Alabama allows an Alabama “affiliated group” to elect to file a consolidated Alabama tax return, provided the “group” files a consolidated federal return for the same taxable year. An “Alabama affiliated group” means a group of corporations that constitute an affiliated group as defined in 26 U.S.C. §1504. Alabama consolidated returns can only include Alabama “nexus” companies.
Each corporation included in the Alabama consolidated return must compute their Alabama taxable income on a separate company basis. Then, the taxable income of the Alabama group is combined to determine the tax due.
To make the election, the Alabama Form 20C-CRE must be filed by the due date of the return, including extensions, for the first taxable year for which the election is applicable. The consolidated election is binding for 120 consecutive months (10 years). The consolidated filing fee is a maximum of $25,000 due by the extended due date of the return.