40 Booklet TY 2023_12-21-23

Form

Booklet

 Long Return

 Residents and Part-Year Residents

 Forms and Instructions

2023

revenue.alabama.gov

myalabamataxes.alabama.gov

Index

Address Change … 17

Addresses of Taxpayer Service

Centers … 3

Adoption Expenses … 16

Alabama Election Campaign Fund … 11

Alimony or Separate Maintenance

Amount paid … 16

Amount received … 12

Amended Return … 18

Amount You Owe … 11

Annuities … 14

Armed Forces, Members of … 5

Business Income or (Loss)

(Federal Schedule C and C-EZ) … 12

Business Use of Home … 21

Casualty and Theft Losses … 20

Consumer Use Tax … 10

Contributions to Charity … 19

Corresponding With Alabama

Department of Revenue … 12 and 17

Death of Taxpayer … 18

Dependents … 8 and 10

Direct Deposit … 17

Dividend Income … 8 and 21

Domicile … 4

Donation of Refunds … 12 and 22

Educational Expenses … 21

Educational IRA … 13

Employee Business Expenses … 20

Estates and Trusts … 24

Estimated Tax … 11 and 18

Extension of Time to File … 18

Farm Income and Expenses … 15

Federal Tax Deduction … 8 and 31

Figuring Your Income Tax … 10, 25-30

Filing Requirements —

When To File … 5

Which Form To File … 5

Who Must File … 5

Filing Status … 6

First-Time and Second Chance Home Buyer Savings

Account ...

Forms, How To Get … 33

Gains … 13 and 23

General Information … 17

Head of Family … 6

Income (Examples) —

You Must Report … 7

You Do Not Report … 7

Income Tax Withheld (Alabama) … 8 and 11

Income Tax Deduction (Federal) … 8 and 31

Interest Income … 8 and 21

Interest — Late Payment of Tax … 17

Interest — Penalty on Early

Withdrawal of Savings … 16

Individual Retirement

Arrangement (IRA) … 13, 14 and 15

Itemized Deductions … 8, 18-21

Keogh Plan — Deduction for … 14 and 15

Long Term Care … 21

Losses … 12, 13, and 23

Married Persons — Filing Joint or

Separate Return … 6

Medical and Dental Expenses … 18 and 19

Military Personnel —

Residents of Alabama … 5

Nonresidents of Alabama … 5

Moving Expenses … 16

Miscellaneous Itemized Deductions … 20 and 21

Mutual Funds … 23

Name and Address … 6

Nonresidents of Alabama —

Which Form To File … 5

Who Must File … 5

Other Income … 8 and 12

Part-year residents … 5

Partnerships … 23

Payments —

Check/Money Order … 11

Credit Card… 11

ACH Debit (E-Check) … 12

Penalty —

Criminal Liability … 17

Late Filing … 17

Late Payment of Tax … 17

Other Penalties … 17

Pensions … 14 and 15

Personal Exemption … 6 and 8

Preparer, Tax Return … 12

Records — How Long To Keep … 17

Refund Status… 4

Refund, When Should I Receive? … 4

Rents and Royalties … 23

Requesting a Copy of Your

Tax Return … 18

Rollover Distributions … 14

Roth IRA … 13

Rounding Off to Whole Dollars … 7

Salaries … 7

Schedules A, B, CR, DC, D, and E

Instructions… 18-24

SEP … 13, 14, and 15

Setoff Debt Collection … 4 and 18

Sign Your Return … 12

Single Person … 6

Social Security Number … 6

Standard Deduction … 8 and 9

Steps For Preparing Your Return … 6

Students and Dependents … 5

Tax Assistance for Taxpayers … 3

Tax Tables … 25-30

Wages … 7

Where To File Form 40 … 12

Page 2

What’s New For 2023

Identity Quiz – If you happen to receive a notice to complete an ID Confirmation

Quiz, it is not because you are suspected of ID theft. The purpose of the quiz is to pro-

tect your identity as the filer and prevent loss of taxpayer dollars to thieves.

Credits – Certain tax credits are now required to be pre-approved through My Ala-

bama Taxes (MAT) at www.myalabamataxes.alabama.gov. Please see the credit in-

structions in this booklet and Schedule OC instructions for more information.

Schedule RS – Complete Schedule RS to report fully or partially taxable pensions,

annuities, IRA distributions (include SEP, Keogh, 401(k)(2), 403(b) distributions), other

distributions and retirement distributions exempt from Alabama Income.

Retirement Exemption - Act 2022-294 Effective Jan 1, 2023, exempts the first

$6,000 of taxable retirement income for those 65 years of age or older. See Schedule

RS Instructions for more information.

Volunteer Emergency Responders Tax Credit - Act 2022-298 Effective Jan 1,

2023, provides an income tax credit for volunteer firefighters and paramedics provid-

ing proof of 30 hours or more of qualifying training during the tax year. See Schedule

OC for more information.

Innovate Alabama Tax Credit - Act 2023-33 Effective Jan 1, 2023, authorizes a

tax credit to taxpayers making a cash contribution to economic development organi-

zations (EDO) approved by Innovate Alabama. See Schedule OC for more information.

Adoption Credit - Act 2022-299 effective Jan 1, 2023, increases the adoption

credit to $2,000 provided both the qualifying children and parents are residents of Ala-

bama.

Negative numbers - Please enter all negative numbers with negative signs (-).

Do not use parenthesis ( ).

★

Shoals

Tuscaloosa

Jefferson/

Shelby

Montgomery

Mobile

Huntsville

Gadsden

Auburn/Opelika

Dothan

Page 3

Physical Addresses of Taxpayer Service Centers

Alabama income tax assistance may be obtained by calling or visiting any of the Alabama Department of Revenue Taxpayer Service Centers listed below. Additional forms

and instructions may also be obtained from these centers.

 Auburn/Opelika Taxpayer Service Center

1800 Samford Trace Court, Suite 100

Auburn, AL 36830

Phone – (334) 887-9549

 Dothan Taxpayer Service Center

121 Adris Place

Dothan, AL 36303

Phone – (334) 793-5803

 Gadsden Taxpayer Service Center

701 Forrest Avenue

Gadsden, AL 35901

Phone – (256) 547-0554

 Huntsville Taxpayer Service Center

4920 Corporate Drive, Suite H

Huntsville, AL 35805

Phone – (256) 837-2319

 Jefferson/Shelby Taxpayer Service Center

2020 Valleydale Road, Suite 208

Hoover, AL 35244

Phone – (205) 733-2740

 Mobile Taxpayer Service Center

851 E. I-65 Service Road South, Bel Air Tower, Suite 100

Mobile, AL 36606

Phone – (251) 344-4737

 Montgomery Taxpayer Service Center

2545 Taylor Road

Montgomery, AL 36117

Phone – (334) 242-2677

 Shoals Taxpayer Service Center

201 South Court Street, Suite 200

Florence, AL 35630

Phone – (256) 383-4631

 Tuscaloosa Taxpayer Service Center

1434 22nd Avenue

Tuscaloosa, AL 35401

Phone – (205) 759-2571

When Should I Expect

My Refund?

Wait At Least 90 Days

For Your Refund

If you do not receive your refund within 90 days of

mailing your return, go to www.revenue.alabama.gov

then click on “Where’s My Refund,” or complete Form

IT:489. Form IT:489 may be obtained from the Depart-

ment’s website under the Forms link or from any of our

Alabama Taxpayer Service Centers listed on page 3 of

this booklet. If you call about your refund, have a copy of

your return with you or the Department may be unable to

assist you.

Each year the Ala bama Depart ment of Rev e nue re-

ceives over 1.8 million income tax re turns. Of this num-

ber, over 1 million taxpayers receive refunds. The

Depart ment makes every effort to process your refund

as quickly as possible, and there are several things you,

the taxpayer, can do to help us accomplish this.

The date you file your return and how you file deter-

mines when you can expect your refund. For example,

electronically filed returns are received and processed

significantly faster than returns that are mailed to the De-

partment of Revenue. Also, if you mail in an error-free re-

turn in January or February, you can expect to receive

your refund sooner than if you wait until March or April to

file. Returns filed this close to the deadline may require

90 days to process.

Common Mistakes

Which Delay Refunds

Incorrect Name. Your refund will be issued in the

name(s) appearing on your return. If your name is illeg-

ible or misspelled, your refund may be issued in the

wrong name.

Incorrect Address. Last year the U.S. Postal Serv-

ice was unable to deliver thousands of refunds due to

incorrect addresses, or because the taxpayer moved and

failed to leave a forwarding address.

Incorrect Social Security Number. Last year ap-

proximately 80,000 returns were received with missing or

incorrect social security numbers. Your social security

number is very important; it is used for identification of

your file. Please compare the number on your return with

the number on your social security card.

Show in the blocks provided the social security num-

bers in the same order as the first names. For example,

the social security number of the first name listed should

be entered in the box headed “Your social security num-

ber.” The social security number of the second name

should be entered in the box headed “Spouse’s social

security number.” If separate returns are filed, the person

filing the return should enter his or her social security

number in the box headed “Your social security num-

ber,” and enter the spouse’s social security number on

line 3. It is very important that the social security num-

bers be listed in this order so your refund will be issued

in the correct name.

Legibility. On many returns, the name, address, or

social security number is not readable. If this happens,

the wrong information may be recorded, and your refund

check may be delayed. Make sure that the information

you enter on the return is readable.

Missing Withholding Statement (W-2). Make cer-

tain the “State Copy” of all forms W-2 wage and tax

statements are included, W-2s are frequently missing.

The Department will consider the return incomplete if all

required information is not included.

Incorrect Computation. Many returns must be cor-

rected each year by the Department due to simple math

errors. Before mailing your return, double check the ad-

dition and subtraction to make sure the math is correct.

This is a good idea even if someone else prepares your

return.

Misdirected Mailing. Each year thousands of re-

turns are mailed to the Internal Revenue Service instead

of the Alabama Department of Revenue.

Filing More Than One Return. File only one Form

40, 40A, 40EZ, 40NR or electronic return for each tax

year. If it is necessary to amend your original return, you

must file a completed return with the “Amended Return”

box checked. The amended return will be processed

after your original return has been processed.

Filing Copies. A copy of a return is not acceptable

unless it has the taxpayer(s) original signature(s).

Missing Signatures. Thousands of unsigned re-

turns are received each year by the Department. Before

we can process them, these returns must be returned to

the taxpayers for signatures. If a joint return is filed, both

spouses must sign the return.

Other Reasons

For Refund Delays

You Have Not Paid All Taxes Due From a Previ-

ous Year. If you owe tax for a prior year, your refund will

be applied to pay that deficiency. Any amount remaining

will be refunded to you. This will generally delay your re-

fund 12 weeks or more.

Setoff Debt Collection. If the Alabama Department

of Human Resources, the Alabama Department of

Labor, the Administrative Office of Courts, the Alabama

Medicaid Agency, Alabama League of Municipalities, or

Association of County Commissions of Alabama has no-

tified the Alabama Department of Revenue that your ac-

count is delinquent on a debt repayment, any public

assistance program (including the Child Support Act of

1979, Chapter 10, Title 38), any Medicaid assistance

program, or Local Government Entity your refund will be

applied to that debt. Note: See Setoff Debt Collection on

page 18 for further information.

