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Frequently Asked Questions

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How are OTR (over the road) drivers taxed?
How can I check on my individual income tax refund?
How do I amend Form W-2?
How do I change my banking information for electronic filing?
I am a sole proprietor and have opened another business, do I need another withholding tax account number?
I have an active withholding tax account, but currently don’t have any employees. Do I need to file monthly or quarterly returns?
I have hired a sitter or someone to help in my home, am I required to withhold Alabama income tax from their wages?
I overpaid my withholding tax, how should I handle this?
Is withholding required from 1099 Distributions?
I would like to begin filing and paying my withholding taxes electronically, where do I begin?
My business entity type (corporation, LLC, proprietorship, partnership, etc.) changed, but my federal employee identification number remained the same. Do I need a new state withholding tax account number?
My check for withholding tax has not cleared my bank, what should I do?
My employer is not withholding tax or will not provide me with a W2 form. What should I do?
My federal identification number has changed, do I need a new state withholding tax account number?
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?
What are the filing requirements when filing on behalf of an employer or withholding agent.
What are the W-2 form filing requirements?
Why are there 2 penalties on this notice from the Department of Revenue?
Do you have a TTY number for the hearing impaired?
How can I contact the IRS?
How do I change or update my address?
How do I obtain a copy of my return? I don’t see it on My Alabama Taxes
If I am a victim of identity theft, what should I do?
If I have other questions about my Alabama Individual Income Tax Return, who should I contact?
I have questions about a bankruptcy, who should I contact?
I have questions about a garnishment, who should I contact?
Can I apply for an extension to file my return?
Can I file my Alabama Individual Income Tax Return electronically from my home using my personal computer?
Can my Alabama Individual Income Tax Return be filed electronically?
Does Alabama have a simplified or EZ form?
How can I get Alabama tax forms?
How do I file an amended return?
I do not see my tax return on My Alabama Taxes, how do I obtain a copy of my return?
If I am a resident of Alabama, but work in another state or country, am I required to file an Alabama tax return?
If I am not a resident of Alabama, but earned income from Alabama sources, am I required to file an Alabama tax return?
I filed electronically, have you received my return?
I mailed my return, have you received it?
I received a letter stating I needed to verify my return, but I cannot find the link in My Alabama Taxes, what should I do?
MAT says a return is missing for a tax period, but I was not required to file a return that year, what should I do?
What is the address for mailing my return?
When should I file my Alabama Individual Income Tax Return?
Who must file an Alabama Individual Income Tax Return?
How do I find general tax forms?
How do I order forms?
Questions about a bankruptcy
Questions about a garnishment
Have you received my return? I filed it electronically.
Have you received my return? I mailed it.
I received a letter stating I needed to verify my return but I cannot find the link in My Alabama Taxes, What do I do?
MAT says a return is missing for a tax period, but I was not required to file a return that year.
Can I pay my income taxes due with a credit card?
Can I pay my income taxes online?
Can I set up a payment plan?
Does Alabama offer a payment plan option?
How can I view previous estimate payments I have made?
How do I make a payment, can I pay online?
How do I make a payment on My Alabama Taxes (MAT)?
I made a payment in error to the incorrect tax type (estimate, return, billing), tax year or made two-payments. How do I get this corrected or get a refund for my payment in error?
What is the purpose of the new fee?
I received a billing letter or my payment is not showing on my account, but I’ve already made a payment. What should I do?
What kind of fee is this?
How do I obtain a copy of my W2?
How is the fee calculated?
My employer went out of business, or will not give me a W-2 form, what should I do?
How is the fee paid?
What does it mean when the website says that my return is being held for W2 matching?
When is this fee due?
What should I do if my Form W-2 is incorrect?
What employees are included in the Act?
What should I do with an incorrect, torn or damaged refund check?
Does this fee include all contractors?
Where’s my refund because I have not received it yet?
Is there a contract amount?
Who do I call if my refund is taken by another state agency?
Can this fee be paid with my withholding tax return?
Can I deduct childcare expenses on my Alabama Individual Income Tax Return?
Is this fee withheld from the wages of employees?
Does Alabama allow an adjustment for Firefighter’s Insurance premiums?
Are all wages included?
Does Alabama allow an adjustment to a Health Savings Account (HSA) like the IRS?
