition, unemployment compensation is provided by the federal CARES Act and subsequent extensions is exempted from any taxation by the state autotransportdealers auto transport dealers Website auto transport dealers com tax, county, or municipal income tax for 2020 and 2021 tax year.

 The first $50,000 received from an employer as severance pay as unemployment compensation, severance pay, or the like , as a consequence of “administrative downsizing” is not tax deductible.