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  • Does Alabama allow calculations to determine interest and penalty due to underpayments of estimated tax?

Does Alabama allow calculations to determine interest and penalty due to underpayments of estimated tax?

Yes. The taxpayer must submit Form 2220AL and the Federal Form 2220 with the return (Form 20C) when filed to compute the required payment and penalty. The taxpayer also has the option to compute their required quarterly installments using an approved federal method (annualized or seasonal). The Form 2220AL will not be accepted after the return (Form 20C) has been submitted.

Yes. The taxpayer must submit Form 2220AL and the Federal Form 2220 with the return (Form 20C) when filed to compute the required payment and penalty. The taxpayer also has the option to compute their required quarterly installments using an approved federal method (annualized or seasonal). The Form 2220AL will not be accepted after the return (Form 20C) has been submitted.

Related FAQs in Corporate Income Tax

For tax years beginning January 1, 2001, the tax rate is 6.5%. For tax years prior to 2001, the tax rate was 5%.

For tax years beginning on or after January 1, 2016, Corporate Income Tax began following the federal due dates for corporate returns:

  • For 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.
  • For 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.

 

For tax year beginning on or after January 1, 2022:

Corporations are required to file their income tax return one month following the corresponding federal income tax returns, including applicable extensions, that are required to be filed as provided under federal law. If the due date falls on a Saturday, Sunday, or state holiday, the return will be due the following business day.

The corporation’s full tax liability is due on or by the original due date of the return without the benefit of the additional one-month extension.

 

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 My Alabama Taxes account in order to receive the credit and the Schedule BC attached to the return. For more information on credits, visit ALDOR’s Tax Incentives and see instructions for Schedule BC.

If the payment is $750 or more, payments must be made electronically. For more information, visit ALDOR’s Make A Payment Page or call the EFT unit at 1-877-256-2447 or 334-353-7659.

New taxpayers, who have recently created a corporate income tax account, will receive an Online Filing Information letter. The Online Filing Information letter is for information purposes only and provides the taxpayer with the account number, Sign-on ID, and Access Code which will allow the taxpayer to create an account at My Alabama Taxes.

NOTE: Corporate income tax returns cannot be filed on My Alabama Taxes.

Electronic Payment Options Available:

  • ACH Credit – Taxpayers may remit tax payments by electronic funds transfer (EFT). The taxpayer must be pre-approved by ALDOR. To register, complete and submit Form EFT: EFT Authorization Agreement Form or call the EFT unit at 1-877-256-2447 or 334-353-7659.  For more information on EFT, please go to ALDOR’s Pay by EFT/ACH Page.
  • ACH Debit – Taxpayers making e-payments via ACH Debit must have a Sign On ID and Access Code to login to  My Alabama Taxes. Pre-registration is not necessary to make a payment on an invoice or assessment.

New taxpayers, who have recently registered with the Alabama Secretary of State, will receive an Online Filing Information letter. The Online Filing Information letter is for “information purposes” and provides the taxpayer with a Sign On ID and Access Code which permits access to My Alabama Taxes.

  • Alabama Interactive – ALDOR will accept e-payments for estimated and automatic extension payments through Alabama Interactive. Visit Tax Estimation or Tax Extension .

Payments less than $750 not remitted electronically must be remitted with Form BIT-V. DO NOT MAIL FORM BIT-V IF THE PAYMENT IS REMITTED ELECTRONICALLY. To obtain Form BIT-V visit revenue.alabama.gov.