Federal Refund Offset Program. Your 2023 federal

or state refund will be taken to satisfy any outstanding li-

abilities owed to the State of Alabama or to the Internal

Revenue Service.

SECTION

Filing

1Information

First, be certain you need to file a tax return. Your

marital status, filing status, and gross income determine

whether you have to file a tax return. Gross income usu-

ally means money, goods, and property you received on

which you must pay tax. It does not include nontaxable

benefits. See page 7 of the instructions to find out which

types of income you should include.

Other Filing Requirements

Refunds. Even if your gross income was less than

the amounts shown, you must file a return to get a refund

if Alabama income tax was withheld from any amounts

paid to you.

Domicile. Individuals who are domiciled in (or resi-

dents of) Alabama are subject to tax on their entire in-

come whether earned within or without Alabama. This is

true regardless of their physical presence within Ala-

bama at any time during the taxable year. Domicile is

where one lives, has a permanent home, and has the in-

tention of returning when absent. Domicile may be by

birth, choice, or operation of law. Each person has one

and only one domicile which, once established, contin-

ues until a new one is established coupled with the aban-

donment of the old. Burden of proof regarding change

of domicile is on the taxpayer even though he/she owns

no property, earns no income, and has no place of

abode in Alabama.

If an Alabama resident accepts employment in a for-

eign country for a definite or indefinite period of time with

the intent of returning to the United States, the individual

remains an Alabama resident and all income, wherever

earned, is subject to Alabama income tax. This is true

even if the taxpayer leaves no property in Alabama.

If a citizen of a foreign country comes to Alabama to

work (no matter how long he stays), buys a home, se-

cures an Alabama driver’s license, does not intend to

apply for U.S. Citizenship, and intends to ultimately re-

How To Use This

Instruction Booklet

The instructions for Form 40 are divided into five

main sections.

 Section 1 contains information on who must

file, how to choose the correct form, and when to

file a return.

 Section 2 contains useful steps to help you

prepare your return.

 Section 3 contains specific instructions for

most of the lines on your return.

 Section 4 contains general information

about such items as amending your tax return, how

long to keep records, and filing a return for a de-

ceased person.

 Section 5 contains instructions for complet-

ing Schedule A for those taxpayers itemizing their

deductions. Also included are instructions for

Schedules B, CR, DC, D, and E.

If you follow the steps in Section 2 and the spe-

cific instructions in Section 3, you should be able to

fill in your return quickly and accurately.

Page 4

Refund Status

To check the status of your current year refund, go to our Website at www.revenue.alabama.gov,

then click on “Where’s My Refund,” or call our 24-hour toll-free Refund Hotline at 1-855-894-7391.

turn to the country of origin, the individual will be con-

sidered to have established domicile in Alabama. In

other words, a foreign citizen domiciled in Alabama is li-

able for Alabama income tax on income earned from all

sources.

Military Personnel (Residents). Military personnel,

whose legal residence is Alabama, are subject to Ala-

bama income tax on all income regardless of the source

or where earned unless specifically exempt by Alabama

law.

Military personnel (Army, Navy, Marine, Air Force,

Merchant Marine, and Coast Guard) who were residents

of Alabama upon entering military service remain resi-

dents of Alabama for income tax purposes, regardless of

the period of absence or actual place of residence, until

proof as to change of home of record has been made.

The burden of proof is on the taxpayer though he owns

no property, earns no income, or has no place of abode

in Alabama. Under the provisions of the Soldiers’ and

Sailors’ Civil Relief Act, military personnel are not

deemed to have lost their permanent residence in any

state solely because they are absent in compliance with

military orders. In addition, persons are not deemed to

have acquired permanent residence in another state

when they are required to be absent from their home

state by virtue of military orders. If the husband and wife

are both in military service, each could be a resident of

a different state under the Soldiers’ and Sailors’ Civil Re-

lief Act. A spouse not in military service has the same

domicile as the military spouse unless proven otherwise.

Military Personnel (Nonresidents). Nonresi dent

military personnel merely having a duty station within

Alabama (whose legal residence is not Alabama) are not

required to file an Alabama income tax return unless they

have earned income from Alabama sources other than

military pay. If they have earned income in Alabama

other than military pay, they are required to file Alabama

Form 40NR. A married nonresident military person with

income earned in Alabama may file either a separate re-

turn claiming himself or herself only, or a joint return

claiming the total allowable personal exemption. The

“Military Spouses Residency Relief Act” (Public Law 111-

97) states that the income for services performed by the

spouse of a service member shall not be deemed to be

income for services performed or from sources within a

tax jurisdiction of the United States if the spouse is not

a resident of the jurisdiction in which the income is

earned because the spouse is in the jurisdiction solely to

be with the service member serving in compliance with

military orders.

Dependent’s and Student’s Income. Dependents

who are residents of Alabama must file a return if they

meet the requirements under You Must File A Return

If… on this page. A student’s income is fully taxable to

the same extent as other individuals who are required to

file a return. The dependent or student can claim a per-

sonal exemption of $1,500, and his or her parents may

claim a dependent exemption if they provided more than

50% of his or her total support. See Dependent Ex-

emption on page 8.

When To File

You should file as soon as you can after January 1,

2024, but no later than the due date of the federal re-

turn. If you file late, you will have to pay penalties and in-

terest. (See Penalties and Interest on page 17.)

If you know you cannot file your return by the due

date, you do not need to file for an extension. You will

automatically be granted an extension until October 15,

2024. If you anticipate that you will owe additional tax on

your return, you should submit your payment with a pay-

ment voucher (Form 40V) with the box “Automatic Ex-

tension Payment” checked by the due date of the federal

return.

Except in cases where taxpayers are abroad, no ex-

tension will be granted for more than 6 months.

An extension means only that you will not be as-

sessed a penalty for filing your return after the due date.

Interest on the additional tax due from the due date of the

return and any penalties will be assessed if applicable to

your return.

Original returns must be filed within two years of the

date the taxes are paid to be eligible for a refund. Crim-

inal Liability could result from a continued failure to file

returns. (Refer to “Criminal Liability” on Page 17.)

Which Form To File

You MAY Use Form 40A If You Meet

ALL The Following Conditions:

 You were a resident of Alabama for the entire

year,

 You do not itemize deductions,

 You do not claim any adjustments to income,

such as an IRA deduction, alimony paid, Federal income

tax paid for a prior year, etc.,

 You do not have income from sources other than

salaries and wages except for interest and dividend in-

come which cannot exceed $1,500,

 You are not claiming income or loss from Sched-

ules C, D, E, or F, and

 You are not claiming credit for taxes paid to an-

other state.

You MUST Use Form 40 If:

 You were a full or part-year resident of Alabama

and do not meet ALL of the requirements to file Form

40A, and

 You are itemizing deductions.

Part-Year Residents

Part-year residents of Alabama should only report in-

come earned while a resident of Alabama. Itemized de-

ductions must be prorated to reflect only those expenses

incurred while a resident of Alabama. Federal Tax Lia-

bility must be prorated by applying a percentage of Ala-

bama adjusted gross income to Federal adjusted gross

income in order to calculate the amount deductible on

line 12 of Form 40. Part-year residents are allowed to

deduct the full standard deduction, personal, and de-

pendent exemptions.

You MUST Use Form 40NR If:

 You are not a resident of Alabama and you re-

ceived taxable income from Alabama sources or for per-

forming services within Alabama and your gross income

from Alabama source exceeds the allowable prorated

personal exemption, or filing Married Filing Joint under

the “Military Spouses Residency Relief Act.” Nonresi-

dents must prorate the personal exemption. If your Ala-

bama gross income exceeds the prorated amount, a

return must be filed.

You MUST Use Both Form 40 and

Form 40NR If:

 You had sufficient income to require the filing of

a part-year return and also had income from Alabama

sources while a nonresident during the same tax year. In

this case, both the total personal exemption and the de-

pendent exemption must be claimed on the part-year

resident return. No exemption can be claimed on the

nonresident return. The part year resident return should

include only income and deductions during the period of

residency, and the nonresident return should include

only income and deductions during the period of non -

residency.

Page 5

You Must File A Return If…

You were a: and your marital status at the end of 2023 was: and your filing status is: and your gross income was at least:

Single (including divorced and legally separated)

Single $ 4,500

Full Year Head of family $ 8,200

Resident Married and living with your spouse at the end Married, joint return $11,500

of 2023 (or on the date your spouse died) Married, separate return $ 5,750

Single (including divorced and legally separated)

Single $ 4,500 (while an Alabama resident)

Part Year Head of family $ 8,200 (while an Alabama resident)

Resident Married and living with your spouse at the end Married, joint return $11,500 (while an Alabama resident)

of 2023 (or on the date your spouse died) Married, separate return $ 5,750 (while an Alabama resident)

Single (including divorced and legally separated) Single or head of family

Over the allowable prorated exemption:

Nonresident Married and living with your spouse at the end Married, joint return

of 2023 (or on the date your spouse died) Married, separate return

SECTION

Steps for Preparing

2Your Return

By following these four useful steps, and reading the

specific instructions, you should be able to prepare your

return quickly and accurately.

Step 1

Collect all your necessary records.

Income Records. These include any Forms W-2,

W-2G, and 1099 that you have. If you do not receive a

Form W-2 by February 1, or if the one you receive is in-

correct, please contact your employer as soon as pos-

sible. Only your employer can give you a Form W-2, and

only he or she can correct it.

If you have someone prepare your return for you,

make sure that person has all your income and expense

records so he or she can fill in your return correctly. Re-

member, if someone else prepares your return incor-

rectly — you are still responsible.

Step 2

Obtain any forms or

schedules you may need.

The fastest way to obtain forms is to download

them from our website www.revenue.

alabama.gov.

Also see page 33 for more information.

Step 3

Sign and date your return.

Form 40, 40A, or 40NR is not considered a return

unless you sign it. Please sign the return in black

ink only. Your spouse must also sign if it is a joint return.

Original signatures are required or the return will not be

accepted.

Step 4

Attach all necessary

forms and schedules.

Attach the state copy of all Forms W-2, W-2G, and

1099 to the front of your return. Attach schedules and

forms in sequential order, starting with Form 40.

If you need more space on forms or schedules, at-

tach separate sheets and use the same format as printed

forms, but show your totals on the printed forms. Please

use sheets that are the same size as the forms and

schedules. Be sure to put your name and social security

number on these separate sheets and attach them at the

end of the return.

Before mailing your return, check to make sure you

have retained an exact copy for your records. If you owe

tax, be sure to include your payment and Form 40V with

your return.

SECTION

Specific

3Instructions

Name and Address

Please type or print your name, address, and social

security number in the appropriate blocks.

If you live in an apartment, please include your apart-

ment number in the address. If the post office delivers

mail to your P.O. box number rather than to your street

address, write the P.O. box number instead of your

street address.

Social Security Number

Each year thousands of taxpayers file returns using

an incorrect social security number. Usually this number

belongs to another taxpayer. It is very important that you

file your return using the correct social security number.

Failure to use your correct social security number(s) in

the space(s) provided WILL DELAY the processing of

your refund. Listed below are a few of the common rea-

sons why a social security number is reported

incorrectly:

 failed to enter number on return,

 memorized wrong number,

 copied number wrong,

 gave an incorrect number to the tax preparer, or

 gave your employer an incorrect number.

