Title 40

Repealed by Act 2006-503, p. 1145, §2, effective for tax years beginning after December 31, 2005. (Acts 1990, No. 90-387 p. 529.)

Repealed by Act 2006-503, p. 1145, §2, effective for tax years beginning after December 31, 2005. (Acts 1992, No. 92-605, §1.)

Repealed by Act 2006-503, p. 1145, §2, effective for tax years beginning after December 31, 2005. (Acts 1997, No. 97-631, p. 1145, §1.)

Repealed by Act 2006-503, p. 1145, §2, effective for tax years beginning after December 31, 2005. (Act 2001-465, p. 619, §1.)

Repealed by Act 2006-503, p. 1145, §2, effective for tax years beginning after December 31, 2005. (Act 2003-341, p. 850, §1.)

(a) Each Alabama state individual income tax return form for the 2009 tax year and each year thereafter shall contain a designation as follows: “Alabama Military Support Foundation, Incorporated. “Check ( ) if you wish to designate $1, $5, $10, or more of your state income tax re…

(a) Each Alabama state individual income tax return form for the 2010 tax year and each year thereafter shall contain a designation as follows: “Alabama Firefighters Annuity and Benefit Fund. “Check ( ) if you wish to designate $2 or more of your state income tax refund. “If join…

(a) Each Alabama state individual income tax return form for the 2012 tax year and each year thereafter shall contain a designation which allows each individual taxpayer to designate a contribution to the Alabama Veterinary Medical Foundation for the Spay-Neuter Program. (b) The …

(a) A minimum annual contribution of two dollars ($2) may be voluntarily contributed to the Alabama Association of Rescue Squads on the income tax return of the contributor by indicating on a check-off box which shall be provided. The check-off shall be described as the “Alabama …

(a) An Alabama S corporation shall not be subject to the tax imposed by Section 40-18-31. (b) For purposes of this chapter, an “Alabama S corporation” is a corporation: (1) With respect to which an election under 26 U.S.C. §1362 is in effect; or (2)a. With respect to which there …

(a) The taxable income of an Alabama S corporation shall be determined in the same manner as in the case of an individual except that the items determined in subdivision (1), subsection (a) of Section 40-18-162 shall be separately stated, and the following deductions shall not be…

(a) In determining the tax of a shareholder for the shareholder’s taxable year in which the taxable year of the Alabama S corporation ends, or for the final taxable year of a shareholder who dies or of a trust or estate that terminates before the end of the corporation’s taxable …

If an individual who is the spouse or lineal descendant or ancestor of one or more shareholders of an Alabama S corporation or who is a spouse, a lineal descendant or ancestor of a beneficiary of a trust which is a shareholder of an Alabama S corporation renders services for the …

(a) The basis of each shareholder’s stock in an Alabama S corporation shall be increased for any period by the sum of the following items determined with respect to that shareholder for the period: (1) The items of income described in subdivision (1) of subsection (a) of Section …

(a) A distribution of property made by an Alabama S corporation with respect to its stock to which, but for this article, Section 40-18-36 would apply shall be treated in the manner provided in subsection (b) or (c) of this section, whichever applies. (b) In the case of a distrib…

(a)(1) Except as provided in subsection (b), for purposes of this article, the term “accumulated adjustments account” means an account of the Alabama S corporation which is adjusted for the S period in a manner similar to the adjustments under Section 40-18-164 hereof including s…

Except to the extent inconsistent with this article, the rules of Article 1 of this chapter shall apply to an Alabama S corporation and its shareholders. (Code 1975, §40-14-97; Acts 1984, 1st Ex. Sess., No. 84-756, p. 121, §8; Acts 1997, No. 97-625, p. 1048, §3.)

No carryforward and no carryback arising for a taxable year for which a corporation is not an Alabama S corporation may be carried to a taxable year which such corporation is an Alabama S corporation. No carryforward and no carryback shall arise at the corporate level for a taxab…

(a) Except as provided in subsections (b) and (c) of this section, no adjustment shall be made to the earnings and profits of an Alabama S corporation. (b) In the case of any transaction involving redemption, liquidation, reorganization or division of any Alabama S corporation, p…

For purposes of applying the provisions of this chapter which relate to employee fringe benefits, the Alabama S corporation shall be treated as a partnership, and any two-percent shareholder of the Alabama S corporation shall be treated as a partner of such partnership. The term …

(a) For purposes of this article, except as provided in subsection (b), each shareholder’s pro rata share of any item for any taxable year shall be the sum of the amounts determined with respect to the shareholder by assigning an equal portion of the item to each day of the taxab…

(a) For purposes of this article, the term “post-termination transition period” means: (1) The period beginning on the day after the last day of the corporation’s last taxable year as an Alabama S corporation and ending on the later of: a. The day which is one year after the last…

