Taxability to Individuals
Salaries and wages are fully taxable to the individual providing the services. This is true for Federal, State of Alabama, and Jefferson County/City of Birmingham tax purposes.
However, this is not always true of scholarships/fellowships (trainee payments). The legal definition of a scholarship/fellowship is the same for Federal, State of Alabama, and Jefferson County/City of Birmingham tax purposes, though the taxability of those scholarships/fellowships varies.
The following is a guideline for completing federal and State of Alabama tax forms related to scholarship/fellowship payments.