IMPORTANT: Check your W-2 forms. Your employer

may be reporting an incorrect number for you.

If you are married and filing a joint return, write both

social security numbers in the blocks provided.

If you are married and filing separate Alabama re-

turns, write your spouse’s social security number on line

If your spouse is a nonresident alien, has no income,

does not have a social security number, and you file a

separate return, check the "NRA" box and leave the

block for your spouse's social security number blank. If

you and your spouse file a joint return, your spouse must

have a social security number.

If you or your spouse do not have a social security

number, please get Form SS-5 from a Social Security

Administration (SSA) office. File it with your local SSA

office early enough to get your number before April 15.

IMPORTANT: Please notify the Social Security Admin-

istration (SSA) immediately in the event you have

changed your name because of marriage, divorce, etc.,

so the name on your tax return is the same as the name

the SSA has on record. This helps prevent delays in pro-

cessing your return.

Filing Status and Personal

Exemption Lines 1 through 4

You should check only the box that describes your fil-

ing status. The personal exemption will be determined by

your filing status on the last day of the tax year.

Single

Consider yourself single if on December 31, 2023,

you were unmarried or separated from your spouse ei-

ther by divorce or separate maintenance decree.

If you check box 1, enter $1,500 on line 13.

Married – Joint or Separate Returns?

Joint Returns. Most married couples pay less tax if

they file a joint return. If you file a joint return, you must

report all income, exemptions, deductions, and cred-

its for you and your spouse. Both of you must sign

the return even if only one of you had income. Common

law marriages entered into before January 1, 2017, are

recognized by the State of Alabama for income tax

purposes.

CAUTION: You cannot file a joint return if you are a res-

ident of Alabama and your spouse is a resident of an-

other state. You should file as “married filing separate.”

You and your spouse can file a joint return if you

were living together on December 31, 2023, even if you

did not live together for the entire year. Both of you are

responsible for any tax due on a joint return, so if one of

you does not pay the other may have to.

NOTE: If you file a joint return, you may not, after the

due date of the return, choose to file separate returns

for that year.

If your spouse died in 2023, you can file a joint return

for 2023. You can also file a joint return if your spouse

died in 2024 before filing a 2023 return. For details on how

to file a joint return, see Death of Taxpayer on page 18.

If you check box 2, enter $3,000 on line 13.

Separate Returns. You can file separate returns if

both you and your spouse had income, or if only one of

you had income.

If you file a separate return, report only your own in-

come, exemptions, deductions, and credits. You are re-

sponsible only for the tax due on your return.

NOTE: Alabama is not a community property state.

If you file a separate return, write your spouse’s so-

cial security number on line 3. If your spouse is not re-

quired to file, attach a statement explaining why.

If you check box 3, enter $1,500 on line 13.

Head of Family

An individual shall be considered “Head of Family”

if, and only if, such individual is not married at the close

of their tax year, is not a surviving spouse and their qual-

ifying dependent is not a foster child.

You may check the box on line 4 ONLY IF on De-

cember 31, 2023, you were unmarried or legally sepa-

rated and meet either test 1 or 2 below.

Test 1. You paid more than half the cost of keeping

up a home for the entire year provided that the home

was the main home of your parent whom you can claim

as a dependent. Your parent did not have to live with

you in your home,

Test 2. You paid more than half the cost of keeping

up a home in which you lived and in which one of the fol-

lowing also lived for more than 6 months of the year

(temporary absences, such as for vacation or school, are

counted as time lived in the home):

a. Your unmarried child, grandchild, great-grand-

child, etc., adopted child, or stepchild. This child does

not have to be your dependent.

b. Your married child, grandchild, great-grandchild,

etc., adopted child, or stepchild. This child must be your

dependent. But if your married child’s other parent claims

him or her as a dependent under the Federal rules for

Page 6

“Children of Divorced or Separated Parents,” this child

does not have to be your dependent.

c. Any relative whom you can claim as a dependent.

(See definition of dependent on page 8.)

If the person for whom you kept up a home was born

or died during the year, you may still file as “Head of

Family” if the home was that person’s main home for the

part of the year he or she was alive.

Special Rules

A nonresident taxpayer who receives income from

Alabama sources or for performing services within Ala-

bama and who also had income while a resident of Ala-

bama during the same tax year must file both the

Alabama Nonresident Form 40NR and the Alabama

Part-year resident Form 40. If you are required to file

both returns, the total personal exemption and the

dependent exemption must be claimed on the part-

year return (Form 40). No personal exemption or de-

pendent exemption can then be claimed on the

nonresident return (Form 40NR).

Income

All income is subject to Alabama income tax unless

specifically exempted by state law. The term “income”

includes, but is not limited to, salaries, wages, commis-

sions, income from business or professions, alimony,

rents, royalties, interest, dividends, and profits from sales

of real estate, stocks, or bonds. Military pay is taxable

income except for compensation received for active

service in a designated combat zone.

Examples of Income

You MUST Report

The following kinds of income should be reported on

Forms 40, 40A, or 40NR and related forms and

schedules:

 Wages including salaries, fringe benefits,

bonuses, commissions, fees, and tips.

 Dividends (Schedule B).

 Interest on: bank deposits, bonds, notes, federal

income tax refunds, mortgages on which you receive

payments, accounts with savings and loan associations,

mutual savings banks, credit unions, etc. (Schedule B).

 Original Issue Discount (Schedule B).

 Distributions from an Individual Retirement

Arrangement (IRA) including SEPs and DECs, if you ex-

cluded these amounts in a prior year.

 Bartering income (fair market value of goods or

services you received in return for your services).

 Business expense reimbursements you received

that are more than you spent for the expenses.

 Amounts received in place of wages from acci-

dent and health plans (including sick pay and disability

pensions) if your employer paid for the policy.

 Alimony or separate maintenance payments re-

ceived from and deductible by your spouse or former

spouse.

 Life insurance proceeds from a policy you cashed

if the proceeds are more than the premium you paid.

 Profits from businesses and professions (Federal

Schedule C or C-EZ).

 Your share of profits from partnerships and S

Corporations (Schedule E).

 Profits from farming (Federal Schedule F).

 Pensions and annuities other than those listed in

“Examples of Income You DO NOT Report.”

 Lump-sum distributions, endowments.

 Gains from the sale or exchange (including

barter) of real estate, securities, coins, gold, silver, gems,

or other property (Schedule D).

 Gains from the sale of your personal residence

as reported on your Federal return.

 Rents and Royalties (Schedule E).

 Your share of estate or trust income (Schedule

E).

 Prizes and awards (contests, lotteries, and gam-

bling winnings).

 Income from sources outside the United States.

 Director’s fees.

 Fees received as an executor or administrator of

an estate.

 Embezzled or other illegal income.

 Refunds of federal income tax if deducted in a

prior year and resulted in a tax benefit.

 Payments received as a member of a military

service are taxable except for combat pay and certain

allowances.

 Property transferred in conjunction with perform-

ance of services.

 Jury duty pay.

 Nonqualified Withdrawal from Alabama College

Counts 529 Fund.

Examples of Income

You DO NOT Report

Do not include these amounts when deciding if you

must file a return.

 United States Retirement System benefits.

 State of Alabama Teachers’ Retirement System

benefits.

 State of Alabama Employees’ Retirement System

benefits.

 State of Alabama Judicial Retirement System

benefits.

 Military retirement pay.

 Tennessee Valley Authority Pension System

benefits.

 United States Government Retirement Fund

benefits.

 Payments from a “Defined Benefit Retirement

Plan” in accordance with IRC 414(j). Contact your re-

tirement plan administrator to determine if your plan

qualifies.

 Federal Railroad Retirement benefits.

 Federal Social Security benefits.

 State income tax refunds.

 Unemployment compensation.

 Welfare benefits.

 Disability retirement payments (and other bene-

fits) paid by the Veteran’s Administration.

 Workman’s compensation benefits, insurance

damages, etc., for injury or sickness.

 Child support.

 Gifts, money, or other property you inherit or that

was willed to you.

 Dividends on veteran’s life insurance.

 Life insurance proceeds received because of a

person’s death.

 Interest on obligations of the State of Alabama or

any county, city, or municipality of Alabama.

 Interest on obligations of the United States or any

of its possessions.

 Amounts you received from insurance because

you lost the use of your home due to fire or other casu-

alty to the extent the amounts were more than the cost

of your normal expenses while living in your home. (You

must report as income reimbursements for normal living

expenses.)

 Military allowances paid to active duty military,

National Guard, and active reserves for quarters, sub-

sistence, uniforms, and travel.

 Subsistence allowance received by law enforce-

ment and corrections officers of the State of Alabama.

 All retirement compensation received by an eligi-

ble fire fighter or a designated beneficiary from any Ala-

bama firefighting agency.

 All retirement compensation received by an eligi-

ble peace officer or a designated beneficiary from any

Alabama police retirement system.

 Death benefits received by a designated benefi-

ciary of a peace officer or fireman killed in the line of

duty.

 Income earned while serving as a foreign mis-

sionary after first serving 24 months as a missionary in

a foreign country.

 Compensation received from the United States

for active service as a member of the Armed Forces in

a combat zone designated by the President of the United

States.

 An amount up to $50,000 for Tax Years 2020 and

forward and $25,000 for Tax Years 2019 and prior re-

ceived as severance, unemployment compensation or

termination pay, or as income from a supplemental in-

come plan, or both, by an employee who, as a result of

administrative downsizing, is terminated, laid-off, fired,

or displaced from his or her employment, shall be ex-

empt from state income tax. If the exempt severance

pay is included in your state wages, contact your

employer for a corrected W-2.

 Beginning January 1, 1998, all benefits received

from Alabama Prepaid Affordable College Tuition Con-

tracts (PACT).

 Qualified Withdrawal from Alabama College

Counts 529 fund.

 Income received from the Department of Defense

as a result of a member of the military killed in action in

a designated combat zone.

 Any income earned by the spouse in the year of

death of a member of the Military who has been killed in

action in a designated combat zone.

 Beginning January 1, 2016, all income, interest,

dividends, gains or benefits of any kind received from an

ABLE (Achieving Better Life Experience) savings

account.

 Effective with tax year 2020, insurance benefits

received by a certified firefighter as a result of a cancer

diagnosis to any extent the amounts are included in the

federal adjusted gross income of the taxpayer and are

not exempt under any other law. For more information

please see Act 2019-361.

Rounding Off to Whole Dollars

Round off cents to the nearest whole dollar on your

return and schedules. You can drop amounts under 50

cents. Increase amounts from 50 to 99 cents to the next

dollar. For example: $1.39 becomes $1.00, and $2.69

becomes $3.00.

Line 5

Wages, Salaries, Tips, Etc.

Report all W-2 information on Schedule W-2. See

Schedule W-2 instructions for more information. On col-

umn B – “Income,” enter the amount from Schedule W-

2, Line 18, Column I plus Column J.

NOTE: If you are a resident of Alabama and you earn

wages in more than one state, include the total “State

Wages” from all states.

