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Last updated: 19 October 2026
Alabama has several homestead exemption codes for older homeowners. H-2, H-3 and H-4 do not use the same income rule or remove the same taxes. Your county decides which code fits.
Bottom Line
Check H-3 first if you are 65 or older. It can remove all property taxes based on value (called ad valorem taxes) on a qualifying main home when the combined federal taxable-income test is met. H-2 gives a smaller county break using a different Alabama income test. H-4 gives a state tax exemption and the regular county homestead break when the lower-income path does not fit. A permanent and total disability may open another full-exemption route. Start with your county assessor.
Start Here
- Find your parcel number. Ask which homestead code is active.
- Bring recent state and federal returns. If you did not file, ask about other proof.
- Confirm the claim year, renewal and proof of approval.
Which exemption should you check?
| Code | Main test | Typical relief |
|---|---|---|
| H-3, age | 65 or older; taxpayer and spouse’s combined federal taxable income is $12,000 or less. | All state, county, city and school ad valorem taxes on the qualifying principal residence. |
| H-3, disability | Permanent and total disability, with required proof; no income limit for this route. | Full ad valorem exemption on the qualifying principal residence. |
| H-2 | 65 or older with Alabama adjusted gross income under $12,000, or certain retired, permanently and totally disabled or blind owners. | All state ad valorem tax; county exemption of up to $5,000 assessed value, including school district taxes. |
| H-4 | 65 or older, with income above the state low-income threshold in state guidance. | All state ad valorem tax; regular $2,000 assessed-value county homestead relief, subject to local rules. |
The Alabama exemption table describes these codes. These are tax exemptions, not grants. The $2,000 and $5,000 figures are assessed values, not cash savings.
For more on how exemptions differ from a rebate or freeze, see our state-by-state tax comparison.
What Has Changed
The October 2026 review checks the separate H-2 and H-3 income tests against Alabama law and the state’s 2025–2026 verification memo. A 2026 Alabama law change also removes annual eligibility verification after initial qualification for certain veterans the U.S. Department of Veterans Affairs has found permanently and totally disabled. This exception does not apply to every veteran or every senior. Confirm that the county has recorded the qualifying status.
As of this review, the state’s linked income memo still identifies the 2025–2026 tax year. It does not establish new 2026–2027 line references. Ask the assessor which return and filing period govern your current request.
The two $12,000 income tests are different
H-2: Alabama adjusted gross income
For the age-based H-2 route, Section 40-9-19(d) uses annual adjusted gross income less than $12,000 from the most recent Alabama return, or other appropriate evidence. The state’s October 2, 2025 2025–2026 assessor memo points officials to Form 40 line 10, Form 40A line 7 or Form 40NR line 12, column C. Do not substitute federal taxable income for this test.
H-3: combined federal taxable income
For age-based H-3, Section 40-9-21 uses net annual taxable income of $12,000 or less from the taxpayer’s and spouse’s latest federal return, or accepted proof. It is not gross household income, and it is not the Alabama income figure. On recent federal Forms 1040 and 1040-SR, taxable income is line 15; confirm the line on your actual form. If no federal return was required, the law provides an affidavit route.
At exactly $12,000, do not guess. H-2’s statute says less than $12,000, while Baldwin County’s published list says $12,000 or less and one state summary table also appears to misstate the H-2 cutoff. H-3 separately says $12,000 or less for combined federal taxable income. Ask the assessor to apply the statute and explain any boundary case in writing.
Simple example: A person may have Alabama adjusted gross income above $12,000 but combined federal taxable income at or below $12,000. That person should still ask about H-3. These are different numbers; a county must decide eligibility using the right evidence. For help understanding state returns, use our Alabama senior tax guide.
Which parts of the property-tax bill remain?
| Tax component | H-4 | H-2 | H-3 |
|---|---|---|---|
| State ad valorem | Removed | Removed | Removed |
| County ad valorem | Regular assessed-value break; balance may remain | Up to $5,000 assessed-value exemption; balance may remain | Removed |
| School ad valorem | May remain | Included in $5,000 assessed-value county relief; balance may remain | Removed |
| City ad valorem and separate fees | Check local bill | Check local bill | City ad valorem removed; separate service fees are not automatically waived |
The state property-tax explanation distinguishes state and local charges. Local millage rates and assessed values change the dollar savings. A full H-3 property-tax exemption does not itself erase garbage, fire or other service charges. Do not assume every line on a county statement is an ad valorem tax.
