The Alabama Department of Revenue offers a FREE electronic service, My Alabama Taxes (MAT), for filing and remitting withholding tax. Complete Form W-4 so that your employer can withhold the correct federal income tax from your pay.Give Form W-4 to your employer. Withholding is a combination ofthe State income tax, which has rates graduated per taxable income, (see chart below) and local taxes. Gov (search: IT-2104-I) or scan the QR code below. As an employer, you must record sums that are withheld from employee wages in a ledger account to clearly indicate the amount of state tax withheld.