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The following are frequently asked questions concerning the Alabama individual income tax laws. The answers for these questions and many others can be found in the downloadable versions of the Form 40, Form 40A, and Form 40NR booklets available on this web site.
The self-employment tax must be deducted as an itemized deduction on the cash basis. The Department's position has been that the self-employment tax is considered paid when the federal tax return is completed and filed, whether the monies used to pay it came from estimated payments, withholding or money paid with the return. When the tax return is completed and filed the taxpayer is able to determine how much of his estimate and/or withholding is used to pay federal income tax and how much is used to pay self-employment tax, and not until then.
As an example: A taxpayer pays $15,000 in estimated tax for 2001. When the 2000 return is filed in 2001 the taxpayer owes $5,000 in income tax and $9,180 in self-employment tax. His Federal Income Tax (FIT) deduction for 2000 would be his $15,000 estimated tax payments. Any 1999 refunds received in 2000 or 1999 payments made in 2000 would be reported on the appropriate lines. We are also assuming that there were no other refunds or liabilities received or paid in 2000.
On his 2001 return, considering that 2001 is the transition year to the accrual basis of deducting FIT, the taxpayer would report a $10,000 (9180 + 820) FIT refund and take a $9180 itemized deduction for self-employment tax on Schedule A. He would deduct his 2001 Federal income tax liability on the appropriate line. At the time the federal return is filed the amount of self-employment tax will have been determined and that amount would be deductible on the 2002 return as an itemized deduction, just as in prior years.
The
taxpayer would not lose any self-employment tax deduction for any year.
That depends upon several things: Whether or not you filed electronically, how early in the tax season you filed, etc. To get your refund faster file early or file electronically.
To check on the status
of your refund, wait at least six weeks after filing your return, then phone
our REFUND HOTLINE: 1-334-353-2540. Instructions
for Refund Hotline!
Your 2005 Alabama individual income tax return is normally due April 15, 2006; however, since April 15th is on a Saturday your return is due by April 17, 2006.
No. You must use Alabama's Form 4868A, a copy of which is available on our web site or you can file electronically by using the link on our website.
Yes. If you file and have a balance due, the amount owed can be charged to your American Express, Visa, Discover/Novus, or MasterCard. Credit card payments may be made by telephone by calling 1-800-2PAY-TAX. (1-800-272-9829), or over the internet by visiting www.officialpayments.com. A convenience fee will be charged by Official Payments Corporation when paying by credit card. Do not include Form 40V with your return when you pay your taxes by credit card.
Yes. If you file and have a balance due, the amount owed can be made by E-check over the internet by visiting www.officialpayments.com/echeck/index.jsp. There is no fee for this service. Do not include Form 40V with your return when you pay your taxes by credit card.
Full year residents whose filing status is "Single", "Married Filing Separate Return", or Head of Family" must file if gross income for the year is at least $1,875. Those whose filing status is "Married Filing Joint Return" and whose gross income for the year is at least $3,750 must file an Alabama income tax return.
Part year residents whose filing status is "Single," "Married Filing Separately," or "Head of Family" must file if annual gross income is at least $1,875 while an Alabama resident. Those whose filing status is "Married Filing Jointly" must file if annual gross income is at least $3,750 while an Alabama resident.
Nonresidents must file a return if Alabama income exceeds the allowable prorated personal exemption.
There are four different filing statuses available under Alabama law:
1. Single
2. Married Filing a Joint Return
3. Married Filing a Separate Return
4. Head of Family
Taxpayers using the Single and Married Filing Separately filing statuses are entitled to a $1,500 personal exemption. Taxpayers using the Married Filing Jointly and Head of Family filing statuses are entitled to a $3,000 personal exemption.
Part year residents are entitled to the full exemption amount. A dependent or student may claim a personal exemption even if claimed by someone else.
You cannot claim a foster child, friend, cousin, yourself, or your spouse as a dependent on your Alabama income tax return.
Yes, with a few exceptions. In Alabama, a foster child does not qualify a taxpayer to claim "Head of Family". Also, you must be unmarried in order to qualify for "Head of Family" filing status with the state.
The Alabama standard deduction is based on the filing status used by the taxpayer.
The standard deduction for taxpayers using the Single filing status, the Married Filing Separately filing status and the Head of Family filing status is the lesser of 20% of adjusted gross income or $2,000.
The standard deduction for taxpayers using the Married Filing Jointly filing status is the lesser of 20% of adjusted gross income or $4,000.
No.
For single persons, heads of families, and married persons filing separate returns:
2%
First $500 of taxable income
4% Next $2,500 of taxable income
5% All taxable income over $3,000
For married persons filing a joint return:
2%
First $1,000 of taxable income
4% Next $5,000 of taxable income
5% All taxable income over $6,000
Interest on obligations of the State of Alabama or any county, city, or municipality of Alabama, and interest on obligations of the United States or any of its possessions.
No, nor does Alabama have a child care tax credit.
Military personnel who list Alabama as their home of record are required to pay Alabama income tax regardless of where they are assigned or the length of time spent in Alabama. Alabama income tax law does not exempt active duty military.
Yes, on Form 40NR, a copy of which is available on this web site.
If your personal residence was sold prior to 1998, you would be required to report the sale of your home on federal Form 2119.
Because Alabama law is now the same as federal law in this area, the treatment of 1998 Alabama tax returns, and forward, will be the same as for your federal return.
Contributions: Contributions to an individual retirement arrangement (IRA) may be taken as an adjustment to income, the same as for federal tax purposes. These deductible contributions represent a deferral of tax on a portion of your income.
Distributions: At the time funds are distributed from these IRA accounts, the amount on which tax has been deferred cannot be claimed as part of the cost basis in the fund.
Since Alabama income tax law prior to 1982 did not conform to federal tax law in this area, you may have a cost basis in the fund for amounts contributed prior to 1982.
Roth IRA: Alabama recognizes Roth IRA's.
No, you can use the Married Filing Separately filing status.
You may use either
method. Compute your deduction using both methods and compare the
results. Base your deduction on the method resulting in the greatest advantage
to you.
Probably. Check with your Authorized IRS E-file Provider to determine if this option is available to you! Almost any return that can be filed electronically for the IRS can also be filed electronically for Alabama.
Yes. More on PC Online Filing.
Yes. Our TTY number is (334) 242-3061.
Submit a copy of the complete federal Form 4852 (Substitute W-2) and attach it to your Alabama return with copies of your pay stubs and/or leave and earnings slips.
You should secure a corrected withholding statement (Form W-2C) from your employer.
No. We are happy to mail or ship to you as many forms as you need. Please phone or fax your request to your nearest Taxpayer Service Center. For bulk orders, please use our Form 2300, which you may download from this web site. Mail or fax it to the address/number shown. Also, most of the Alabama individual income tax forms are available in downloadable form on this web site.
You have several available resources for assistance:
- Specific instructions for all three of Alabama's income tax returns are available on this web site or in print.
- Submit your questions via e-mail at Contact Us.
- The Alabama Taxpayer Service Center nearest you. Phone and fax numbers are listed on this web site.
All income is subject to Alabama income tax unless specifically exempted by state law.
Click here for a listing of exempt income items.