Homestead relief usually covers a qualifying owner-occupied single-family principal residence and up to 160 acres. Your home must qualify; a rental or second home is not the same as the main residence. One qualifying joint owner can be important, but the assessor must confirm ownership and occupancy.
County differences and extra protections
The H-2, H-3 and H-4 framework is statewide, but your county handles the application. Do not assume one county’s form, proof rules or local tax freeze applies in all 67 counties.
- Baldwin County: Its published exemption page explains the three codes and annual signatures for H-2 and H-3. It also lists a separate over-65 assessment freeze. The state’s Baldwin appraisal rule describes an age-65 and ten-year principal-residence history requirement. Confirm the present filing details before relying on the freeze.
- Jefferson County: Its special senior exemption page offers a distinct local assessed-value protection for qualifying owners age 65 or older who meet a five-consecutive-year principal-residence rule. It may sit alongside an ordinary senior homestead claim; it does not cancel changes in tax rates or tax on later additions.
- Lauderdale County: Act 2024-136 established a local senior assessment freeze with a five-year residence rule and a written county filing window. Use the official county directory to ask for the current Lauderdale form.
Alabama also has a 7% assessed-value cap for eligible Class II and Class III real property. It is not restricted to seniors, requires no separate application under state guidance, and does not freeze millage rates. The cap began affecting collections October 1, 2025; the state says it continues through the fiscal year beginning October 1, 2027. A tax freeze, the cap and a homestead exemption have separate rules. Ask the county how each applies; never add their possible savings together as a guaranteed total.
How to apply through your county
- Confirm the right office. Find the tax assessor or revenue commissioner where the home lies. Your county assessor handles homestead classification; a statewide private website cannot approve it.
- Check the claim year. The state homestead regulation describes October 1 through December 31 for a current-year exemption tied to the October 1 lien date, or an application during the year for the following year. Some county guidance speaks of the next bill instead. Ask for the exact tax and collection years in writing.
- Use the county form. Initial claims can be made in person or by mail under state verification law; the county may also offer electronic submission. Ask before mailing original records.
- Keep proof. Save the date, received form, exemption code, approval and updated property-tax record. Tell your mortgage servicer if taxes are paid through escrow.
| Item | Why it matters |
|---|---|
| Deed, parcel number, tax notice | Shows the home and helps staff locate the account. |
| Photo ID and residence proof | Supports age and owner-occupancy checks. |
| Latest Alabama and federal returns | H-2 and H-3 test different income figures; include spouse information where required. |
| Non-filer affidavit or disability proof | The county may accept permitted substitute evidence or a physician affidavit. |
| Annual eligibility notice | Some claims must be verified each year, even after initial approval. |
The state due-date guidance says taxes are due October 1 and delinquent after December 31. Ask if payment is required while your claim is pending.
Disability, blindness and non-filers
Permanent and total disability can qualify a homeowner for full principal-residence ad valorem relief under Section 40-9-21 regardless of age or income. When a disability pension or annuity does not establish the condition, the state may require two physicians’ affidavits, including one from a treating physician. Ask about the official physician form. Blind homeowners may qualify for separate state and county treatment; do not assume blindness automatically meets the full H-3 disability rule.
From October 1, 2026, a VA-certified permanently and totally disabled veteran qualifying under the law need not verify annually after initial approval. See our Alabama veteran assistance guide for other benefits, or our Alabama disability guide for related help.
If you do not have to file an income tax return, ask for the county’s affidavit route rather than deciding you cannot qualify. Do not invent income or submit a false statement. For joint ownership, a recent death or an inherited home, ask what documents prove ownership before changing any deed.
If you are denied, delayed or still billed
- Wrong code or income test: Ask the assessor which line, return and law determined your classification. Ask for review of H-3, H-2, H-4 and any disability path that fits.
- Missed notice: Ask whether annual verification is due and whether the county can correct your record. Do not assume the office must send a tax bill or reminder.
- Valuation dispute: Ask about the county Board of Equalization. The state’s assessment guidance explains valuation appeals; they are different from challenging an exemption decision. Request the actual appeal deadline for your notice.
