The corporation should file an Alabama income tax return just as any other corporation. If the income is business income, then the corporation’s pro rata share of the partnerships property, payroll, and sales should be included in the apportionment factor. If the income is nonbusiness, then the income should be allocated to Alabama and/or the appropriate states. See Alabama Rule 810-27-1-.02 Application of Apportionment and Allocation.
Organizations referred to in 26 U.S.C. § 501(a), as well as several others organizations referenced in 40-18-32 will not be required to file corporation income tax returns with the Alabama Department of Revenue for as long as they retain their exempt status under applicable Federal and State laws. If they have unrelated business income as determined in accordance with 26 U.S.C. § 512, the organization should file Form 20C with a copy of Federal Form 990T.
To report changes made by the IRS, a corporation must file an amended Form 20C for the specific tax period. The following information MUST be included with the amended return (see Regulation 810-3-40-.01(4)):
If the corporation files as a separate entity:
A complete copy of the revenue agent’s report (RAR) provided by the IRS to include, but not limited to, Form 4549-A, 4549-B and Form 870,
A copy of the Form 20C as originally filed, and
Federal Form 1120 as originally filed and/or amended.
If the corporation is part of a consolidated group, the following information is required along with the above information:
A listing of the IRS adjustments made to each company in the consolidated group,
A copy of the Federal Form 851, Affiliations Schedule,
A copy of the income statement spread for every company, and
A copy of the consolidated Federal 1120 as originally filed and/or amended.
If the IRS audit results in a refund, the request for refund must be made within one year from the date of final determination of the IRS audit. If the audit results in additional tax due, the department can assess the additional tax within one year after the Department has been notified.
For tax years beginning on or after January 1, 2016, Corporate Income Tax began following the federal due dates for corporate returns.
Corporations on a calendar year and a fiscal year, other than June 30, the original due date is the 15th day of the 4th month after the end of the tax year.
Corporations with a fiscal year ending on June 30, the original due date is the 15th day of the 3rd month following the end of its tax year.
Schedule BC. The Alabama Department of Revenue now requires the use of Schedule BC – Business Credits, when claiming business tax credits. The schedule allows the taxpayer to compute the total amount of tax credits allowable. The amounts entered on the Schedule BC will carry over to the Form 20C, page 1. Many credits now must be claimed on the taxpayer’s MAT account in order to receive the credit and the Schedule BC attached to the return. For more information on credits, please visit ADOR’s Tax Incentives page and see instructions for Schedule BC.