Page 7

NOTE: State of Alabama employees will find that the

amount taxable for state purposes is, in most cases,

more than the amount taxable for federal purposes. This

is due to the fact that amounts deducted from their

wages as “Contributions to the Alabama State Retire-

ment System” qualify for deferral on the Federal return,

but do not qualify for deferral on the Alabama return.

Part-year Residents. If you were a resident of Ala-

bama for only a part of the year, enter only the income

earned during the period of residence in Alabama.

Statutory Employees. If you were a statutory em-

ployee, the “Statutory Employee” box of your W-2 form

should be checked. Statutory employees include full time

life insurance salespeople, certain agent or commission

drivers, traveling salespeople, and certain homework-

ers.

Please see the Schedule W-2 instructions for infor-

mation on how to report your “Statutory Employee”

wages.

Alabama Income Tax Withheld

Alabama tax withheld information must be re-

ported on Schedule W-2. (See Schedule W-2 instruc-

tions for more information.) The amount withheld is

shown on the state copy of your Form W-2. This copy

should be marked “To Be Filed With Your Alabama In-

come Tax Return.”

NOTE: Do not change or alter the amount of tax with-

held or wages reported on your Form W-2. If any amount

is incorrect or illegible, you should contact your employer

and request a corrected statement.

Do not include the following as Alabama income tax:

 Federal income tax,

 FICA tax (Social Security and Medicare),

 Local, city, or occupational tax, or

 Taxes paid to another state.

In Column A – “Alabama tax withheld,” enter the total

amount from Schedule W-2, Line 18, Column G.

Line 6

Interest and Dividend Income

Enter your TOTAL taxable income from interest and

dividends. If the total taxable and nontaxable interest and

dividends you received in 2023 is $1,500 or more, you

must complete and attach Schedule B. Part-year resi-

dents enter only the amount of interest and dividend in-

come earned during the period of residency.

The payer should send you a Form 1099-INT, Form

1099-OID, or 1099-DIV, if applicable, showing interest

or dividends you must report.

To see what interest and dividends are taxable, read

the instructions for Schedule B in this booklet.

Line 7

Other Income

All taxable income you received that is not reported

on lines 5 and 6 should be entered on line 7. This in-

cludes rents, royalties, gains from sale of property, items

not included in “State wages” box on W-2 forms, etc.

See Examples of Income You DO NOT Report and

Examples of Income You MUST Report on page 7 of

these instructions for further details on income which

should be included on this line.

If you have income from other sources, you must

complete page 2, Part I, and attach the appropriate

schedule(s).

Line 9

Adjustments to Income

If you made payments to a traditional Individual Re-

tirement Arrangement (IRA) or to a Keogh plan, you may

be entitled to claim these payments as an adjustment to

income.

Also deductible as an adjustment to income are

penalties you incurred for the early withdrawal of interest

before maturity.

You can deduct payments of alimony or separate

maintenance made under a court decree to the same

extent allowed for federal income tax purposes.

Certain legal and medical expenses paid or incurred

in the adoption of a minor are deductible as an adjust-

ment to income.

Certain active duty Armed Forces members may

deduct certain moving expenses. The new job location

must be within the State of Alabama.

Self-employed persons may deduct health insurance

premiums to the same extent as allowed for federal

purposes.

For more information on the above exclusions,

please see the instructions for Part II on page 15.

The total adjustments to income from page 2, Part

II, line 16 should be entered on page 1, line 9.

Line 10

Adjusted Gross Income

If the amount on line 10 is less than zero, you may

have a net operating loss that you can carry to another

tax year. If you carry the loss back to earlier years, you

should check the amended return box on your Form 40

and attach Form NOL-85 and/or Form NOL-85A.

Line 11

Itemized or Standard Deduction

You have the option to either itemize your deduc-

tions or you may claim the optional Standard Deduction.

You should compute your deduction both ways to de-

termine the option that gives you the larger deduction. If

you elect to claim the Standard Deduction on your re-

turn and it later becomes necessary to change to item-

ized deductions, you may do so by filing an amended

return.

If married and filing separate returns, both spouses

must claim the same deduction unless the spouses have

lived apart for the entire year, in which case each spouse

may claim either deduction. However, neither spouse

may claim a deduction for expenses paid by the other.

See the instructions for Schedule A for items that may

be claimed as an itemized deduction.

Part-year residents of Alabama may claim only the

itemized deductions actually paid during the period of

Alabama residency.

Itemized Deductions. If you elect to itemize your

deductions, you should check box a on line 11 and com-

plete and attach Schedule A.

Standard Deduction. If you elect to claim the Stan-

dard Deduction, you must check box b on line 11 and

use the Standard Deduction chart on page 9 to deter-

mine your allowable deduction. A dependent or student

may take the standard deduction even if claimed as a

dependent by someone else.

Line 12

Federal Income Tax Deduction

Use your 2023 federal income tax return and the

worksheet on page 31 to determine your federal income

tax deduction. If claiming a deduction on line 12, you

must attach page 1, 2 and Schedule 1 of your Federal

Return, if applicable.

PLEASE NOTE: The Federal line references were

correct at the time these forms and instructions were

printed. However, there may have been changes to Fed-

eral forms after our print deadline and the line numbers

referenced for our forms may have changed. If you have

questions as to the correct line number on the Federal

return, please feel free to call one of our taxpayer serv-

ice centers listed on page 3.

Joint Federal and Separate Alabama Returns, or

Part Year Residents. If a married couple elects to file a

joint federal return and separate Alabama returns, the

federal income tax liability must be determined by a ratio

of each spouse’s federal adjusted gross income to total

joint federal adjusted gross income, or if filing as a part

year resident, the ratio of Alabama adjusted gross in-

come to federal adjusted gross income. This calculation

is required regardless of the method used in claiming

other deductions.

Line 13

Personal Exemption

Enter the personal exemption from line 1, 2, 3, or 4.

Note: Part year residents are allowed the full exemption

amount. A dependent or student may take the personal

exemption even if claimed as a dependent by someone

else.

Line 14

Dependent Exemption

A “dependent” as defined under Alabama law is an

individual other than the taxpayer and his or her

spouse who received over 50% of his or her support

from the taxpayer during the tax year and is also related

to the taxpayer in one of the following relationships:

Son Stepfather

Daughter Mother-in-law

Stepson Father-in-law

Stepdaughter Brother-in-law

Legally adopted child Sister-in-law

Parent Son-in-law

Grandparent Daughter-in-law

Grandchild If related by blood:

Brother Uncle

Sister Aunt

Stepbrother Nephew

Stepsister Niece

Stepmother

NOTE: You cannot claim a foster child, friend, cousin,

yourself, or your spouse as a dependent under Alabama

law.

Birth or Death of Dependent. You can take an ex-

emption for a dependent who was born or who died dur-

ing 2023 if he or she met the qualifications for a

dependent while alive.

Support. You must have provided over 50% of the

dependent’s support in 2023. If you file a joint return, the

support can be from you or your spouse. You cannot

claim credit on an Alabama return for a dependent if you

provided less than 50% of the support under Alabama

law as you can under federal law in certain conditions.

In figuring total support, you must include money the

Page 8

$ 0 – $25,999

$26,000 – $26,499

$25,500 – $26,999

$27,000 – $27,499

$27,500 – $27,999

$28,000 – $28,499

$28,500 – $28,999

$29,000 – $29,499

$29,500 – $29,999

$30,000 – $30,499

$30,500 – $30,999

$31,000 – $31,499

$31,500 – $31,999

$32,000 – $32,499

$32,500 – $32,999

$33,000 – $33,499

$33,500 – $33,999

$34,000 – $34,499

$34,500 – $34,999

$35,000 – $35,499

$35,500 and above

$ 0 – $25,999

$26,000 – $26,499

$26,500 – $26,999

$27,000 – $27,499

$27,500 – $27,999

$28,000 – $28,499

$28,500 – $28,999

$29,000 – $29,499

$29,500 – $29,999

$30,000 – $30,499

$30,500 – $30,999

$31,000 – $31,499

$31,500 – $31,999

$32,000 – $32,499

$32,500 – $32,999

$33,000 – $33,499

$33,500 – $33,999

$34,000 – $34,499

$34,500 – $34,999

$35,000 – $35,499

$35,500 and above

$ 0 – $25,999

$26,000 – $26,499

$26,500 – $26,999

$27,000 – $27,499

$27,500 – $27,999

$28,000 – $28,499

$28,500 – $28,999

$29,000 – $29,499

$29,500 – $29,999

$30,000 – $30,499

$30,500 – $30,999

$31,000 – $31,499

$31,500 – $31,999

$32,000 – $32,499

$32,500 – $32,999

$33,000 – $33,499

$33,500 – $33,999

$34,000 – $34,499

$34,500 – $34,999

$35,000 – $35,499

$35,500 and above

$8,500

$8,325

$8,150

$7,975

$7,800

$7,625

$7,450

$7,275

$7,100

$6,925

$6,750

$6,575

$6,400

$6,225

$6,050

$5,875

$5,700

$5,525

$5,350

$5,175

$5,000

$ 0 – $12,999

$13,000 – $13,249

$13,250 – $13,499

$13,500 – $13,749

$13,750 – $13,999

$14,000 – $14,249

$14,250 – $14,499

$14,500 – $14,749

$14,750 – $14,999

$15,000 – $15,249

$15,250 – $15,499

$15,500 – $15,749

$15,750 – $15,999

$16,000 – $16,249

$16,250 – $16,499

$16,500 – $16,749

$16,750 – $16,999

$17,000 – $17,249

$17,250 – $17,499

$17,500 – $17,749

$17,750 and above

$4,250

$4,162

$4,074

$3,986

$3,898

$3,810

$3,722

$3,634

$3,546

$3,458

$3,370

$3,282

$3,194

$3,106

$3,018

$2,930

$2,842

$2,754

$2,666

$2,578

$2,500

$5,200

$5,065

$4,930

$4,795

$4,660

$4,525

$4,390

$4,255

$4,120

$3,985

$3,850

$3,715

$3,580

$3,445

$3,310

$3,175

$3,040

$2,905

$2,770

$2,635

$2,500

$3,000

$2,975

$2,950

$2,925

$2,900

$2,875

$2,850

$2,825

$2,800

$2,775

$2,750

$2,725

$2,700

$2,675

$2,650

$2,625

$2,600

$2,575

$2,550

$2,525

$2,500

Page 9

Column A Column B Column C

Tax Due –

Total Purchase Price Tax Rate (Multiply Col. A by Col. B)

1. All purchases EXCEPT automotive vehicles and farm machinery .............. .04

2. ATVs, off-road motorcycles, riding lawnmowers, self-propelled construction

equipment and other automotive vehicles that are not

titled or registered by

the county licensing official .............................................. .02

3. Farm machinery or equipment and replacement parts thereof .................. .015

4. TOTAL TAX DUE (Total of Column C). Carry this amount to Schedule ATP, Part I, line 1 ................................

Alabama Use Tax Worksheet

Report 2023 purchases for use in Alabama from out-of-state sellers

on which tax was not collected by the seller.

Standard Deduction

Married Filing Joint Married Filing Separate Head of Family Single

____________________________ ____________________________ ____________________________ ____________________________

AL Adjusted Gross Standard AL Adjusted Gross Standard AL Adjusted Gross Standard AL Adjusted Gross Standard

Income (AL Line 10) Deduction Income (AL Line 10) Deduction Income (AL Line 10) Deduction Income (AL Line 10) Deduction

dependent used for his or her own support even if this

money was not taxable (for example: gifts, savings, wel-

fare benefits). If your child was a student, do not include

amounts he or she received as scholarships.