Will the new fee apply to the wages of employees performing routine maintenance of a commercial or industrial nature at an Alabama jobsite?
How much is the Alabama standard deduction?
Does the fee apply to the wages of employees working on a project who are not directly on site, such as the employees of manufacturers, engineering firms or fabricators?
I am in the military and a legal resident of Alabama, but I do not live in Alabama. Do I have to pay Alabama income tax?
Does the new fee apply to employees leased from an employee staffing or leasing agency?
I am in the military and not a legal resident of Alabama. If my spouse and/or I also have civilian jobs in Alabama, should we report that income to Alabama?
Are there any other exemptions allowed?
If I file using the Married Filing Jointly filing status on my federal return, do I have to file a joint Alabama return?
If I itemize on my federal tax return, do I have to itemize on my state return?
Is the “Head of Family” filing status in Alabama the same as the “Head of Household” filing status for federal purposes?
Should I itemize my deductions, or should I use the standard deduction?
What are the limitations on my IRA deduction?
What expenses are deductible as Adoption Expenses?
What filing status should I claim on my return?
What income is exempt from Alabama income taxation?
What income must I report on my Alabama return?
What interest income is exempt from Alabama taxation?
What is Alabama’s Individual Income Tax Rate?
What is the Alabama First Time and Second Chance Home Buyer Savings Account?
What personal exemptions am I entitled to?
Who qualifies as my dependent?
How can I avoid having my federal income tax refund intercepted for payment of my state tax debt?
How soon will the federal refund that was offset show on my account?
How will I know if my federal tax refund or payment was intercepted to pay a state debt?
I have a payment plan in effect with the Alabama Department of Revenue. Will my federal refund still be offset?
I paid the Alabama Department of Revenue in full, but my federal refund was still offset. What should I do?
My spouse and I filed a joint tax return and our refund was offset for a debt that only my spouse owes. How can I get my portion of the refund back?
What is an offset?
What is the legal authority to take my federal tax refund and apply it to my state debt?
What is the Treasury Offset Program (TOP)?
Whom should I contact regarding the offset?
Whom should I contact regarding the offset of my stimulus payment(s) or Social Security Benefits?
Will the Alabama Department of Revenue charge me any fees if my federal refund is offset to my state income tax debt?
Will the Alabama Department of Revenue notify the U.S. Department of the Treasury’s Bureau of the Fiscal Service-Debt Management of any changes to my balance for payments I make to the Alabama Department of Revenue?
What taxpayers must file an Alabama Business Privilege Tax return?
What entities are not required to file an Alabama Business Privilege Tax return?
When is the Alabama Business Privilege Tax return due?
What address do I use to mail the Alabama Business Privilege Tax return?
Why is the Alabama Business Privilege Tax levied?
Can I file an extension to obtain more time to file an Alabama Business Privilege Tax return?
What is an initial return? When is it due?
Does the Alabama Business Privilege Tax return require any attachments?
How is an amended Alabama Business Privilege Tax return filed?
How can I pay what I owe using EFT?
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?
What is an Electing Family Limited Liability Entity?
Are qualified 529 Saving Plan withdrawals exempt from Alabama income tax?
What is a Determination Period?
What is a non‐qualified withdrawal from an Alabama 529 Savings Plan?
Are credit unions subject to the Business Privilege Tax and or the Corporate Shares Tax levied in Chapter 14A, Code of Alabama 1975?
If I roll my money from a qualified 529 plan into another qualifying Alabama 529 plan, is the money exempt from Alabama taxes?
How does an entity elect to be treated as a “family limited liability entity” and therefore subject to the $500 cap provided for under the privilege tax statute?
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?
How do I file the domestic or foreign Franchise Tax return?
If I roll $7,500 into the Alabama 529 Savings Plan (contributions/basis equals $6,000 and the earnings portion equals $1,500), can I deduct the full $7,500 on my tax return or only the amount I contributed?
How is the rate for the Business Privilege Tax determined?
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?
How is the federal taxable income for S corporations and limited liability entities determined?
How do I know that my ADOR received my tax return?
Does Alabama income tax law recapture previously deducted contributions when withdrawing money from my Alabama 529 Savings Plan for non‐qualified reasons?
What is a limited liability entity?
What if my return is rejected because ADOR already received it?
What are the tax consequences on 529 plans that are purchased outside of Alabama?