- Escrow still high: Send the county’s approved tax record to the mortgage servicer and ask for a new escrow analysis.
- Tax sale or title trouble: Ask the county collector for a balance and any collection deadline at once. For title, probate or denial problems, contact Legal Services Alabama to ask whether help is available. Our Alabama emergency help guide covers related financial crises.
Reality check: An assessed-value exemption is not the same as a refund, an assessment freeze or a tax-payment plan. County taxes, school taxes and service fees may differ by location. A disputed code does not stop an unpaid bill from becoming delinquent.
For local support, ask an Alabama aging agency or 211 Connects Alabama. For tax-return questions, check IRS free tax help during its operating season.
Common mistakes to avoid
- Using state adjusted gross income for H-3, or federal taxable income for H-2.
- Thinking every owner age 65 or older pays no county or school property tax.
- Treating $5,000 of assessed value as a $5,000 cash payment.
- Missing the county’s annual verification notice, when required.
- Assuming local senior freezes apply in every Alabama county.
- Changing a deed or moving out without asking whether the homestead and freeze will survive.
Phone scripts
Check the code:
“I am over 65 and this is my main home. Which homestead code is on my parcel? Can you check H-3, H-2 and H-4?”
Check the income:
“Which Alabama return line do you use for H-2? For H-3, do you need our combined federal taxable income? What if we did not file?”
Check timing:
“If I file before December 31, which tax year will change? Do I need to verify every year? Can you mail the form?”
After a denial:
“Could you give me the reason in writing? Is this an income, residency or document issue? Who reviews a denied exemption?”
Resumen en español
En Alabama, las exenciones H-2, H-3 y H-4 reducen impuestos sobre la vivienda principal. No son subvenciones en efectivo. H-2 usa ingresos ajustados de Alabama menores de $12,000; H-3 para personas de 65 años o más usa ingresos federales sujetos a impuestos de la persona y su cónyuge de $12,000 o menos. H-3 también puede cubrir discapacidad total y permanente sin límite de ingresos. H-4 da una exención estatal y una reducción normal del condado. Las tasas y los trámites locales varían.
Llame a la oficina de impuestos de su condado. Prepare la escritura, identificación y las últimas declaraciones estatales y federales. Pregunte el año fiscal, la fecha límite, cómo renovar y cómo pedir una revisión si recibe una negativa.
Common Questions
Does everyone in Alabama pay no property tax at age 65?
No. Age 65 can remove the state ad valorem portion on a qualifying homestead, but county, school or city taxes may remain. Ask the county which code applies.
Is H-3 based on the same $12,000 income test as H-2?
No. Age-based H-3 uses combined federal taxable income of $12,000 or less. Age-based H-2 uses Alabama adjusted gross income of less than $12,000 or other accepted proof.
Can an H-2 homeowner stop paying school taxes?
H-2 includes school district ad valorem taxes in the county assessed-value exemption, up to its limit. Any remaining taxable value may still generate a school tax bill.
Can I claim H-2 and H-3 together?
These are alternative homestead classifications for the same residence, not two cash awards. Ask the county to select the correct code. A separate local freeze may have its own conditions.
When should I file or renew?
Ask the county which tax year your claim affects. State guidance describes October 1 through December 31 for a current-year claim and another route for the next year. Annual verification may apply after initial approval.
Does permanent disability have an income limit?
The full principal-residence exemption for permanent and total disability under Alabama law has no income limit. The county will require suitable proof, and the property must qualify.
About This Guide
This guide uses official federal, state, local, and other high-trust nonprofit and community sources mentioned in the article.
Editorial note
This guide is produced based on our Editorial Standards using official and other high-trust sources, regularly updated and monitored, but not affiliated with any government agency and not a substitute for official agency guidance. Individual eligibility outcomes cannot be guaranteed.
Corrections
Please note that despite our careful verification process, errors may still occur. Email info@grantsforseniors.org with corrections and we will respond within 72 hours.
Disclaimer
This article is for informational purposes only and is not legal, financial, medical, tax, disability-rights, immigration, or government-agency advice. Program rules, policies, and availability can change. Readers should confirm current details directly with the official program before acting.
Last updated: 19 October 2026 · Next review: 17 January 2027
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