If you are an employer with employees working in the state of Alabama, you will need to register with the Department of Revenue for a withholding tax account number. If you are an Alabama employer with Alabama residents working outside the state of Alabama, you will need to withhold Alabama income tax on those residents unless you are withholding tax for the state in which the employee is working in. For more information on this issue, please see page 2 of the Withholding Tax Tables and Instructions for Employers at www.revenue.alabama.gov. To obtain a withholding tax account number, employers must file Form COM:101 (Combined Registration Application Change Form) available online.

My employer is not withholding tax or will not provide me with a W2 form. What should I do?

Contact the Withholding Tax Section at (334) 242-1300 or your local Taxpayer Service Center. Taxpayer Service Center information can be obtained at www.revenue.alabama.gov/servcenters. Please include the following information: employer’s name, address, phone number and number of employees.

I overpaid my withholding tax, how should I handle this?

You can apply for a refund on Form IT:RE-2WH which is available from the Department. Copies of this form are not acceptable. Refunds generally take anywhere from 6-8 weeks. If you prefer to take a credit, complete line 5 on your next withholding tax return. The report on which a credit is claimed must be accompanied by a brief explanation of where the overpayment occurred in order for the Department to verify the overpayment. Please see the coupon book for further instructions. Any return showing credit without proper documentation will be denied the credit.

How do I amend Form W-2?

I would like to begin filing my withholding taxes via EFT, where do I begin?

Contact the EFT Unit at (334) 242-0192 (select option 7) or register online at www.revenue.alabama.gov/eft/eftindex.html. You may also file your return electronically. You may register for electronic filing at www.revenue.alabama.gov/withholding/efiling.html.

I have an active withholding tax account, but currently don’t have any employees. Do I need to file monthly or quarterly returns?

You will need to file a zero quarterly return in order to avoid receiving a delinquent notice for failure to file. You will not need to file a zero monthly report. If you do not plan on hiring any employees in the near future, you may file Form A-7 from your coupon book to place the account on inactive status. This will eliminate the need to file the zero returns. You may reactivate the account at a later time by calling the Withholding Tax Section at (334) 242-1300.

How can I check on my individual income tax refund?

If you have questions concerning your individual income tax refund, call the Refund Hotline at (334) 353-2540 or visit our Online Refund Status page for more information. The Withholding Tax Section does not handle individual income tax.

My check for withholding tax has not cleared my bank, what should I do?

The Withholding Tax Section handles a large volume of checks. The only way to know if a check has been received is when the check has cleared your bank. If you use the preprinted coupon book provided by the Department, your check will be processed immediately. All other forms must be checked for accuracy and take longer to process.

We have a Section 125 Cafeteria Plan available to our employees, does the State of Alabama recognize this exclusion from gross income?

The State of Alabama recognizes the following Federal Code Sections: Section 125 Cafeteria Plan, Section 401K, and Section 403B. For information on other exclusion from gross income, please see page 1 of the Withholding Tax Tables and Instructions for Employers.

I have hired a sitter or someone to help in my home, am I required to withhold Alabama income tax from their wages?

Domestic help in the home is exempt from the withholding tax regulations. Also exempt from withholding tax are merchant seaman, duly ordained ministers, and agricultural employees. For more information on these classes of exemption, please see page 1 of the Withholding Tax Tables and Instructions for Employers.

My federal identification number has changed, do I need a new state withholding tax account number?

If your federal identification number changes, you will need to apply for a new state withholding tax account number by using Form COM:101.

I am a sole proprietor and have opened another business, do I need another withholding tax account number?

As a sole proprietor you do not need to apply for another withholding tax number for opening another business unless that business is operating under a different federal identification number than the sole proprietor. A sole proprietor will file all his business withholding under one state number.

Why are there 2 penalties on this notice from the Department of Revenue?

One penalty is for the late filing of the withholding tax return and the other penalty is for late payment of the withholding tax. Please see the billing code explanation enclosed with your letter.

Also, if you paid a 10% penalty with your return and are being billed another 10% penalty, see the instructions in your coupon book regarding late filing.

How are OTR (over the road) drivers taxed?

Truck drivers that operate in two or more states will fall under the jurisdiction of the Amtrak Reauthorization Act (Public Law 101-322) and will be taxed on their state of residency.

We have employees who will be receiving severance pay. Is this income taxable to the recipient?

Severance pay exemption of up to $25,000.00 is available upon approval from the Department. Call (334) 242-1066 for more information on severance pay.

How do I change my banking information for electronic filing?

An electronic check will appear when a return is filed electronically that shows an amount of tax due. The banking information can be changed by entering the new banking information over the current banking information on the electronic check.