Does Alabama recognize the federal election to be treated as an S corporation?

Yes, use Form 20S.

When is the S corporation return due?

The return is due the 15th day of the third month following the end of the S corporation tax period.

Does Alabama accept the federal extension for S corporations?

Form 20S - S Corporation Income Tax Return
Yes, provided a copy of the federal extension is attached to the Form 20S when filed. If tax will be due on Form 20S, an Alabama extension (Form 20E) must be filed and the tax paid on or before the due date to avoid penalties and interest.

Form PTE-C - Composite Return
Yes, provided no payment is due. If a payment is due, Form 20E, an Alabama extension, must be filed and the tax paid on or before the due date to avoid penalties and interest.

Is a separate extension required for Form 20S and Form PTE-C?

No, the same extension will cover both returns.

Does Alabama accept consolidated S returns?

No, Alabama's income tax laws and regulations specifically requires each corporation to file a separate return with the department. ( §40-18-39(a), Code of Alabama 1975, Regulation 810-3-39-.01(5))

For tax years beginning after December 31, 1998, a qualified subchapter S subsidiary whose stock is 100% owned by an Alabama S corporation is disregarded and treated as a division of the parent.  The parent S corporation will file a 20-S return with this state.  An Alabama S corporation is any corporation with a valid election under 26 U.S.C. sections 1362 or 1362(b)(3) which conducts business within this state. 

Does Alabama allow the filing of composite returns for S corporation shareholders?

Yes, a composite return may be filed by the S corporation to report the income and pay the tax for the nonresident shareholders. Use Form PTE-C.

When is the composite return due?

The return is due the 15th day of the third month following the end of the S corporation tax period.

Does Alabama accept the federal extensions for composite returns?

An Alabama extension, Form 20E must be filed if there is tax due.

Can a non-resident opt out of the composite filing?

Yes, if the non-resident completes Schedule NRA (Alabama Pass-Thru Entity Non-Resident Agreement). This form should be notarized and attached to Form 65 when the partnership files. This election remains in place until the non-resident partner informs the partnership in writing that he/she wishes to revoke the agreement and participate in the composite filing.