Business Privilege Tax

Form Changes
Form PSA (Business Privilege Tax Return) is being replaced by Form CPT and Form PPT. The computation of the tax remains the same.

Form CPT (Alabama Business Privilege Tax Form for C-Corporations Only)
The following types of entities must file and remit the Form CPT :

C Corporations
Limited Liability Entities taxed as Corp.
Real Estate Investment Trust (REIT)
Insurance Company
Financial Institution Group Member
Business Trust

Form PPT (Alabama Business Privilege Tax Form for Pass-Thru Entities Only)
The following types of entities must file and remit Form PPT:

S Corporations
Limited Liability Companies
Limited Liability Partnerships
Limited Partnerships
Disregarded Entities

Annual Report
Schedule AL-CAR will be used by all corporations to report the annual report information.

Initial Return
Schedule BPT-IN will be used for all entities filing the initial return. This schedule must be attached to Form CPT
or PPT for all initial returns.

Electing Family Limited Liability Entity
Form BPT-E is the Electing Family Limited Liability Entity Form. This form must be attached to Form PPT annually for each entity making this election. The computation of the tax remains the same.

 

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Individual Income Tax

Online Filing of Extension (Form 4868A) - You can file your Form 4868A Online for Forms 40, 40A and Form 40NR by visiting https://www.alabamainteractive.org/taxextension/. There is NO CHARGE for this service. Extensions with payments and zero balance due are being accepted.


Direct Deposit - The Department now offers direct deposit on your refund for both electronically filed and mailed paper returns. For the 2004 tax year, this option will be available only for the Alabama Form 40 Individual returns. In order to receive a direct deposit refund for a paper return, your paper return must be prepared using tax preparation software that utilize 2D Bar Code technology. More detailed information about the requirements for direct deposit can be obtained in the Form 40 instruction booklet.


Form 40V - If making a payment with your return, you MUST complete Form 40V. Submit Form 40V along with your payment, loose in the envelope with your return. If you electronically filed your return and are making a payment by check or money order, you must complete a Form 40V. If you are making a payment by credit card or E-Check, a Form 40V is not required.


Credit Card Payments - You may be able to use your credit card to pay your tax liability.You may choose to use your Discover/Novus, MasterCard, Visa or American Express card by calling 1-800-272-9829 or visit www.officialpayments.com.


E-Check Payments - You can pay your Alabama Income Tax liability due on your returns, Assessments, and Invoices at NO CHARGE by visiting www.officialpayments.com/echeck.


Federal Refund Offset Program - Your 2004 federal or state refund will be taken to satisfy any outstanding liabilities owed to the State of Alabama or to the Internal Revenue Service.


Medical & Dental Payments Deduction - If you used your own car to travel to & from the place you received medical care, the mileage deduction increased from 12 cents to 14 cents a mile.


Occupational Taxes - Although not a new item, the total amount of occupational taxes (reported to the taxpayer on Form W-2) may still be deducted on Schedule A, line 8.




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Pass-Thru Entities

Online Filing of Extension (Form 4868A) - You can file your Form 4868A Online for Forms 41 and 65 by visiting https://www.alabamainteractive.org/taxextension/. There is NO CHARGE for this service. Currently, extensions with payments and zero balance due are being accepted.

Schedule NROA
Schedule NROA will no longer be published. It has been combined with Schedule NRA. (Alabama Pass Through Non-Resident Agreement). The completed Schedule NRA should be attached to Form 65 or 20S.

Schedule K-1
Schedule K-1 has been redesigned to resemble the new federal K-1. A separate K-1 should be completed for each shareholder.

Capital Credits
The allowance for a capital credit has been removed from Form 65 and Form 20S.

Composite Returns
Nonresident Owners Composite Filing Tax Return (Form 65C) and Nonresident Composite Payment Return and Extension (Form 20SC) have been combined into one form, Form PTE-C.

Both types of entities will file Form PTE-CK1 to list their shareholders and the taxes paid on their behalf.

Withholding Tax Return E-Filing Mandate

Reg. 810-3-74-.01 became effective August 26, 2004. Taxpayers who make individual or single tax payment amounts greater than $25,000 have been required to pay their taxes through EFT since 1992. This regulation mandates that those taxpayers will now have to file their returns electronically, also.

Previously, employers who did not meet the electronic funds payment requirement could choose whichever method they prefer (electronically or paper) to file. This regulation now requires uniform treatment of filing & paying: Either file electronically and pay electronically or file paper and remit taxes with a check.