Support includes items such as food, a place to live,

clothes, medical and dental care, recreation, and edu-

cation. In figuring support, use the actual cost of these

items. However, the cost of a place to live is figured at its

fair rental value.

In figuring support, do not include items such as in-

come taxes, social security taxes, premiums for life in-

surance, or funeral expenses.

If you qualify to claim your child and/or other individ-

uals as your dependent, you must complete on page 2

Part III. The amount entered on page 2, Part III, line 2,

should be entered on page 1, line 14.

Use the following chart to determine the per-depen-

dent exemption amount.

Amount on Dependent

Page 1, Line 10 Exemption

0 - 50,000 1,000

50,001 - 100,000 500

Over 100,000 300

Line 17

Figuring Your Tax

You must figure your tax from the Tax Tables un-

less you are claiming a carryover or carryback Net Op-

erating Loss from another year.

Indicate the method you are using by checking the

appropriate box. If you are claiming a Net Operating

Loss from another year, you must complete and attach

Form NOL-85A.

Line 18

Net Tax Due Alabama

If you are using tax credits to reduce your tax liabil-

ity, Schedule OC must be completed in order to com-

pute your net tax due. You must check the box to

indicate you are using Schedule OC to compute your net

tax due. If you do not have any tax credits, enter the

amount from line 17.

Credits - Schedule OC

Schedule OC must be completed for a credit claim

and Individual taxpayers must register to set up an ac-

count in My Alabama Taxes (MAT) at

www.myalabamataxes.alabama.gov for approval before

claiming certain credits on their tax return. Once logged

into MAT, a taxpayer will need to locate the “Individual

Income Tax” account type, then select “Submit a Credit

Claim” from the “Tax Incentives” section on the right mar-

gin of the page and follow a short series of steps to re-

serve their credit. For individuals who do not have a MAT

account or are unable to set up a MAT account, go to

the MAT homepage, select “Submit an Individual Credit

Claim” from the “Individuals” section on the main page

and follow a short series of steps to reserve your credit.

If the credit claimed on an individual income tax return is

from a Schedule K-1 issued by a pass through entity, the

credit claim will be submitted by the entity and no action

is required by the individual. Supporting documentation

for certain credits is required to be uploaded in MAT.

Taxpayers needing assistance with reserving a tax credit

may call (334) 353-9770 or (334) 353-0602.

While all tax credits are reported on Schedule OC,

some require a separate schedule to be completed be-

fore entering the results on Schedule OC and some re-

quire a MAT account to reserve their credit approval be-

fore submission on Schedule OC.

Please visit the Department’s website for more in-

formation on the Schedule OC and Schedule OC in-

structions for each of the following tax credits: Credit for

Taxes Paid to Other States, Alabama Enterprise Zone

Credit, Basic Skills Education Credit, Rural Physician

Credit, Coal Credit, Full Employment Act of 2011 Credit,

Veterans Employment Act – Employers Credit, Veterans

Employment Act- Business Start Up Expense Credit,

Credit For Taxes Paid to a Foreign Country, Qualified Ir-

rigation System/Reservoir System tax Credit, Alabama

Accountability Tax Credit- School Transfer Credit, Ala-

bama Accountability Act Credit – Scholarship Granting

Organization (SGO) credit, Alabama Adoption Credit,

2013 Alabama Historic Rehabilitation Tax Credit , Ca-

reer Technical Dual Enrollment Credit, Investment Credit

– Alabama Jobs Act, Alabama Renewal Act – Port

Credit, Alabama Renewal Act – Growing Alabama

Credit, Apprenticeship Tax Credit, 2017 Alabama His-

toric Tax Rehabilitation Credit, Railroad Modernization

Act of 2019 Credit, Storm Shelter Credit, Volunteer

Emergency Responders Tax Credit, Innovate Alabama

Tax Credit, and the Income Tax Capital Credit. For more

information on credits see Schedule OC.

Credit for Taxes Paid to Another State. You must

complete Schedule CR and you must attach a copy of

other state’s return or W-2G’s if the taxing state does not

allow a return to be filed for gambling winnings.

The credit is provided to prevent the double taxation

of income and is only available to legal residents of Ala-

bama filing Form 40 who have income from sources out-

side of Alabama that is being taxed by Alabama and

another state (or territory of the United States) in the

same tax year. Residents of Alabama for only a part of

the tax year can claim this credit only if the returns filed

with Alabama and the other state cover the same

periods.

If the state for which you are claiming a credit allows

for credits instead of personal exemptions, call (334)

242-1170 for further information in converting this credit

for Alabama purposes.

No credit is allowable when the income from sources

outside of Alabama is totally offset by a corresponding

deduction. However, income from sources outside of

Alabama that is reported on the return and not totally off-

set by a corresponding deduction may result in a credit.

In such cases the credit is limited to the lesser of the tax

actually due to the other state or territory or the amount

that would be due on the same income computed at the

income tax rate in Alabama. An example of this situation

is shown in the booklet in the instructions for Schedule

CR on page 22. The Schedule CR calculation should not

be used by a taxpayer who paid income tax to a foreign

country. Taxpayers who paid taxes to a foreign country

should use Section B, Part I of Schedule OC. Please see

rule 810-3-21-.03 for calculation of credit when tax was

paid to a foreign country.

For further information for Schedule CR see page

22.

Line 19

Additional Taxes

Please complete Schedule ATP to report consumer

use tax and Catastrophe savings tax, enter amount from

Schedule ATP, Part I, Line 3.

Consumer Use Tax: Review the purchases you

made during 2023. If you purchased items for use in Ala-

bama from out-of-state sellers who did not charge sales

or use tax, you owe consumers use tax on the items. If

you made no purchases from out-of-state sellers, enter

0 (zero) on Schedule ATP, Part I, line 1 and check the

box.

Use tax is the counterpart of the sales tax. State use

tax is imposed at the same rate and on the same type of

transactions as sales tax and is due from the consumer

when the sales tax is not collected. When you purchase

merchandise from a retail store or other business es-

tablishment in Alabama, the seller is required to collect

sales tax on the purchase. When you purchase mer-

chandise from a business located outside of Alabama

the seller might collect use tax on the purchase. How-

ever, not all out-of-state businesses are registered and

required to collect Alabama tax. As the consumer, you

are responsible for ensuring that sales or use tax is paid

on your purchases. When you purchase merchandise

for storage, use or consumption in Alabama and the re-

tail seller does not collect tax on the purchase, you must

report and pay consumer use tax on the purchase price.

Usually, these purchases are made from catalogs, over

the internet, or by telephone and include items such as:

 Clothing

 Books

 Computers

 Computer Software

 Furniture

 Magazine Subscriptions

 Sporting Goods

 Jewelry

 Electronic Equipment

 CDs, DVDs, Audio & Video Cassettes

 Photographic Equipment

 Musical Equipment

 Automotive Accessories and Parts

 ATVs

 Lawn and Garden Equipment

Applicable State Use Tax Rates

The general use tax rate of 4% applies to all pur-

chases of merchandise, except where a different rate of

tax is expressly provided.

The automotive use tax rate of 2% applies to pur-

chases of automotive vehicles. Where any used vehicle

is traded-in on the purchase of a new or used vehicle, the

tax is due on the trade difference, that is, the price of the

new or used vehicle purchased less the credit for the

used vehicle taken in trade. The county licensing official

will collect the tax due on purchases of automotive ve-

hicles that are required to be titled or registered includ-

ing purchases of automobiles, trucks, trailers, mobile

homes, and motor boats. Do not include purchases of

vehicles that are titled or registered in the calculation on

the worksheet on page 9. You must report and pay the

use tax due on other purchases of automotive vehi-

cles including ATVs, off-road motorcycles, riding

lawnmowers, self-propelled construction equipment,

and other self-propelled instruments of conveyance.

The agriculture use tax rate of 1.5% applies to pur-

chases of machinery or equipment used in connection

with the production of agricultural products, livestock, or

poultry on farms and the replacement parts for such ma-

chinery or equipment. Where any used farm machinery

or equipment is traded-in on the purchase of new or used

farm machinery or equipment, the tax is due on the trade

difference, that is, the price of the new or used machin-

ery or equipment less the credit for the used machinery

or equipment taken in trade.

Local Use Tax: City and County use tax may also be

due and should be reported and paid to the appropriate

local tax authority. For information about reporting local

Page 10

use tax please see the department’s web page at

www.revenue.alabama.gov

You can use either the Alabama Use Tax Table on

page 11 or the worksheet on page 9 if you only have In-

ternet or catalog purchases that do not include automo-

tive vehicles, farm machinery, or farm machinery

replacement parts; otherwise use the worksheet on page

9 to compute Alabama Use Tax. For more information

regarding consumers use tax call (334) 242-1490.

Catastrophe Savings Tax: Withdrawals that exceed

the qualified catastrophe expenses during the taxable

year, must be included in income. This amount is taxed

at an additional 2.5% under Section 40-18-312 (d)(1) un-

less: (1) the taxpayer no longer owns a legal residence

that qualifies pursuant to Chapter 7, or (2) the distribu-

tion is made on or after the date on which the taxpayer

attains the age of seventy (70) years old and is a self-in-

sured individual who chooses not to obtain insurance on

his or her legal residence. Enter the additional tax on

Schedule ATP, Part I, line 2.

Line 20

Alabama Election Campaign Fund

If you wish to make a voluntary contribution to Ala-

bama’s Democratic Party or Republican Party indicate

the amount and party by checking the proper box(es) on

lines 20a or 20b.

Each individual may contribute $1 to either party. If

a joint return is filed, each spouse may contribute $1 to

either party. If you make a voluntary contribution to this

fund it WILL INCREASE your tax by the amount of the

contribution.

The total amount entered on line 20a or 20b cannot

exceed $2 for a married couple filing a joint return or $1

for all other filers.

Line 22

Alabama Income Tax Withheld

Enter the total Alabama income tax withheld as

shown on line 5A.

Line 23

2023 Estimated Tax Payments/

Automatic Extension Payment

Enter on this line any payments you made on your

estimated Alabama income tax (Form 40ES) for 2023 or

automatic extension (Form 40V).

CAUTION — DO NOT INCLUDE:

 The amount shown on line 29 of your 2022 Form

40. This is the balance you owed for the tax year 2022,

and cannot be claimed as paid on your 2023 estimated

tax even though you paid it in 2023.

 Any overpayment from 2022 that was refunded

to you.

If you and your spouse paid joint estimated tax but

are now filing separate Alabama income tax returns, ei-

ther of you may claim all of the amount paid, or you can

each claim a part of it. Please be sure to show both so-

cial security numbers on the separate returns. If you and

your spouse paid separate estimated tax but are now fil-

ing a joint income tax return, add the amounts you each

paid.

These instructions also apply if your spouse died dur-

ing the year.

Name Change. If you changed your name because

of marriage, divorce, etc., and you made estimated tax

payments using your former name, attach a statement to

Form 40 explaining all the payments you and your

spouse made in 2023 and the name(s) and social secu-

rity number(s) under which you made the payments.

