Yes, Alabama allows resident individuals to claim a tax credit for income taxes imposed by other states. This credit is claimed on Form 40, Schedule CR. A copy of the other state’s return and a copy of the state Schedule K-1 should be included as documentation of this credit.

If the individual does not file an individual income tax return in the other state or the state provides an exclusion of income, include a proforma return calculating the tax at the other state’s rate and a copy of the state Schedule K-1 as documentation of this credit.

Note: Any Pass-Through Entity tax deducted on the Pass-Through Entity’s federal return, which reduces the taxable income reported on the owner’s K-1, should be added back to compute Alabama taxable income.

Individual taxpayers needing assistance with the credit claim process or who have questions about available tax credits should call the Individual Income Tax Audit and Appeals Division at 334-353-9770.

Individuals that have a My Alabama Taxes account should complete the following steps:

• Log in to using your user ID and password.
• Scroll to the Individual Income Tax portion of the page and select “Submit a Credit Claim” located in the Tax Incentives box.
• Enter the information requested for the credit claim: Credit Type, Filing Period, Credit Amount, and upload attachments (include documentation received to verify the authorization of the credit). Select “Next.”
• Review the information entered in Step 4. Select “Previous” to edit the information or select “Submit” to send the credit claim through for review.

Individuals that do not have a My Alabama Taxes account and are unable to create one should complete the following steps:

• Go to the My Alabama Taxes homepage (www.myalabamataxes.alabama.gov).
• Scroll to the “Individuals” box and click “Submit an Individual Credit Claim.”
• Enter the requested taxpayer information: full legal name, Social Security number, email address, and contact number. Select “Next.”
• Enter the requested information for the credit claim: Credit Type, Filing Period, Credit Amount Requested, and upload attachments (include documentation received to verify the authorization of the credit). Select “Previous” to return to Step 3 to edit the information or “Next” to review the credit claim.
• Review the information entered in Step 4. Select “Previous” to edit the information or select “Submit” to send the credit claim through for review.

If the credit is from a Schedule K-1 issued by a pass through entity, the credit claim will be submitted by the pass-through entity, and no action is required by the individual. The credit claim must be submitted by the entity and approved by the Alabama Department of Revenue before the credit will be allowed on an individual’s income tax return. The pre-certification process must be completed by each entity that was allocated a credit until the credit is allocated to the individual claiming the credit. Additional information about credit pre-certification for pass-through entities can be found at https://revenue.alabama.gov/tax-incentives/.

These credits will be subject to an approval process when the tax return is filed claiming the credit. The following are credits that do not require pre-certification by an individual income taxpayer through My Alabama Taxes:

• Alabama Adoption Tax Credit
• Credit for Transferring from Failing Public School to Nonfailing Public or Nonpublic School
• Alabama Accountability Act Credit – Scholarship Granting Organization (SGO) portion*
• Investment Credit (Alabama Jobs Act)**
• Port Credit
• Credit for Taxes Paid to Other States
• Dual Enrollment Credit
• Growing Alabama Credit***
• Innovating Alabama Credit***
• Rural Physician Credit
• Alabama Enterprise Zone Act Credit
• Credit for Taxes Paid to a Foreign Country
• Income Tax Capital Credit

*Alabama Accountability Act Credit – Scholarship Granting Organization (SGO) portion - The process for reserving a donation to an SGO remains unchanged. Only pass-through entity filers are required to complete the new pre-certification process in My Alabama Taxes for donations made to an SGO when the Alabama Accountability Act Credit is passed through to its members.

**Investment Credit (Alabama Jobs Act) – The approval of this credit is managed through the Department of Commerce. Once the Department of Commerce has approved the annual certification, ALDOR will notify the investing company to complete an allocation schedule through My Alabama Taxes. See https://revenue.alabama.gov/tax-incentives/.

***Growing Alabama Credit and Innovating Alabama Credit – The process for reserving a donation to an EDO remains unchanged.

All credits that require pre-certification must be submitted through My Alabama Taxes. Individual filers can remit the necessary information through their individual income tax account in My Alabama Taxes, or by selecting the “Submit a Credit Claim” option from the “Other links” menu in My Alabama Taxes. The credits that require pre-certification by individual income tax filers are:

• Coal Credit
• Full Employment Act of 2011
• Veterans Employment Act – Employer Credit
• Veterans Employment Act – Business Start-up Expenses Credit
• Qualified Irrigation/Reservoir System Credit
• 2013 Alabama Historic Rehabilitation Tax Credit
• Apprenticeship Tax Credit
• 2017 Alabama Historic Rehabilitation Tax Credit
• Railroad Modernization Act of 2019
• Storm Shelter Credit
• Volunteer Emergency Responders Tax Credit
• Neighborhood Infrastructure Incentive Plan Credit*
• Alabama Film Rebate

*The Neighborhood Infrastructure Incentive Plan Credit – This credit expired in 2015. However, there may be some individual income tax filers that still qualify to claim this credit since there is a 10-year period over which the credit can be claimed.

Ex-spouses remain individually liable on a final assessment entered on a joint tax return, even if the parties have mutually agreed that only one of the parties will be responsible for payment. Such decisions are not binding on the Alabama Department of Revenue.

Follow the instructions at the bottom of the most recent billing letter you receive from the Collection Services Division. If you have any questions, contact a Revenue Compliance Officer by calling 334-353-8096. Checks or money orders should be made payable to the Alabama Department of Revenue. Always write your assessment number and account number on the check. When using a social security number, mask the number using the following format: XXX-XX-1234.

Mail your payment to the following address:
Alabama Department of Revenue
Collection Services Division
P. O. Box 327820
Montgomery, AL 36132-7820

To make payments and view your account online, visit My Alabama Taxes.

