Alabama Guide for Canadians

Quick Facts

State Income Tax	Progressive 2% to 5%
Sales Tax	4% state + local (9.22% average)
Driver's License Grace Period	30 days for residents
Residency Requirement for Tax	Domicile in Alabama
Vehicle Registration Deadline	30 days for residents
REAL ID Deadline	May 7, 2025 for domestic flights
Enhanced Driver's License	Not available

First 90 Days Checklist

Week 1-2: Essential Documents & Registration

• Register with USCIS if staying 30+ days (required by April 11, 2025)
• Gather required documents for driver's license
• Open US bank account
• Set up Alabama mailing address

Week 3-4: Official Registration

• Apply for Alabama driver's license (within 30 days)
• Register vehicle if brought from Canada (within 30 days)
• Register to vote (if eligible)
• Obtain Alabama identification if not driving

Month 2-3: Establishing Residency

• Update address with Canadian financial institutions
• Establish Alabama ties and connections
• Research healthcare options and insurance
• Explore local communities and Gulf Coast attractions

Driver's License & Vehicle Requirements

For Canadian Citizens

Required Documents:

• Original valid Canadian passport (proof of legal presence)
• Social Security Number or letter of ineligibility
• Two proofs of Alabama residential address
• Birth certificate or citizenship documents for identity

Testing Requirements:

• Written knowledge test required for Canadian citizens
• Vision screening required
• Road skills test required - AL does not recognize foreign licenses
• No pre-licensing course required
• Canadian license will be returned after successful testing

REAL ID Compliance:

• Alabama offers REAL ID compliant licenses (STAR ID)
• Required by May 7, 2025 for domestic air travel
• Enhanced Driver's License not available in Alabama
• Canadians must use passport for border crossings

Important Notes:

• 30-day limit to get AL license after residency
• REAL ID (STAR ID) required by May 7, 2025 for air travel
• Must surrender valid out-of-state/country license
• Alabama requires proof of liability insurance

Vehicle Registration

• Register within 30 days of establishing residency
• Annual safety inspection not required
• Emissions testing not required statewide
• Alabama insurance required for registration

Tax & Residency Considerations

Alabama State Tax Structure

• **Progressive income tax** 2% to 5% based on income
• **No local income tax** (state-level only)
• **No estate tax** (repealed in 2005)
• **Very low property taxes** (0.41% effective rate - 2nd lowest in US)
• **High sales tax** 4% state + local (9.22% average)

Establishing Alabama Tax Residency

Alabama residency is primarily based on domicile:

• Domiciled in Alabama (intent to make permanent home)
• Physical presence supports but doesn't determine residency
• Intent to remain permanently is key consideration

Documentation to Establish Residency

• Alabama driver's license and voter registration
• Bank accounts and utility bills in Alabama
• Employment or business activities in Alabama
• Professional licenses, club memberships
• Property ownership or long-term lease

Property Tax Advantage

Alabama has the second-lowest property tax rates in the nation at 0.41% effective rate, making it extremely attractive for property owners and retirees.

US Federal Tax Implications for Canadians

Important: Under the Substantial Presence Test, you may be considered a U.S. resident for tax purposes.
New Requirement: Canadians staying 30+ days must register with USCIS by April 11, 2025.
Recommendation: Consult a cross-border tax professional.

Healthcare Considerations

Insurance Options

• Alabama uses federal healthcare.gov marketplace
• Travel insurance strongly recommended for visitors
• Consider US health insurance if staying permanently
• Major medical centers in Birmingham, Mobile, Montgomery, Huntsville

Prescription Medications

• Bring adequate supply from Canada
• Understand prescription transfer requirements
• US prices often higher than Canadian prices
• Research pharmacy options and discount programs

Special Considerations for Snowbirds

New US Registration Requirements (2025)

• Canadians staying 30+ days must register with USCIS
• Registration required by April 11, 2025
• Print and carry latest I-94 as proof of legal entry
• Failure to register may affect future US travel

Maintaining Canadian Ties

• Keep principal residence in Canada
• Monitor days in U.S. for tax reasons (183-day rule)
• Maintain Canadian insurance & banking relationships
• AL domicile-based residency requires careful planning

Property Considerations

• Very affordable property values, especially outside major cities
• Extremely low property tax rates (0.41% effective)
• Gulf Coast properties more expensive but still reasonable
• Impact on Canada's principal residence exemption

Climate & Lifestyle Factors

• Humid subtropical climate with mild winters
• Hot, humid summers; pleasant winter temperatures
• Gulf Coast beaches and outdoor recreation
• Very low cost of living throughout the state

Geographic Advantages

• Gulf of Mexico coastline with beautiful beaches
• Major airports in Birmingham, Mobile, and Huntsville
• Appalachian Mountains in northern Alabama
• Central location in the Southeast

Travel Documentation

• Ensure passport validity (6+ months remaining)
• Consider Global Entry/NEXUS for easier border crossings
• Enhanced Driver's License not available in Alabama
• I-94 registration now required for 30+ day stays

Cost of Living Advantage

Alabama offers one of the lowest costs of living in the US, with extremely low property taxes, affordable housing, and reasonable everyday expenses. Particularly attractive for retirees.

Cultural Considerations

• Deep Southern culture and hospitality
• Rich Civil Rights history and museums
• College football culture (Alabama, Auburn)
• Growing international communities in major cities

Recreational Opportunities

• Gulf Coast beaches (Gulf Shores, Orange Beach)
• Tennessee River and lake recreation
• Appalachian hiking and outdoor activities
• Historic sites and cultural attractions

Key Contacts & Resources