|
|
|
New Questions
Filing Requirements
Estimated Tax payments
Net Operating Losses (NOL)
Deductions
IRS Audits
Tax Rates
Multistate Tax Compact
General Information
All single business tax payments of $750 or more must be remitted by EFT. Substantial penalties can be assessed for noncompliance.
You can now file your Form 20E (Corporate Income Tax Extension) and Form 20CD (Corporate Estimated Tax Payments) ONLINE!!! You may pay your Corporate Income Tax Invoice, Assessment and return payments by Credit Card or at NO CHARGE by E-Check.
Capital Credit Information is located on the Tax Incentives page.
Based on the approval given by the Internal Revenue Service for exemption from Federal income tax under Section 501 (c), 527, or 4947 (a) (1) of the Internal Revenue Code, your organization is determined to qualify as an exempt organization pursuant to Section 40-18-32, as amended by the Corporate Income Tax Reform Act of 1985.
Your organization will not be required to file corporation income tax returns with the Alabama Department of Revenue for as long as it retains its exempt status under applicable Federal and State laws, unless it has unrelated business income. If it does have unrelated business income, it should file a Form 20C with a copy of Federal Form 990T.
Generally refer to Public Law 86-272 Bright Line Test to determine if you have nexus in Alabama. However, there are instances where a taxpayer would normally fall under Public Law 86-272 and may be required to file a corporate return.
The return is due on the 15th day of the third month following the end of the tax period. Use Form 20C.
Yes, provided the federal extension is attached to the Alabama return when the return is filed. If tax will be due, an Alabama extension (form 20E) must be filed and the tax paid on or before the original due date of the 20C return in order to avoid penalties and interest. You can now file your Form 20E (Corporate Income Tax Extension) online.
For tax periods beginning before January 1, 1999 - No. Alabama's income tax laws and regulations specifically required each corporation to file a separate return with the department (§40-18-39(a) and Regulation 810-3-39-.01(5)).
For tax period beginning after December 31, 1998 - Yes. Alabama's Tax Conformity Act (Act 98-502) allows an Alabama "affiliated group" to elect to file a consolidated Alabama tax return, provided the "group" files a consolidated federal return for the same taxable year. An "Alabama affiliated group" means a group of corporations that constitute an affiliated group as defined in 26 U.S.C. § 1504, one or more members of which are subject to tax under §40-18-31.
For tax periods beginning after December 31, 2001 - Yes. Act 2001-1089(HB4) revised the Consolidated filing requirements in Alabama Code Section 40-18-39 for tax periods beginning after December 31, 2001. Alabama consolidated returns can only include Alabama "nexus" companies.
Each corporation included in the Alabama consolidated return must compute their Alabama taxable income on a separate company basis. Then, the taxable income of the Alabama group is combined to determine the tax due. The filing fee has also been increased from a maximum of $12,500 to a $25,000 maximum. This election is binding for 120 consecutive months.
For tax years beginning January 1, 2001, the tax rate is 6.5%. For tax years prior to 2001, the tax rate was 5%.
Yes. You need to use Form 20CD (Corporate Estimated Tax Payments) to file your estimated tax payments. You can file the Form 20CD online at https://www.alabamainteractive.org/taxestimation/.
No, Alabama law does not require the payment of a minimum corporate income tax.
No, Alabama law does not provide for the carry back of a net operating loss.
NOTE: For all tax periods beginning during calendar year 2001, Section 40-18-35.1 ( Act 2001-1088 (HB2)) suspends net operating losses.
Yes, Alabama's net operating loss carry forward provision began with net operating losses incurred during a tax year beginning on or after January 1, 1984. Prior to this period Alabama did not have a net operating loss provision. A net operating loss incurred during a tax year beginning on or after January 1, 1984 and before January 1, 1985 can be carried forward 5 years. A loss from a tax year beginning on or after January 1, 1985 can be carried forward 15 years. For tax years beginning on or after January 1, 1985 and before January 1, 1990, the net operating loss deduction was limited to $600,000 per year.
Yes, Alabama has adopted the provisions of the Multistate Tax Compact which provides for the allocation and apportionment of income of taxpayers doing business in more than one state (Code of Alabama, 1975, 40-27-1, and Rule 810-27-1-4).
Yes, Federal income tax may be deducted for the taxable year in which paid or accrued, according to the method of accounting used in computing taxable income. The federal income tax allowable as a deduction is the net tax liability as accrued and subsequently paid, that is, the amount after subtracting all deductible and/or refundable credits.
The federal income tax deduction for any taxable year for members of an affiliated group filing a consolidated federal income tax return, shall be determined in accordance with the method elected under 26 U.S.C. §1552 (without regard to any election under 26 U.S.C. §1502) for its consolidated federal return.
Corporations which do business in Alabama are allowed to deduct federal income taxes attributable to their Alabama income (Code of Alabama, 1975, § 40-18-35(a)(2), and Rule 810-3-35-.01(1)(b).
Yes, charitable contributions are deductible to the extent deductible for federal income tax purposes under 26 U.S.C. §170.
The corporation should file an Alabama income tax return just as any other corporation. If the income is business income, then the corporation's pro rata share of the partnerships property, salaries, and income should be included in the apportionment factor. If the income is nonbusiness, then the income should be allocated to Alabama.
To report changes made by the IRS, a corporation shall file an amended Form 20C or Form 20S for the specific tax period. The following information MUST be included with the amended return (see Regulation 810-3-40-.01(4)):
1. A complete copy of the revenue agent's report (RAR) provided by the IRS to include Form 4549-A, 4549-B and Form 870,
2. A copy of the Form 20C or 20S as originally filed, and
3. Federal Form 1120 as originally filed and/or amended
If the corporation is part of a consolidated group, the following information is required along with the above information:
If the IRS audit results in a refund, the request for refund must be made within one year from the date of final determination of the IRS audit. If the audit results in additional tax due, the department can access the additional tax within one year after the Department has been notified.1. A listing of the IRS adjustments made to each company in the consolidated group,
2. A copy of the Federal Form 851, Affiliations Schedule,
3. A copy of the income statement spread for every company, and
4. A copy of the consolidated Federal 1120 as originally filed and/or amended.
If your tax liability
is $750.00 or more you must remit your tax by electronic funds transfer
(EFT). You must register with the department. Call the EFT unit at 1-800-322-4106
or (334) 242-0192.
Updated last: January 31, 2007