Need to visit in-person? Click here to locate your nearest Taxpayer Service Center location and make an appointment.

Any company signed up to use My Alabama Taxes with a Master Web Login should submit garnishment answers and/or payment online directly through the My Alabama Taxes website.

Identity theft occurs when someone obtains your personal information - such as your social security number, credit card or bank account numbers, passwords, etc. to defraud or commit crimes. You might be a victim of identity theft if:

• Someone else has filed a tax return in your name;
• You have an overdue balance or collection action from a year you did not file a tax return;
• You find confirmed IRS records of wages from an employer you never worked for.

IDENTITY THEFT PREVENTION TIPS:

Taxes. Security. Together.

The Security Summit launched an awareness campaign www.irs.gov/individuals/taxes-security-together to better inform you about the need to protect your personal, tax and financial data online and at home. People continue to fall prey to clever cybercriminals who trick them into giving up Social Security numbers, account numbers or password information. In turn, criminals use this information a variety of ways, including filing fraudulent tax returns.

Protect Yourself from Identity Theft

Identity thieves have many ways to obtain your personal information. However, there are a number of precautions you can take to minimize your risk. This video provides five tips you can use to protect yourself against identity theft and fraud.

Other Resources

• Identity Theft.gov (Federal Trade Commission)
• Recovering from Identity Theft (Federal Trade Commission)
• IRS Identity Protection Tips (IRS)
• Protecting Your Investment (Social Security Administration)
• Identity Protection: Prevention, Detection and Victim Assistance (IRS)
• FTC: Tax-Related Identity Theft (Federal Trade Commission)

If you were affected by the IRS Get Transcripts breach, please know that we have taken internal steps within our system, noting that you were affected by the IRS Get Transcripts data breach. You will automatically be notified when ALDOR receives a tax return that has been filed using your Social Security number, alerting you to the possibility that criminals have your information and are using it to steal money from you and the state. You will be sent a verification code and will be asked to verify whether or not you filed a return by going to My Alabama Taxes and clicking on the "Verify My Return" link.

• Respond immediately to any notice received from ALDOR; follow the notice instructions or call the number provided.
• If you have not received a notice, contact our Compliance Unit at 334-353-9770.
• Complete Form INV ID1 - Identity Theft Affidavit and mail to the address on the form.
• Continue to pay your taxes and file your tax return, even if you must do so by paper. Include with the paper return: the Identity Theft Affidavit; a copy of your picture ID (driver's license or non-driver's ID); and one additional form of identification, such as a utility bill or bank statement.

Once your return is accepted by ALDOR, you may be asked to complete a five-minute ID Confirmation Quiz. The ID Confirmation Quiz is part of an effort designed to protect your identity and your tax refund. Once you have completed the quiz and your identity has been confirmed, ALDOR will continue processing your tax return. Those taxpayers asked to take the quiz will receive notification by mail sent to the address on the return. The notification will include specific instructions for completing the quiz.

Tax-related identity theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. Generally, a criminal will use your SSN to file a false return early in the year. You may be unaware you are a victim until you receive a notice from ALDOR or try to file your taxes and learn one already has been filed using your SSN.

If you have registered at My Alabama Taxes and have access to your Individual Income Tax account, you can opt-in to a service that will notify you when ALDOR receives Individual Income Tax returns that have been filed using your Social Security number. This service can help alert you to the possibility that criminals have your information and are using it to steal money from you and the state. You can opt-in by logging into your My Alabama Taxes account and following the link "Notify Me of Filed Returns."

My Alabama Taxes is the convenient and secure way to access a variety of ALDOR's online services. In My Alabama Taxes you can quickly and easily file tax returns, make payments, view letters, manage your accounts, and conduct other common transactions with ALDOR.

Yes. The Alabama Department of Revenue will send updated account information to TOP each Tuesday night.

There are four different filing statuses available under Alabama law:

Single
Married Filing a Joint Return
Married Filing a Separate Return
Head of Family
Explanation of the filing statuses

State and federal law authorizes the Alabama Department of Revenue to enter into agreements with the Internal Revenue Service (IRS) and the Department of the Bureau of the Fiscal Service-Debt Management to intercept or offset federal tax refunds and federal payments for Alabama state income tax debts.

For a list of income exempt from Alabama Income Tax, go to: Listing of exempt income items

If you have questions about the Treasury Offset Program (TOP) or the notice you received from the U.S. Department of the Bureau of the Fiscal Service-Debt Management, contact the U.S. Treasury Offset Program (TOP) Call Center at 1-800-304-3107. Many state and federal agencies offset debts through TOP. The notice you received from the Department of the Bureau of the Fiscal Service-Debt Management will outline the name of the state agency (or agencies) that requested the offset of your federal income tax refund, along with contact information for those agencies. A letter is sent for each offset.

All income is subject to Alabama income tax unless specifically exempted by state law. For examples of taxable income go to: Listing of taxable income

The Alabama Department of Revenue did not offset the first or second Economic Impact (Stimulus) Payment for unpaid debts. The Economic Impact (Stimulus) Payment were approved and distributed by the U.S. Treasury. Alabama cannot legally offset social security benefits; however, the IRS does offset a percentage for unpaid federal taxes. Please contact the IRS at 1-800-829-1040.

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. The Alabama Department of Revenue does not charge a fee. However, the U.S. Department of the Bureau of the Fiscal Service-Debt Management charges a fee ($22.58) to offset federal tax refunds to pay tax debts. Bureau of Fiscal Service-Debt Management will deduct that fee before sending the funds to the Alabama Department of Revenue.

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