Why did I receive a Business Privilege Tax Delinquent Notice?
If the money from my Alabama 529 Savings Plan is used to pay for my son’s expenses at an out of state college, will it be considered taxable?
What do I need to do in response to the Business Privilege Tax Delinquent Notice?
Is the money from my ” Florida 529 Savings Plan” taxable if it is used to pay for my son’s higher education expenses?
What do I need to do if I received this notice in error?
I have received an ID Confirmation Quiz. What do I do now?
Is a contribution to an Alabama 529 Savings Plan with a December 2010 postmark deductible on my 2010 Alabama tax return, or does it have to be received by the plan before December 31st to be deductible on my Alabama tax return?
How do I register for MAT?
What should I do if my SSN is compromised or I suspect that I am a victim of tax-related identity?
How do I change my address on MAT?
How do I make a Payment for Business Privilege Tax?
How do I find Business Privilege Tax Forms on the ADOR website?
How do I obtain a Certificate of Compliance from Alabama Department of Revenue?
What if I was affected by the IRS Get Transcripts breach?
How do I obtain the forms needed to register, withdraw, or dissolve my business through the Office of the Secretary of State?
How do I know if I might be a victim of identity theft?
What kind of tax is this? Sales tax? Real estate transfer tax?
What fees are associated with Office of the Secretary of State?
So the nonresident seller is still required to file an Alabama income tax return, even with the withholding?
How is the amount to be withheld determined?
How do I Withdraw or Dissolve my business?
Are only transactions which result in taxable income to the seller subject to withholding?
Is withholding required when there are several owners, and some of the owners are nonresidents?
If a buyer reasonably relies on a seller’s sworn affidavit of residency, will the buyer be liable if it later turns out that the seller does not meet the conditions of deemed residency?
If the seller is an Alabama resident, must he provide the buyer with a sworn affidavit Form NR-AF1 (or for deemed residency)?
Must a certificate of exemption (Form NR-AF3) be filed when the seller is exempt by law from the withholding requirement?
Can a corporation elect to file a consolidated Alabama corporate income tax return?
Is withholding required on a like-kind exchange of property?
Can a corporation request a waiver of penalties incurred for corporate income taxes?
Is withholding required on a transaction that qualifies as a Section 1031 exchange under the Internal Revenue Code? What if the transaction is a “deferred” Section 1031 exchange?
Does Alabama allow calculations to determine interest and penalty due to underpayments of estimated tax?.
If an Alabama resident relocates to another state and buys another residence, does his Alabama residence cease to be his principal residence for purposes of Alabama law?
Does Alabama have a carry forward provision for net operating losses?
If the seller of the property is an exempt organization, is the sale subject to withholding?
Does Alabama have a contribution deduction limit?
If the seller is an insurance company, is the sale subject to withholding?
Does Alabama have a minimum corporate income tax?
If the seller is a financial institution, is the sale subject to withholding?
Does Alabama permit the carry back of a net operating loss?
Does the withholding required under Code of Alabama 1975, Section 40-18-86, apply to the sale or transfer of timber located in Alabama by a nonresident of Alabama?
Does Alabama provide for a federal income tax deduction?.
If tax is withheld from a nonresident seller who is a partnership, S corporation, or limited liability company, how does the seller claim credit for the withholding?
Does Alabama require quarterly estimated tax payments?
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?
Does our corporation have Nexus in Alabama?.
Can a nonresident seller qualify as a deemed resident in order to be exempt from withholding, if he satisfies some, but not all of the listed conditions?
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?
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?
Is there a filing extension available for corporate income tax returns?
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?
Is there a time limitation to file my corporate income tax return with a request for a refund?
Is a buyer required to inquire as to whether a LLC-seller is a “disregarded” entity?
What are the filing requirements for a corporation operating in Alabama as a partner in a partnership?
If property is transferred to a relocation company, is the relocation company subject to the withholding requirements of Section 40-18-86, Code of Alabama 1975?
What are the filing requirements for an exempt organization operating in Alabama?
Is property that is sold or transferred by a nonresident as part of an installment transaction subject to the withholding requirements of Section 40-18-86, Code of Alabama 1975, and if so, how is withholding on the installment sale handled?
What are the reporting requirements as the result of an IRS audit?.
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?
What is the corporate income tax rate?
