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Frequently Asked Questions

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Are guaranteed payments included in the calculation of taxable income?
Can an Electing Pass-Through Entity exclude income attributable to certain owners, i.e. tax-exempt owners, when calculating tax due? 
How is the federal taxable income for S corporations and limited liability entities determined?
How do you claim credits that do not require pre-certification by an individual income taxpayer?
Who should you contact for assistance with the credit submission process or questions about individual income tax credits?
Is a single-member limited liability company (SMLLC) whose status is disregarded for federal income tax purposes considered to be the seller for purposes of Section 40-18-86, Code of Alabama 1975?
One of the conditions for a nonresident seller to be considered a deemed resident under Section 40-18-86, Code of Alabama 1975, is that the seller has filed Alabama income tax returns, or appropriate extensions, for the two income tax years immediately preceding the year of the sale. What if the sale occurs before the due date for the previous year’s income tax return?
If the seller is a corporation, how does it claim the withholding credit since the corporation income tax return does not have a line for tax withheld?
Are only transactions which result in taxable income to the seller subject to withholding?
So the nonresident seller is still required to file an Alabama income tax return, even with the withholding?
Section 40-18-2, Code of Alabama 1975, imposes a tax on every nonresident individual receiving income from property owned or business transacted in Alabama. Also, Section 40-18-14 states that the taxable income of a nonresident individual includes only income from property owned or business transacted in Alabama. An installment note, held by someone who is not in the business of holding installment notes, derived from the sale of investment real property or rental real property by a nonresident individual, would be intangible property that was acquired as income from property held in this state or as a result of business done in this state. “Business income” is defined in Section 40-27-1, Code of Alabama 1975, as income arising from transactions and activities in the regular course of the taxpayer’s trade or business and includes income from tangible and intangible property if the acquisition, management, and disposition of the property constitute integral parts of the taxpayer’s regular trade of business operations. Accordingly, interest that is attributable to the installment note in this situation is taxable for Alabama purposes. Is the interest from the installment note subject to the withholding requirements of Section 40-18-86, Code of Alabama 1975?
Does Alabama income tax law recapture previously deducted contributions when withdrawing money from my Alabama 529 Savings Plan for non‐qualified reasons?
When rolling over an out of state 529 plan to an Alabama qualifying plan, is the roll over into the Alabama qualifying plan (both the contributions and earnings portion) exempt from any current year Alabama income tax?
Is a rollover from an out‐of‐state qualified 529 plan into another qualifying Alabama 529 plan by an individual that files a joint Alabama State income tax return eligible for an Alabama State income tax deduction of up to a $5,000 or $10,000?
Are qualified 529 Saving Plan withdrawals exempt from Alabama income tax?
I understand that under Alabama Income Tax Law an amount up to $10,000 for taxpayers filing Married filing Joint can be deducted on your Alabama tax return if you contribute to a College Counts Alabama 529 Savings Plan, but does each taxpayer have to write a check for $5,000, or is one check for $10,000 from either spouse acceptable?
Who should you contact for assistance with the credit submission process and/or questions about business income tax credits?
If I am not a resident of Alabama, but earned income from Alabama sources, am I required to file an Alabama tax return?
Most of my business equipment has been fully depreciated on my income tax return; do I still list these items on the personal property return?
Is withholding required from 1099 Distributions?
Is the Fiduciary Income Tax Return, Form 41, under the e-file mandate?
When is a self-prepared Fiduciary return included in the mandate?
1099-NEC Filing
Do I need a withholding tax account number?
I have hired a sitter or someone to help in my home, am I required to withhold Alabama income tax from their wages?
What is the mailing address for Form PTE-C?
I overpaid my withholding tax, how should I handle this?
How does a preparer know if he or she is required to electronically file a corporate/partnership return this year?.
When is a self-prepared corporate or partnership return included in the mandate?.
When is the Corporate/Partnership Income Tax e-file mandate effective?.
We have a Section 125 Cafeteria Plan available to our employees, does the State of Alabama recognize this exclusion from gross income?
We have employees who will be receiving severance pay. Is this income taxable to the recipient?
Are estimate payments required?
Is there a limitation on the amount of contributions deductible?
Since Credit Unions do not have Federal Taxable Income, what should a credit union report on the Form ET-1 line 1 Federal Taxable Income?
How does a preparer know if he or she is required to electronically file a corporate/partnership return next year?
Can the federal income tax paid on federal Form 1041 be claimed as a deduction on the Alabama Form 41?
How does a preparer know if he or she is required to electronically file a Fiduciary return?
When is a self-prepared corporate or partnership return included in the mandate?
When is the Corporate/Partnership Income Tax e-file mandate effective?
How does a partnership file for an extension?
Is a single member LLC required to file a separate Alabama income tax return?
What is the mailing address for Form 65?
Are any employees exempt from withholding tax?
How can I check on my individual income tax refund?
How do I amend Form W-2?
Who may file consolidated returns?
Can a financial institution elect to file a consolidated Alabama Financial Institution Excise Tax Return?
Does Alabama have a minimum financial institution excise income tax?
What is the correspondence mailing address for the Financial Institution Excise Tax Section?
Does Alabama accept consolidated S returns?
Does Alabama accept the federal extension for S corporations?
Does Alabama allow the filing of composite returns for S corporation shareholders?
Does our corporation have Nexus in Alabama?
How do I claim a business credit?
How does a preparer know if he or she is required to electronically file a corporate/partnership return next year?.
What are the filing requirements for a corporation operating in Alabama as a partner in a partnership?
When are corporations required to pay electronically?
What are the reporting requirements as the result of an IRS audit?
Who must file a Corporate Income Tax return (Form 20C)?
Does our partnership have Nexus in Alabama?
Does our financial institution have Nexus in Alabama?
How does a preparer know if he or she is required to electronically file a corporate/partnership return this year?
What is a QIP (Qualified Investment Partnership)?
What types of interest income is taxable?
Where can I find more information pertaining to consolidated financial institution excise tax returns?
What is the current tax rate?
What is the mailing address for Form ET-1/ET-1C?
How should financial institutions treat NOLs?
Does Alabama provide for a federal income tax deduction?
Are deductions for dividends allowed?
Is interest expense allowed as a deduction?
Does the corporation have to file corporate income tax if there is no business activity or never began, but is registered with the Alabama Secretary of State?
What is an Electing Family Limited Liability Entity?
Is there a filing extension available for corporate income tax returns?