Caution: It is very important that the social security num-

bers be the same on your current return, your last year’s

return, and all of your estimate vouchers. The Depart-

ment will be unable to allow you proper credit for your

payments unless the numbers are the same. If the De-

partment is unable to verify the amount claimed, you

may be requested to submit copies of all your canceled

checks substantiating the amount claimed. This will

cause considerable delay in processing your return.

Line 24

Previous Payments

This line is for amended returns only. Enter the

amount of your previous payment made with your origi-

nal return and/or billing notices and amended return(s).

Line 25

Refundable Credit

This line is only for the refundable portion of Alabama

Accountability Act, Adoption Credit, or Historic Tax Re-

habilitation Act of 2017 Credit. Enter the amount from

Schedule OC, Section F, line F4.

Line 26

Payments from Schedule CP,

Section B, Line 1

For tax years beginning on or after January 1, 2021,

Act 2021-423 allows the owner, member, partner, or

shareholder of an electing pass-through entity reporting

income to be allowed a refundable credit in an amount

equal to its pro rata or distributive share of the Alabama

income tax paid by the electing pass-through entity with

respect to the corresponding tax year. This amount

needs to be reported on Schedule CP.

Line 28

Previous Refund

This line is for amended returns only. Enter the

amount of your previous refund received from your orig-

inal return and amended return(s).

Line 30

Amount You Owe

(If line 21 is larger than line 29)

Subtract line 29 from line 21, and add line 31, enter

the amount on line 30 – this is the amount you owe the

State of Alabama. It must be paid using Form 40V.

Pay the full amount by check or money order

payable to the “Alabama Department of Revenue.” On

your payment write your social security number, your

daytime telephone number, and “2023 Form 40,” and

remit your payment with Form 40V.

Credit Card: For other payment options, please visit

Page 11

Alabama Use Tax Table

for General Internet and Catalog Purchases

If purchases are over $2,499 use the Alabama Use Tax Worksheet on page 9

Purchases Subject to Use Tax

At least But less than Use Tax Due

0 ........ 50 ........ 1

50 ........ 100 ........ 3

100 ........ 150 ........ 5

150 ........ 200 ........ 7

200 ........ 250 ........ 9

250 ........ 300 ........ 11

300 ........ 350 ........ 13

350 ........ 400 ........ 15

400 ........ 450 ........ 17

450 ........ 500 ........ 19

500 ........ 550 ........ 21

550 ........ 600 ........ 23

600 ........ 650 ........ 25

650 ........ 700 ........ 27

700 ........ 750 ........ 29

750 ........ 800 ........ 31

800 ........ 850 ........ 33

850 ........ 900 ........ 35

900 ........ 950 ........ 37

950 ........ 1,000 ........ 39

1,000 ........ 1,050 ........ 41

1,050 ........ 1,100 ........ 43

1,100 ........ 1,150 ........ 45

1,150 ........ 1,200 ........ 47

1,200 ........ 1,250 ........ 49

Purchases Subject to Use Tax

At least But less than Use Tax Due

1,250 ........ 1,300 ........ 51

1,300 ........ 1,350 ........ 53

1,350 ........ 1,400 ........ 55

1,400 ........ 1,450 ........ 57

1,450 ........ 1,500 ........ 59

1,500 ........ 1,550 ........ 61

1,550 ........ 1,600 ........ 63

1,600 ........ 1,650 ........ 65

1,650 ........ 1,700 ........ 67

1,700 ........ 1,750 ........ 69

1,750 ........ 1,800 ........ 71

1,800 ........ 1,850 ........ 73

1,850 ........ 1,900 ........ 75

1,900 ........ 1,950 ........ 77

1,950 ........ 2,000 ........ 79

2,000 ........ 2,050 ........ 81

2,050 ........ 2,100 ........ 83

2,100 ........ 2,150 ........ 85

2,150 ........ 2,200 ........ 87

2,200 ........ 2,250 ........ 89

2,250 ........ 2,300 ........ 91

2,300 ........ 2,350 ........ 93

2,350 ........ 2,400 ........ 95

2,400 ........ 2,450 ........ 97

2,450 ........ 2,500

........ 99

our website for more information.

How do I pay by ACH Debit

(E-Check)?

You may pay by ACH Debit by going to www.

myalabamataxes.alabama.gov. Do not use Form 40V

when paying by ACH Debit. You will need to have your

bank routing number and checking account number to

use this service. No fee is charged for this service.

If payment for the full amount of tax due is not paid

by the due date of the return, you will be charged inter-

est and will be subject to penalties. See Penalties and

Interest on page 17. More importantly, if you submit your

return without payment, a final assessment may be en-

tered by the Department. A final assessment which is

not appealed is as conclusive as a judgment of a circuit

court. The Department may then proceed with collection

by issuance of legal processes including recording of tax

liens, garnishment of wages or bank accounts, levy,

or a writ of seizure directed to the county sheriff as pro-

vided by Sections 40-1-2, 40-2-11(16), and 40-29-23,

Code of Alabama 1975.

Line 31

Penalties

Complete Schedule ATP, Part II if you have an Esti-

mated Tax Penalty or First-time Second Chance Home

Buyer Savings Account penalty. Enter the amount from

Schedule ATP, Part II, Line 3.

Estimated Tax Penalty: If the amount you owe

(Form 40, page 1, line 30) exceeds $500.00, you may

be subject to an estimate or underestimation penalty. If

at least two-thirds of your gross income for the taxable

year is from farming and you file your return and pay the

total tax by March 1, 2024, you are exempt from this

penalty. Please check the box on Part II, line 1 of Sched-

ule ATP. See the Underpayment Penalty Section on

page 17 of this booklet. You may need to complete Form

2210AL. See page 33, “How to Obtain Forms.”

First-time Second Chance Home Buyer Savings

Account Penalty: If the amount withdrawn from a First-

time Second Chance Homebuyer savings account is not

used for eligible expenses or rolled into another First

Time and Second Chance Home Buyer saving account,

a penalty equal to 10% of the non-qualified amounts

withdrawn is due. Enter amount from Schedule HBC,

Part IV, line 4.

Line 32

Overpayment

(If line 29 is larger than line 21)

Subtract line 21 from line 29, and enter the amount

on line 32 – this is the amount you overpaid.

NOTE: The Alabama Department of Revenue will issue

you a Form 1099-G for the overpayment amount.

If you elect to itemize deductions on your 2023 Fed-

eral return and claim a deduction for Alabama Income

Tax paid in 2023, the amount shown on line 32 should be

reported as income on your 2024 Federal return.

Line 33

Applied to 2024 Estimated Tax

You may elect to credit all or part of the overpayment

shown on line 32 to your 2024 estimated tax. (Place

amount on line 33.)

Once an election is made to apply this overpayment

to your 2024 estimated tax, it cannot later be refunded to

you or applied to pay additional tax for 2023. The amount

entered on this line can only be claimed as a credit on

your 2024 Alabama return.

Line 34

Donation of Refunds

Enter amount from Schedule DC, line 2. (See page

22.)

You may elect to donate all or part of your overpay-

ment, as shown on page 1, line 32, to one or more of the

funds as provided by the Alabama Legislature. The

amounts entered on these lines will be paid to the pro-

grams you indicate. Any amount you contribute may be

claimed as an itemized deduction when you file your

2024 Alabama Income Tax Return. (Caution: When re-

porting your refund on your 2024 Federal return, you

should report the amount of overpayment shown on line

32.)

NOTE: Amounts contributed to these funds WILL RE-

DUCE your refund. Also, once an election is made to

contribute to these funds, that election is irrevocable and

cannot later be refunded. If your return is corrected by

the Department, the amount contributed cannot be used

to pay any additional tax due.

Line 35

Refunded to You

If line 32 is greater than zero, subtract lines 31, 33

and 34 from line 32. You should receive a refund for the

overpayment. If you file an early, accurate return, we will

be able to process your refund more quickly. See “When

Should I Expect My Refund?” and “Common Mis-

takes That Delay Refunds” on page 4 of this booklet for

further information about your refund.

Sign Your Return

Form 40 is not considered a return unless you

sign it. Please sign in black ink only. Your spouse

must also sign if it is a joint return. If you are filing a joint

return with your deceased spouse, see Death of Tax-

payer on page 18.

Did You Have Someone Else Prepare Your Re-

turn? If you fill in your own return, the Paid Preparer’s

Use Only area should remain blank. Someone who pre-

pares your return but does not charge you should not

sign.

Generally, anyone who is paid to prepare your tax

return must sign your return and fill in the other blanks in

the Paid Preparer’s Use Only area of the return. If you

have questions about whether a preparer is required to

sign a return, please contact an Alabama Taxpayer

Service Center.

The preparer required to sign your return MUST:

 Sign in the space provided for the preparer’s sig-

nature. (Signature stamps or labels are not acceptable.)

 Give you a copy of your return for your records in

addition to the copy to be filed with the Alabama De-

partment of Revenue.

BEFORE signing and mailing your return you

should review it to make sure the preparer has entered

the correct name(s), address, and social security num-

ber(s) in the spaces provided and reported all of your in-

come. REMEMBER, you are responsible for the

information on your return even if you pay someone

else to prepare it.

Please enter your daytime phone number. This will

enable us to contact you and help speed your refund if

there are any problems with processing your return.

If you want the Department to contact your tax pre-

parer instead, please give permission to do so by check-

ing the box above the signature line.

Where To File

Your envelope should be addressed in accordance

with one of the following examples:

If you are receiving a refund (Form 40, line 35), mail

your return to:

Alabama Department of Revenue

P.O. Box 154

Montgomery, AL 36135-0001

If you are making a payment (Form 40, line 30), mail

your return, Form 40V and payment to:

Alabama Department of Revenue

P.O. Box 2401

Montgomery, AL 36140-0001

If you are not receiving a refund or making a pay-

ment, mail your return to:

Alabama Department of Revenue

P.O. Box 327469

Montgomery, AL 36132-7469

Current year Form 40 returns should be mailed to

one of the above addresses. Prior year Form 40 returns,

amended returns, and any correspondence pertaining

to a previously filed return should be mailed to:

Alabama Department of Revenue

Income Tax Administration Division

P.O. Box 327464

Montgomery, AL 36132-7464

Page 2, Part I

Other Income

Line 1

Alimony Received

Enter the amounts you received as alimony or sep-

arate maintenance. Amounts you received in 2023 are

taxable to the same extent as for federal purposes.

If you received payments under a divorce or sepa-

ration instrument after 1984, see the instructions for Part

II, line 4 for information in determining whether these

payments qualify as alimony.

Transfers of Property Between Spouses or For-

mer Spouses. In general, no gain or loss will be recog-

nized on a transfer of property between spouses or

former spouses. Please refer to Federal Law for more

details.

Line 2

Business Income or (Loss)

If you conducted a business or practiced a profes-

sion during the taxable year, you must complete and at-

tach a copy of Federal Schedule C or C-EZ to your

Alabama return.

Generally, you may deduct the ordinary and neces-

sary expenses of doing business — the cost of mer-

chandise, salaries, interest, taxes, rent, repairs, and

incidental supplies. In the case of capital investments

and improvements in depreciable property such as build-

ings, machines, and similar items having a useful life of

more than one year, Alabama law provides for a “rea-

sonable allowance” for depreciation over the useful life

of the property.