Due consideration shall be given in the interpretation of this article to applicable sections of the U.S. Internal Revenue Code in effect from time to time, its rulings and regulations provided such Code, rulings, and regulations are not in direct conflict with any portion of thi…

(a) If for any taxable year beginning in the recognition period an Alabama S corporation has a net recognized built-in gain, there is hereby imposed a tax (computed under subsection (b)) on the income of such corporation for such taxable year. (b)(1) The amount of the tax imposed…

(a) If for the taxable year an Alabama S corporation has accumulated earnings and profits at the close of the taxable year derived from years during which the corporation was an Alabama C corporation, and gross receipts more than 25 percent of which are passive investment income,…

(a) The Department of Revenue shall permit an Alabama S corporation to file composite returns and to make composite payments on behalf of some or all of its nonresident shareholders if there are one or more nonresident shareholders during any part of the taxable year. The Departm…

(a) For the tax years beginning on and after January 1, 1995, every person that is doing business in Alabama, as a producer of coal mined in Alabama, shall be allowed a coal production credit to be used as provided in subsection (b) in the amount of one dollar ($1) per ton of inc…

The Department of Revenue shall promulgate and issue rules and regulations to implement and administer this article. (Acts 1995, No. 95-239, p. 403, §2.)

(b) The repealing of the incentives in subsection (a) shall only affect the availability of the tax credits after December 31, 2028, and shall not cause a reduction or suspension of any credits awarded on or prior to December 31, 2028. (Act 2023-546, §§4, 11.)

This article shall be known as the Reemployment Act of 2010. (Act 2010-557, p. 1132, §1.)

(a) An Alabama income tax deduction is established for employers that create new jobs for unemployed persons. The deduction shall equal 50 percent of the gross wages paid to each person hired by an employer who, at the time of such employment, was drawing unemployment compensatio…

The Department of Revenue shall have the authority to adopt such rules as necessary to carry out this article. (Act 2010-557, p. 1132, §3.)

(a) The Reemployment Act of 2010, Article 10, commencing with Section 40-18-270, Chapter 18, of Title 40, is repealed effective December 31, 2028, unless extended by an act of the Legislature prior to that date for no more than five additional years.(b) The repealing of the incen…

This article may be cited as the Full Employment Act of 2011. (Act 2011-551, p. 1017, §1.)

For purposes of this article, a small business is defined as a business that employs 50 or fewer employees on the effective date of this act. (Act 2011-551, p. 1017, §2.)

The Legislature finds and determines, in accordance with its goal, shared by Governor Robert Bentley, of achieving statistical full employment for Alabama’s citizens, that the Legislature intends to foster an optimal environment for job growth throughout the state. (Act 2011-551,…

(a) An Alabama income and financial institution excise tax credit is hereby established for small businesses that create new jobs paying more than ten dollars ($10) per hour. The credit shall equal one thousand dollars ($1,000) and shall be available in the tax year during which …

(a) The Full Employment Act of 2011, Article 11, commencing with Section 40-18-290, Chapter 18, of Title 40, is repealed effective December 31, 2028, unless extended by an act of the Legislature prior to that date for no more than five additional years.(b) The repealing of the in…

As used in this article, the following terms shall have the following meanings: (1) CATASTROPHE SAVINGS ACCOUNT. A regular savings account or money market account established by an insurance policyholder who is a state income taxpayer for residential property in this state to cov…

(a) An individual taxpayer is allowed a deduction against income earned for state income tax purposes imposed pursuant to Section 40-18-5 for amounts contributed to a catastrophe savings account in accordance with subsection (c), and all interest income earned by a catastrophe sa…

(a) A distribution from a catastrophe savings account must be included in the income of the taxpayer unless the amount of the distribution is used to cover qualified catastrophe expenses. (b) No amount is included in income, pursuant to subsection (a), if the qualified catastroph…

The Department of Revenue may promulgate rules necessary to implement and administer this article. (Act 2012-413, p. 1123, §4.)

This article shall be known and may be cited as the Veterans Employment Act. (Act 2012-168, p. 254, §1; Act 2018-194, §1.)

As used in this article, the following terms have the following meanings: (1) COMBAT VETERAN. A member of the Armed Forces of the United States who served in a United States Department of Defense designated combat zone and was a resident of the State of Alabama at the time of his…

In addition to the tax credit allowed for in the Full Employment Act of 2011 or the Alabama Small Business and Agribusiness Jobs Act, an additional one thousand dollar ($1,000) tax credit is available to a business that meets the requirements for a tax credit under Section 40-18-…

For all tax years beginning on or after January 1, 2018, a qualified employer subject to the requirements of this article and Sections 40-18-290 through 40-18-293 shall be eligible for an additional nonrefundable credit against the income tax liability imposed or the state portio…