See all 50 states on one map and compare side-by-side. Start 7-day free trial — no card required
Alabama
Employee Obligations (Which Returns YOU Must File)
Alabama has a Convenience of Employer rule that affects Minnesota residents. If your employer is in Alabama and you work remotely from Minnesota, Alabama may still tax your paycheck. File a nonresident Alabama return plus your Minnesota return and claim the Schedule M1CR credit. Consider consulting a CPA.
Employer Obligations (What Your Employer Must Withhold & Remit)
Alabama's Convenience of Employer rule may require withholding Alabama tax even if the Minnesota employee works 100% remotely. Register for Alabama withholding and unemployment. May need to withhold AL tax for a remote MN employee due to the COE rule. Unemployment is approximately 2.7% on the first $8,000 of wages.
City & Local Income Taxes (Extra Filings Beyond the State Return)
Over 25 Alabama cities charge occupational taxes on nonresidents. Birmingham 1%, Gadsden 2%, Opelika 1.5%, Auburn 1%, and others range from 0.5% to 2%.
Remote Work Tax Risk — Convenience of Employer (COE) Rule
Alabama has a full Convenience of Employer rule that affects Minnesota residents. If your employer is based in Alabama and you work remotely from Minnesota, Alabama may tax your entire paycheck as if you worked there.
Related guides
More from Minnesota · Cross-State Work
- Minnesota → Mississippi
- Minnesota → Montana
- Minnesota → North Carolina
- Minnesota → North Dakota
- Minnesota → Nebraska
Moving to Alabama from elsewhere · Cross-State Work
This is general information, not tax or legal advice. Laws change frequently. Always consult a licensed CPA or tax attorney for your specific situation. All information researched as of March 21, 2026.