Alabama Administrative Code

A deduction is allowed for expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer, his spouse, or a dependent, in accordance with 26 U.S.C. § 213; provided, however, that the limitation of the deduction to the excess…

A deduction for charitable contributions is allowable to the extent allowed for federal income tax purposes under 26 U.S.C. § 170; provided, however, that the contributions base shall be the adjusted gross income as defined in Code of Ala. 1975, § 40-18-14.2, except for any net o…

(Repealed 1/18/00) Authors: Mary L. Gifford, John H. Burgess Notes Ala. Admin. Code r. 810-3-15-.18 Adopted September 30, 1982. Amended: June 17, 1988; filed July 27, 1988. Amended: Filed September 18, 1996; effective October 23, 1996. Repealed: Filed December 14, 1999; effective…

Notes Ala. Admin. Code r. 810-3-15-.19 Adopted September 30, 1982. Amended: June 17, 1988; filed July 27, 1988. Amended: Filed September 18, 1996; effective October 23, 1996. Repealed and New Rule: Filed December 14, 1999; effective January 18, 2000. Repealed by Alabama Administr…

(1) DEFINITIONS. For the purpose of this regulation, the following words, phrases and abbreviations have these meanings: (a) FIT: Federal income tax. Depending on the method used for computing FIT (cash basis or accrual method), deductible federal income tax may include: 1. Feder…

(1) A nonresident is an individual who is a legal resident of another state. (2) The phrase "adjusted gross income from all sources" is comprised of income which would be included in gross income if received by a resident of the State of Alabama in accordance with § 40-18-14, Cod…

(Repealed 1/18/00). Authors: Mary Gifford, Ann Winborne, Income Tax Division. Notes Ala. Admin. Code r. 810-3-15-.22 Adopted September 30, 1982. Amended: June 17, 1988. Amended: February 8, 1989; filed March 20, 1989. Filed May 21, 1992; August 17, 1992. Amended: Filed October 4,…

(Repealed 1/18/00) Author: Mary L. Gifford, Income Tax Division Notes Ala. Admin. Code r. 810-3-15-.23 Filed July 22, 1992; October 30, 1992. Amended: Filed September 18, 1996; effective October 23, 1996. Repealed: Filed December 14, 1999; effective January 18, 2000. Statutory Au…

(1) For tax years beginning on or after January 1, 1991, resident individual taxpayers may include as an adjustment to income, reasonable medical and legal expenses paid or incurred by the taxpayer in connection with the adoption of a minor. (2) "Medical expenses" shall include a…

(1) In computing adjusted gross income under § 40-18-15, Code of Ala. 1975, the following shall be allowed as a deduction: (a) The amount of aid of assistance, whether in the form of property, services or monies, provided to the State Industrial Development Authority pursuant to …

(1) Effective for taxable years beginning after December 31, 1997, the amount of premiums paid for qualified long-term care insurance coverage is deductible as an itemized deduction. (2) For tax years beginning on or after January 1, 1995, and ending December 31, 1997, individual…

(1) Definitions: (a) Qualifying Plans. Alabama college education plans as defined in Chapter 33C of Title 16, to include: 1. The Alabama Prepaid Affordable College Tuition Program (PACT), or 2. the Alabama College Education Savings Program. (b) Nonqualified Withdrawal. A nonquali…

(1) The basis upon which depreciation and depletion shall be computed is the adjusted basis for determining gain on the sale or disposition of the property (including any taxes required to be capitalized in connection with the acquisition of a capital asset), as determined under …

(1) All expenditure in excess of net receipts from minerals sold shall be charged to capital account recoverable through depletion while the mine is in the development stage. The mine will be considered to have passed from a development to a producing status when the major portio…

(1) (a) For tax years beginning before January 1, 1990, to qualify as an Alabama S corporation, the criteria to be met for each year of the election are - 1. a valid election must be in effect under I.R.C. § 1362, and 2. all nonresident shareholders who hold any stock interest in…

(1) Nonseparately Stated Income. Nonseparately stated income for Alabama S corporations will be computed in the same manner as for individuals, except for those deductions and exemptions which are not applicable to nonindividuals, such as: (a) The personal exemption and credit fo…

(1) Definitions. For purposes of this regulation, the following definitions shall apply: (a) "LIFO recapture amount" means the excess of the inventory's value using the FIFO method over its value using the LIFO method.1. For purposes of subparagraph (a), the inventory value means…

(1) (a) For taxpayers who are shareholders of an Alabama S corporation with a tax year which began before January 1, 1990, each shareholder of an Alabama S corporation shall include in his individual Alabama income tax return each year his pro rata share of the: 1. separately sta…

(1) A related individual (as defined in subsection (2) below) who furnishes capital and/or provides services for an Alabama S corporation without receiving reasonable compensation for the capital and/or services, will be deemed to have received income from the Alabama S corporati…

(1) Basis Adjustments - Shareholder's Stock in an Alabama S Corporation. (a) The shareholder's basis in the Alabama S Corporation stock is increased by: 1. Any separately stated income attributed to Alabama as computed under § 40-18-162(a)(1), Code of Ala. 1975, to the extent inc…

(1) Treatment of Property Distributions. An actual distribution of property (not the prorata share taken into account under § 40-18-162, Code of Ala. 1975) by an Alabama S Corporation in accordance with the provisions of § 40-18-36, will be treated in the following manner: (a) If…

01Alabama Accumulated Adjustments Account. (1) The Alabama Accumulated Adjustments Account.(a) The Alabama Accumulated Adjustments Account (AAAA) is an account maintained for an Alabama S corporation which details the amounts of earnings, profits, losses, gains and deductions whi…