What is the due date for filing a corporate income tax return?
What schedule must be filed to report business credits?
When are corporations required to pay electronically?
Where can I find information pertaining to Small Business Health Premiums?
Where can I find more information pertaining to consolidated corporate returns?
Who must file a Corporate Income Tax return (Form 20C)?
What are the recent law changes that affect filing a financial institution excise tax return?
New Taxpayer Registration Information
What is Financial Institution Excise Tax?
Who must file a Financial Institution Excise Tax return? (Form ET-1)
What is the due date for filing a Financial Institution Excise (FIE) Tax return?
Does Alabama allow an extension of time to file?
Does our financial institution have Nexus in Alabama?
How should a multi-state financial institution apportion its income to Alabama?
What types of interest income is taxable?
What steps can be taken to verify that a financial institution is in compliance with Alabama’s filing requirements?
Is there a time limitation to file my financial institution excise tax return with a request for a refund?
Where can I find more information pertaining to consolidated financial institution excise tax returns?
Who may file consolidated returns?
Can an election to file a consolidated return be revoked?
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 current tax rate?
What is the correspondence mailing address for the Financial Institution Excise Tax Section?
What is the mailing address for Form ET-1/ET-1C?
Does Alabama require estimated tax payments for financial institutions?
Does Alabama allow calculations to determine interest and penalty due to underpayments of estimated tax?
How should financial institutions treat NOLs?
Does Alabama provide for a federal income tax deduction?
What taxes are allowed as credits?
How do I claim a business credit?
Are deductions for dividends allowed?
Is interest expense allowed as a deduction?
Is there a limitation on the amount of contributions deductible?
What are the reporting requirements as the result of an IRS audit?
What are the reporting requirements to amend a previously filed return?
When is electronic funds transfer (EFT) filing required?
Does the single sales factor apportionment formula apply to industries whose sales factors are currently calculated in accordance with Rules 810-27-1-.18.02 through 810-27-1-.18.07.
Electronic Payment Options Available
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?
Can a financial institution request a waiver of penalties incurred for excise tax?
If section 7 applies to either my 2018 or 2019 return, should I file an amended return?
Can a non-resident opt out of the composite filing?
Does our partnership have Nexus in Alabama?
If section 8 applies to either my 2018 or 2019 return, should I file an amended return?
How does a preparer know if he or she is required to electronically file a corporate/partnership return next year?
How does a preparer know if he or she is required to electronically file a corporate/partnership return this year?
In situations where our clients do not e-File the federal return, will the state allow the Alabama return to be paper filed?
Is there an Opt-Out provision?
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?
Is there a composite return for partnerships with non-resident members?
What is a QIP (Qualified Investment Partnership)?
What is the mailing address for Form 65?
What is the mailing address for Form PTE-C?
Can a non-resident opt out of the composite filing?.
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 Alabama recognize the federal election to be treated as an S corporation?
Does our corporation have Nexus in Alabama?
How does a Qualified Subchapter S Subsidiary (QSSS) file ?
How does a preparer know if he or she is required to electronically file a corporate/partnership return next year?.
How does a preparer know if he or she is required to electronically file a corporate/partnership return this year?.
In situations where our clients do not e-File the federal return, will the state allow the Alabama return to be paper filed?.
Is there an Opt-Out provision?.
When is a self-prepared corporate or partnership return included in the mandate?.
When is the Corporate/Partnership Income Tax e-file mandate effective?.
Is a separate extension required for Form 20S and Form PTE-C?
What is the mailing address for Form 20S?
When is the composite return due?
When is the S corporation return due?
Are estimate payments required?
Can charitable deductions made by the estate/trust be claimed as a deduction on the Alabama Form 41?
Can composite payments made on behalf of the estate/trust by a partnership be claimed on the Alabama Form 41?
Can I claim the federal estate taxes paid as a deduction on the Alabama Form 41?
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?
If there an Opt-Out provision?
In the final year of an estate or trust can the loss be passed on to the beneficiary?
Is the Alabama Estate Tax Waiver required?
Is the Fiduciary Income Tax Return, Form 41, under the e-file mandate?
What is the mailing address for Form 41?
When is a self-prepared Fiduciary return included in the mandate?
1099-NEC Filing
Are any employees exempt from withholding tax?
Do I need a withholding tax account number?