Page 12

A – IRA, SEP, Keogh, 401(k)(2), or 403(b) Distributions you received in 2023 which included nondeductible contributions.

1 Enter the Total Value (including withdrawals) of your account at the end of the taxable year ......................................

2 Nondeductible Contributions (see instructions). Enter the total of all amounts you contributed that

did not qualify as an adjustment to income ...............................................

3 Enter the total of all amounts you have withdrawn and excluded from income in a previous year’s

Alabama return....................................................................

4 Balance of Nondeductible Contributions. Subtract line 3 from line 2.........................................................

5 2023 Withdrawals. Enter the amount you withdrew during the 2023 taxable year ................................................

6 Exclusion Ratio. Divide the amount on line 4 by the amount on line 1 ...................................................

7 Amount of Exclusion. Multiply the amount on line 5 by the percentage on line 6. Enter the result here, but DO NOT enter more than

the amount on line 4..............................................................................................

8 Amount Taxable. Subtract the amount on line 7 from the amount on line 5. If an IRA Distribution, enter result here and on Schedule RS,

Part II for primary taxpayer and Part III for spouse. If other than an IRA Distribution, enter the result on Schedule RS Part II for primary

taxpayer and Part III for spouse ...................................................................................

B – Pensions, annuities, etc., you first began receiving after December 31, 1986 in which you had a cost basis.

9 Enter the total amount received this year.................................................

10 Amount Taxable. Use Federal Simplified General Rule or Federal General Rule (see page 15 of instructions) .....................

C – Pensions, annuities, etc., you first began receiving prior to January 1, 1987 in which you have not recovered your cost.

11 Enter amount received this year .......................................................

12 Enter the amount of your unrecovered cost ...............................................

13 Amount Taxable. Subtract line 12 from line 11 .......................................................................

14 TOTAL AMOUNT TAXABLE. Add the amounts on lines 10 and 13. If an IRA Distribution, enter the total here and on Schedule RS,

Part II for primary taxpayer and Part III for spouse. If other than an IRA distribution, enter on Schedule RS, Part II for primary taxpayer

and Part III for spouse...........................................................................................

If some of your expenses are part business and part

personal, you can deduct ONLY the business portion.

Adjustments to Federal Schedules C and F. Ala-

bama law differs from federal law in the treatment of

some of the expenses shown on Federal Schedules C

and F, and certain items may need adjusting for Ala-

bama purposes. The expenses which may need adjust-

ing are:

 Percentage Depletion Gas and Oil. In the case

of oil and gas wells, the allowance for depletion shall be

12 percent of the gross income from the property during

the taxable year, excluding from such gross income an

amount equal to any rents or royalties paid or incurred by

the taxpayer in respect to the property. Such amounts

shall not exceed 50 percent of the net income of the tax-

payer, computed without allowance for depletion, from

the property, except that in no case shall the depletion al-

lowance be less than the amount allowable under federal

income tax law.

 Cost Depletion Natural Resources Other than

Gas and Oil. Alabama law has no provision for per-

centage depletion of natural resources other than gas

and oil, as currently allowed under federal law. For Ala-

bama purposes, the depletion allowance shall be com-

puted using the cost depletion method.

 Depreciation. Alabama law allows IRC Section

179 Expense for all taxable years beginning after De-

cember 31, 1989. Adjustments may be necessary if as-

sets were acquired and placed in service prior to tax

years beginning before January 1, 1990.

 Targeted “Jobs Credit.” You may have been al-

lowed to take a portion of your payroll expense as a “Tar-

geted Jobs Credit” on your federal return. This is an

allowable expense for Alabama income tax purposes.

 Passive Activity Losses. Alabama law has no

provision, similar to current federal law, which limits the

deduction of passive trade or business activity losses.

 Office and Home Expense. Alabama Law has

no provision similar to current Federal Law which limits

the amount of otherwise deductible office and home

expense.

If you have adjustments involving any of the previ-

ously described expenses, attach an explanation and

show the adjustment as “Other Expenses” on Federal

Schedule C or F.

The net profit or (loss) from business, as shown on

Federal Schedule C-EZ or C after above adjustments (if

applicable), should be entered on Part I, line 2.

Line 3

Gain or (Loss) from Sale of Real

Estate, Stocks, Bonds, Etc.

If you sold real estate, stocks, bonds or other capital

assets, use Schedule D to report the net gain (or loss).

Schedule D is also used to report the net gain (or loss)

from involuntary conversion of capital assets that are

NOT held in connection with a trade or business, or a

transaction entered into for profit.

If you sold your personal residence, any gain real-

ized is taxable to the same extent as reported on your

federal return. NOTE:

A loss on the sale of a personal

residence is NOT deductible.

For additional information, see the instructions for

Schedule D on page 23.

Line 4

Retirement Income (Schedule RS)

Complete Schedule RS to report fully or partially tax-

able pensions, annuities, IRA distributions (include SEP,

Keogh, 401(k)(2), 403(b) distributions), other distribu-

tions and retirement distribution(s) exempt from Alabama

Income. See the Schedule RS instructions for more in-

formation.

IRA Distributions

ROTH and Educational IRAs

Use Schedule RS to report IRA distributions you re-

ceived. This includes regular distributions, early distri-

butions, rollovers, Roth conversions, and any other

money or property you received from your IRA account

or annuity. Generally, you will receive a Form 1099-R

showing the “gross amount” and “taxable amount” of

your distribution.

If your distribution is fully taxable or if only part of the

distribution is taxable, enter it on Schedule RS, Part II or

Part III if spouse's distribution. You MAY need to com-

plete the worksheet on page 13 to determine the amount

taxable. If the “taxable amount” listed on your Form

1099-R is correct for Alabama purposes as for Federal

purposes then you will NOT need to complete the work-

sheet. If the “taxable amount” listed on your Form 1099-

R is NOT the same for Alabama purposes as for Federal

purposes because you have a different cost basis, then

you will need to complete the worksheet on this page to

calculate the amount taxable for Alabama purposes.

IF THE IRA DISTRIBUTION IS ROLLED OVER,

complete Schedule RS, Part I if no amount is taxable.

Complete Schedule RS, Part II or Part III if amount is

taxable. Attach a statement to your return with complete

information about the IRA, your cost in the plan, and the

type of retirement account in which the distributed funds

were invested.

Beginning in 1998, ROTH and EDUCATIONAL

IRAs were recognized by the Alabama Department of

Revenue. The same restrictions and limitations provided

by the IRS apply when completing your Alabama return.

However, be sure to use Alabama Adjusted Gross In-

Page 13

Use Worksheet to report IRA distributions, other distributions, and pension and annuity income which are not fully taxable. If a distribution is fully taxable, it is not necessary to complete this worksheet

Not Fully Taxable Pensions, Annuities, and IRA Distributions (Include SEP, Keogh, 401(k)(2), and 403(b) Distributions)

WORKSHEET – Partially Taxable Pensions, Annuities, and IRA Distributions.

come when computing your limitations.

WHEN CONVERTING FROM A TRADITIONAL IRA

TO A ROTH IRA, the taxable portion of the distribution

(to be reported on Schedule RS, Part II or Part III) is the

amount that you would have to include in income if you

had taken a distribution and not converted or rolled over

the traditional IRA into a Roth IRA. The taxable portion

should not include any part of a withdrawal from a tradi-

tional IRA that is a return of your basis.

CAUTION: If you have to complete the worksheet on

page 13 to calculate partially taxable distributions from

IRA withdrawals, any IRA distribution along with any tax-

able Roth conversion or taxable IRA rollover must be in-

cluded in Schedule RS, Part II for primary taxpayer or

Part III for spouse.

Rollover Distributions

A “rollover” is a tax-free transfer of cash or other as-

sets from one retirement program to another. There are

two kinds of rollovers to an individual retirement arrange-

ment (IRA): (1) a rollover from one IRA to another, and

(2) a rollover from a qualified employer’s plan to an IRA.

If you received a lump sum distribution from an Em-

ployee Benefit Plan, it should be included in gross in-

come in the year received. There is no provision in

Alabama law for forward averaging of such distributions.

If the lump sum distribution qualifies for the rollover

provision of the Internal Revenue Code, it may also qual-

ify for the rollover provision of the Alabama Income Tax

Code as provided in Alabama Income Tax Regulation

810-3-25-.05(5) reprinted below:

Regulation 810-3-25-.05(5) — [Distributions from a

trust that are not included in gross income of the indi-

vidual for federal purposes due to the “rollover provi-

sions” of Internal Revenue Code Sections 402, 403, 408,

and 409 are excluded from Alabama gross income of the

individual. These are:

(a) qualified stock bonus, pensions, or profit sharing

plans as described in Internal Revenue Code Section

401(a), and which are exempt under Internal Revenue

Code Section 501(a), and meet the rollover requirements

of Internal Revenue Code Section 402,

(b) employee’s annuities which meet the require-

ments of Internal Revenue Code Section 404(a)(2), and

the rollover requirements of Internal Revenue Code Sec-

tion 403,

and meet the rollover provisions of Internal Revenue

Code Section 408, and

(d) retirement bonds that qualify under Internal Rev-

enue Code Section 409 or Internal Revenue Code Sec-

tion 219 and meet the “rollover provisions” of Internal

Revenue Code Section 409.]

If the lump sum distribution qualifies and is rolled

over, enter the total amount received and the taxable

portion, if any, in the spaces provided on Form 40, Part

I, lines 4a and 4b. A statement should also be attached

to your return giving complete information about the re-

tirement fund rolled over, your cost in the plan, and the

type of retirement account in which the distributed funds

were reinvested.

Pensions and Annuities

Use Schedule RS to report pension and annuity in-

come you received. Also, use these lines to report distri-

butions from SEP, Keogh, 401(k)(2), 403(b), and profit

sharing plans. Generally, you will receive a Form 1099-R

or a Form W-2P showing the amount of your distribution.

Generally, unless specifically excluded by law, your

pension payments are fully taxable if you did not con-

tribute to the cost of your pension annuity or you have re-

covered your cost in the plan on prior Alabama income

tax returns.

If your pension or annuity is fully taxable, enter it on

Schedule RS, Part II for primary taxpayer or Part III for

spouse. If only part is taxable, see the worksheet on

page 13 to determine the amount taxable. Enter the tax-

able amount of your pension or annuity on Schedule RS,

Part II for primary taxpayer or Part III for spouse.

Worksheet for Partially Taxable Pensions, Annu-

ities, and IRA Distributions

Use the worksheet on the previous page to report

distributions from profit-sharing plans, retirement plans,

employee savings plans, and individual retirement

arrangements not fully taxable. Also, use this worksheet

to report pension and annuity income not fully taxable. If

the income or distribution is fully taxable you do NOT

need to complete this worksheet. In general, you should

receive a 1099-R showing the amount of your retirement

plan distribution or income. If the taxable portion shown

on your 1099-R is the same for Alabama purposes as

for Federal purposes you do NOT need to complete this

worksheet. Instead report the total and the taxable

amount on Schedule RS, Part II for primary taxpayer or

Part III for spouse.