Notes Ala. Admin. Code r. 810-3-167-.01 Adopted November 13, 1985. Amended: Filed March 26, 1998; effective April 30, 1998. Amended: Filed March 31, 2000, effective May 5, 2000. Repealed by Alabama Administrative Monthly Volume XL, Issue No. 12, September 30, 2022, eff. 11/14/202…

(1) No net operating loss carryback or carryforward deduction is allowable for an Alabama S corporation. See Rule 810-3-161-.01 and 810-3-35.1-.01. (2) No carryforward and no carryback shall arise at the corporate level for a taxable year for which a corporation is an Alabama S c…

(1) Except as provided below, no adjustments will be made to the earnings and profits account of an Alabama S corporation. An Alabama S corporation will have no earnings and profits accruing during any period in which such an election is in effect. (2) In the case of a redemption…

(1) Costs and expenses which are not deductible for income tax purposes include, but are not limited to: (a) Personal, living, and family expenses such as:1. Premiums paid for life insurance by the insured. 2. Cost of insuring a dwelling owned and occupied by the taxpayer as a pe…

(Repealed 5/5/00) Author: John H. Burgess Notes Ala. Admin. Code r. 810-3-170-.01 Adopted November 13, 1985. Repealed: Filed March 31, 2000; effective May 5, 2000. Statutory Authority: Code of Ala. 1975, § 40-18-170.

(1) The "post-termination transition period" is: (a) The period that begins on the day following the last day of the last S year, and ending on the later of: 1. One year from the last day of the S year, or 2. The due date, including extensions, for filing the return for the last …

(1) The "post-termination transition period" is: (a) The period that begins on the day following the last day of the last S year, and ending on the later of: 1. One year from the last day of the S year, or 2. The due date, including extensions, for filing the return for the last …

The Alabama law regarding S corporations is substantially similar to federal law regarding S corporations. Therefore, rules and regulations of the Internal Revenue Service interpreting federal S corporation law will be given due consideration in interpreting Alabama S corporation…

(Repealed 5/5/00) Author: John H. Burgess, Income Tax Division Notes Ala. Admin. Code r. 810-3-174-.01 Adopted November 13, 1985. Repealed: Filed March 31, 2000; effective May 5, 2000. Statutory Authority: Code of Ala. 1975, §15, Act 84-756.

(1) For purposes of this rule, the following definitions shall apply: (a) "Net unrealized built-in gain" means the excess of the fair market value of the S corporation's assets when it first became an S corporation over the aggregate adjusted basis of those assets at the same tim…

(1) Definitions - (a) "Passive investment income" means gross receipts from royalties, rents, dividends, interest (excluding installment sales to customers and income of lending and financing companies), annuities, and sales or exchanges of stock or securities to the extent of an…

(1) Definitions: (a) A "composite return" means an information return similar to the federal Schedule K-l which contains information concerning one or more nonresident shareholder's distributive share of income, deductions, and losses. (b) A "composite payment" means a payment of…

(1) Income received from retirement systems that is totally exempt from Alabama income tax is as follows: (a) Retirement allowances, pensions, annuities, or optional allowances paid by the Alabama Teachers' Retirement System, the Alabama Judicial Retirement System, and the Alabam…

(1) (a) General Rule - Resident or Part-year Resident Taxpayers. A single person, or a married person not filing a tax return with their spouse, is entitled to a personal exemption of fifteen hundred dollars ($1,500.00). A head of a family or a married couple filing a joint retur…

(1) Income realized in conducting a business subject to the excise tax on financial institutions imposed by § 40-16-1, et seq., and where such excise tax is paid, is excluded from gross income under the provisions of Chapter 18 of Title 40. (2) Salaries paid by businesses subject…

(1) Payments made to a retiree or his designated beneficiary under a "defined benefit plan," as defined by IRC §414(j), as amended from time to time, are exempt from Alabama income tax for an individual resident taxpayer, to the extent such payment would be taxable for federal in…

(1) Individuals domiciled within Alabama (residents) are taxable on their entire income, whether earned within or without Alabama, subject to certain exclusions and exemptions as provided under Alabama income tax law, regardless of their physical presence within Alabama at any ti…

(1) Corporations, associations, or joint-stock companies subject to tax only in the state of Alabama are taxable on income from all sources, both inside and outside the state of Alabama. Corporations, associations, or joint-stock companies subject to tax in multiple states, shall…

(1) Every individual or corporation acting in a fiduciary capacity, receiving income from sources within the State of Alabama, is subject to the Alabama income tax with respect to such income. For definitions of resident individuals and resident corporations, see Rules 810-3-2-.0…

(Repealed). Author: Rebecca S. Whisenant Statutory Authority: Code of Ala. 1975, § 40-18-20. History: Adopted September 30, 1982. Amended: filed June 17, 1988; filed July 27, 1988; May 15, 1992. Repealed: Filed September 15, 1998; effective October 20, 1998. Notes Ala. Admin. Cod…

Notes Ala. Admin. Code r. 810-3-200-.01

Notes Ala. Admin. Code r. 810-3-200-.02

Notes Ala. Admin. Code r. 810-3-200-.03

Notes Ala. Admin. Code r. 810-3-200-.04

Notes Ala. Admin. Code r. 810-3-200-.05

Notes Ala. Admin. Code r. 810-3-200-.06

Notes Ala. Admin. Code r. 810-3-200-.07

Notes Ala. Admin. Code r. 810-3-200-.08