--- title: Alabama Issues Withholding Guidance for Nonresident Employees description: Alabama Department of Revenue issues guidance for employers on income tax withholding for nonresident employees. image: https://payroll.org/images/default-source/default-album/map-of-alabama-with-pin-in-montgomery.jpg?sfvrsn=9c70506c_0 --- [![soc-fb](https://blogs.payroll.org/hubfs/ct-23-assets/footer-icon_fb.svg "soc-fb")](https://www.facebook.com/American-Payroll-Associations-Chapter-Relations-877434285724525/) [![soc-in](https://blogs.payroll.org/hubfs/ct-23-assets/footer-icon_li.svg "soc-in")](http://www.linkedin.com/groups?about=&gid=1051077&trk=anet_ug_grppro) [![soc-tw](https://blogs.payroll.org/hubfs/ct-23-assets/footer-icon_tw.svg "soc-tw")](https://twitter.com/APAChapters?lang=en) - [Home](https://blogs.payroll.org/chapter-leaders) - [About](https://blogs.payroll.org/about) - [Connect](https://blogs.payroll.org/connect) - [Resources](https://blogs.payroll.org/resources) ![23-PayNewsNow-Horiz-Logo](https://blogs.payroll.org/hs-fs/hubfs/23-PayNewsNow-Horiz-Logo.png?width=1300&name=23-PayNewsNow-Horiz-Logo.png "23-PayNewsNow-Horiz-Logo") [![26 PayrollOrg®RGB-NoTag long](https://blogs.payroll.org/hs-fs/hubfs/26%20PayrollOrg%C2%AERGB-NoTag%20long.jpg?width=1300&name=26%20PayrollOrg%C2%AERGB-NoTag%20long.jpg "26 PayrollOrg®RGB-NoTag long")](https://payroll.org/) Custom URL No Widget: By [Lia Coniglio, Esq.](https://blogs.payroll.org/pay-news-now/author/lia-coniglio-esq) on Oct 2, 2026, 9:04:15 AM # Alabama Issues Withholding Guidance for Nonresident Employees The AlabamaDepartment of Revenue (DOR) issued a notice detailing guidance for employers on income tax withholding for nonresident employees \[DOR**, [Notice](https://www.revenue.alabama.gov/notice-alabama-income-tax-withholding-guidance-for-nonresident-employees/)**, *Alabama Income Tax Withholding Guidance for Nonresident Employees*\]. ### **Remote Work** The guidance clarifies that remote workers should be taxed based on where the employee actually performs the services rather than where the employer is based. In 2023, the state tax tribunal upheld a DOR assessment of state income tax on wages earned by an employee who worked for an Alabama employer remotely from his home in Idaho. In the newly issued notice, the DOR explains that it will not follow this ruling. ### **General Rules** Employers are required to withhold state income tax from wages paid to a nonresident employee only to the extent the wages are attributable to services physically performed in Alabama. Alabama has a 30-day safe harbor rule. This means that the state exempts wages earned by certain nonresidents performing services in the state for 30 or fewer days in a calendar year from state income tax.      The state does not have reciprocity agreements with neighboring states that would eliminate withholding obligations based on an employee’s resident state. --- Interested in more state and local payroll coverage? PayrollOrg’s **[*PayState Update*](https://ebiz.payroll.org/ebusiness/ProductCatalog/Product.aspx?ID=19)** eNewsletter is perfect for you. --- *Lia Coniglio, Esq., is Managing Editor of* PayState Update *and Senior Manager of State Payroll Information Resources for PayrollOrg.* ### Search ![payroll-logo-white](https://blogs.payroll.org/hs-fs/hubfs/payroll-logo-white.png?width=200&name=payroll-logo-white.png "payroll-logo-white") [Privacy Policy](http://www.americanpayroll.org/privacy/)     |     Acceptable Use ©[PayrollOrg](http://payroll.org) [![soc-fb](https://blogs.payroll.org/hubfs/ct-23-assets/footer-icon_fb.svg "soc-fb")](https://www.facebook.com/PayrollOrg) [![soc-in](https://blogs.payroll.org/hubfs/ct-23-assets/footer-icon_li.svg "soc-in")](https://www.linkedin.com/company/payroll-org/mycompany/) [![Twitter-X-White-Logo-PNG](https://blogs.payroll.org/hs-fs/hubfs/Twitter-X-White-Logo-PNG.png?width=20&height=19&name=Twitter-X-White-Logo-PNG.png)](https://twitter.com/PayNews)