The taxable portion may NOT be the same for Ala-

bama purposes as for Federal purposes because you

may have a different cost basis. In this case, you must

complete this worksheet to calculate the amount taxable

for Alabama purposes.

Amounts you received from the following retirement

systems are not taxable and should not be reported.

 Alabama Teacher’s Retirement System.

 Alabama Employee’s Retirement System.

 Alabama Judicial Retirement System.

 Civil Service Retirement System.

 Retirement Systems created by the Federal So-

cial Security Acts.

 Railroad retirement benefits received under the

Federal Railroad Retirement Acts of 1935 and 1937.

 Military Retirement Pay.

 TVA Pension System Benefits.

 U.S. Foreign Service Retirement and Disability

Fund Annuities.

 U.S. Government Retirement Fund Benefits.

 Retirement benefits received from any Alabama

firefighting agency by any eligible firefighter or desig-

nated beneficiary.

 Retirement benefits received from any Alabama

police system by any eligible peace officer or designated

beneficiary.

 Any “defined benefit” retirement plan in accor-

dance with IRC 414(j). Contact your retirement plan ad-

ministrator to determine if your plan qualifies.

Use lines 1 through 8 to report amounts you with-

drew from your IRA, SEP, Keogh, 401(k)(2), or 403(b)

account which are not fully taxable and for which you

have not recovered any of your cost basis before Janu-

ary 1, 1987. If you began recovering your cost before

January 1, 1987, you should report these distributions

on lines 11, 12, and 13.

A – IRA, SEP, Keogh, 401(k)(2) or

403(b) Distributions you received in

2023 which included nondeductible

contributions.

Line 1. Enter the total value of your IRA, SEP,

Keogh, 401(k)(2) or 403(b) account at the end of the tax-

able year. The amount entered on this line should in-

clude any withdrawals you made from the account dur-

ing 2023. If you have more than one IRA (or other type

account) you must enter the total value of all such ac-

counts even though you made withdrawals in 2023 from

only one or more of these accounts.

Caution: If you have more than one type of account

(IRA, SEP, etc.) which includes contributions from which

you received nondeductible distributions in 2023, you

must make a separate computation for each type of

account.

Line 2. Nondeductible Contributions. Non de-

ductible contributions are those contributions to an IRA

(or other type account) for which you have not claimed

an adjustment to income on a previous year’s return.

If a distribution is made from an IRA you contributed

to prior to your residency in Alabama, your basis in that

IRA for Alabama purposes will be the same as your

basis for federal purposes.

Amounts may be considered nondeductible con-

tributions for the following reasons:

 The Federal Tax Reform Act of 1986 allowed you

to make nondeductible contributions to your IRA even if

you were unable to deduct all, part, or none of the con-

tributions. Your nondeductible contribution is the differ-

ence between your total allowable IRA contributions (up

to the maximum amount) and the amount you deducted

on your Alabama return that year.

 Qualified contributions made by you to an indi-

vidual retirement arrangement (IRA), simplified em-

ployee pension (SEP), or Keogh plan before January 1,

1982, are considered part of your nondeductible contri-

butions since Alabama did not allow you to defer tax on

these contributions.

 Qualified contributions you made to a Federal

401(k)(2) plan or 403(b) plan before January 1, 1985

are considered part of your cost since Alabama did not

allow you to defer tax on these contributions.

Line 3. Enter the total of all amounts you have with-

drawn from these accounts and excluded from income

on a previous year’s Alabama return.

Line 4. Subtract line 3 from line 2 and enter the re-

sult on line 4. The difference in these amounts repre-

sents the balance of your nondeductible contributions.

Line 5. 2023 Withdrawals. Enter the total of all

amounts you withdrew from your IRA or other deferred

compensation accounts during the taxable year.

Line 6. Exclusion Ratio. Divide the amount on line

4 by the amount on line 1. This ratio will be used to fig-

ure the amount of nondeductible contributions that may

be excluded this year.

Line 7. Amount of Exclusion. Multiply the amount

on line 5 by the percentage on line 6. Enter the result

here, but do not enter more than the amount on line 4.

Line 8. Subtract the amount on line 7 from the

amount on line 5.

Enter amount on line 8 on Schedule RS, Part II if pri-

mary taxpayer or Part III if spouse. If you received dis-

tributions from two or more different types of accounts

(IRA, SEP, Keogh, etc.), you should complete a work-

sheet for each type of account.

B – Pensions, annuities, etc., you

began receiving after December 31,

1986 in which you had a cost basis.

Lines 9 and 10. Use these lines to report only the

pensions and annuities you first began receiving in 1987

which are not fully taxable and for which you used the

federal annuity tables to compute the taxable portion on

Page 14

your federal return.

The taxable part of these pensions and annuities is

computed in the same manner as figured for federal pur-

poses. If the cost basis for Alabama purposes and Fed-

eral purposes is the same, the taxable part will be the

same. If the cost basis is different for Alabama, the tax-

able part will be different. For details, refer to Federal in-

structions and Federal Publication 575, Pension and

Annuity Income. Enter the full amount you received on

line 9 and the taxable portion on line 10.

If you qualify to use the Federal Simplified General

Rule, you will probably find it both simpler and more ben-

eficial than the Federal General Rule in figuring the tax-

able and nontaxable parts of your annuity.

If you meet the conditions to choose the Federal

Simplified General Rule, use the worksheet on this page

to figure your taxable pension for 2023. In completing

this worksheet, use your age at the birthday preceding

your annuity starting date. Be sure to keep a copy of the

completed worksheet because it will help you figure your

2023 taxable pension.

C – Pensions, annuities, etc., you

began receiving prior to January 1,

1987 in which you have not recovered

your cost.

Lines 11 and 12. Use these lines to report pensions

and annuities, which are not fully taxable, that you first

began receiving prior to 1987. Enter on line 11 the full

amount of these pensions that you received in 2022 and

your unrecovered cost on line 12.

For amounts you began receiving prior to 1987, you

can exclude from the taxable amount your unrecovered

cost to the plan. Your cost is the amount you contributed

plus the contributions your employer made on which you

have already paid tax. After you recover your costs, all

amounts you receive are fully taxable. Refer to the in-

structions for line 2 for information concerning amounts

that are considered part of your cost basis of an IRA,

SEP, Keogh, 401(k)(2), or 403(b) account.

Beneficiaries. If a former employee is receiving a

pension or annuity and dies after recovering all of his or

her cost, the entire amount the beneficiary receives is

taxable for Alabama purposes. However, if the pension

or annuity was exempt under Alabama law to the former

employee, it is also exempt to the beneficiary.

If a former employee dies before recovering the en-

tire cost, the beneficiary should continue to report the

amounts received in the same manner as reported by

the former employee. If the former employee began re-

ceiving payments after De cem ber 31, 1986, the bene-

ficiary must continue to use the federal annuity tables

based on the beneficiary’s life expectancy in determining

the taxable part. If the deceased former employee began

receiving payments before January 1, 1987, and has not

recovered the cost, the beneficiary will continue to re-

cover the cost before any amounts become taxable.

Line 14. Add the amounts on lines 10 and 13.

If the amount on line 14 is received from IRA account

or from some other type account, enter it on Schedule

RS, Part II for primary taxpayer or Part III for spouse. If

you received distributions from two or more different

types of accounts, you should report the total of all ac-

counts on Schedule RS, Part II for primary taxpayer or

Part III for spouse.

Line 5

Rents, Royalties, Partnerships,

Estates, Trusts, Etc.

Use line 6 to report income from rents, royalties, part-

nerships, S corporations, trusts, and estates.

For more information, see the instructions for Sched-

ule E. Schedule E should be completed and attached to

Form 40.

Line 6

Farm Income or (Loss)

If you operated a farm during the year, you must at-

tach Federal Schedule F to your return.

Alabama law differs from federal law in the treatment

of certain items. See the instructions for line 2, Part I, for

a description of the items that may need adjusting. If you

have adjustments to any of these items, attach an ex-

planation, and show the adjustment as “Other Expenses”

on Federal Schedule F.

The net profit or (loss) from farming as shown on

Federal Schedule F, after making the necessary adjust-

ments, should be entered on line 7, Part I.

Line 7

Other Income

Enter on line 8 any income you cannot find a place

for on your return or other schedules. State the nature

and source in the spaces provided, or attach a separate

explanation. See below for items that should be reported

under Other Income.

Foreign Income Exclusion. If you are entitled to a

foreign income exclusion, please attach a copy of your

Federal Form 2555 to your return and report the amount

of your exclusion as a credit with a negative sign (Ex-

ample: -30,000) on line 8 Other Income on page 2 of

your return. All foreign income must be reported on your

return in order to receive any foreign income exclusion.

Nonqualified Distribution from Alabama 529 Sav-

ings Plan. If you receive a distribution from your Ala-

bama 529 Savings plan and do not use the distribution

to pay qualified expenses, the amount not used for qual-

ifying expenses is taxable. Enter the amount of the non-

qualified distribution plus 10% of the distribution and

description on Line 8, Other Income.

Nonqualified Withdrawal from First-time Second

Chance Home Buyer Savings Account Penalty. Tax-

payers must include in income the amount of any non-

qualified amounts withdrawn from their First-Time

Second Chance Home Buyer Savings Account includ-

ing any interest earned on these amounts. Enter amount

from Schedule HBC, Part III, Line 5 and description on

Line 8, Other Income.

Nonqualified Withdrawal from Catastrophe Sav-

ings Plan. Withdrawals that exceed the qualified catas-

trophe expenses during the taxable year, the amount

must be included in income. Enter the amount and de-

scription on line 8, Other Income.

Nonqualified Withdrawal from ABLE Savings Ac-

count. If you make a nonqualified withdrawal as defined

by Internal Revenue Code (26 U.S.C 529A), the amount

of the nonqualified withdrawal, plus 10 percent of the

amount withdrawn, shall be taxable as income in the

year of the nonqualified withdrawal.

Page 2, Part II

Adjustments To Income

Lines 1a and 1b

Individual Retirement Arrangement

(IRA) Deduction

Contributions to an Individual Retirement Arrange-

ment (IRA) may be taken as an adjustment to income.

These contributions represent a deferral of tax on a por-

tion of your income. At the time funds are distributed

from these accounts, the amount on which tax has been

deferred cannot be claimed as a cost basis in the fund.

Since the Alabama Income Tax Law prior to 1982

did not allow these contributions to be deducted from

gross income, you may have a cost basis in the fund for

amounts contributed prior to 1982. Accurate records

should be kept of the amounts contributed in order for

you to be able to determine your cost basis when the

funds are withdrawn.

Use the worksheet in your Federal Form 1040 line-

by-line instructions to calculate the amount allowable.

The amount deductible on your Alabama return is sub-

ject to the same limitations as allowable on your 2023

Federal return. However, when figuring the limitation on

the amount deductible use the adjusted gross income

shown on line 10 of your Alabama return without bene-

fit of the IRA deduction.

Line 2

Keogh Retirement Plan and SEP

Deduction

Self-employed individuals may deduct contributions

to a Keogh plan from gross income. These contributions

represent a deferral of tax on a portion of income. The al-

lowable contributions also include those qualified contri-

butions made under a Simplified Employee Pension

(SEP) Plan. At the time funds are distributed from these

accounts, the amount on which tax has been deferred

cannot be claimed as a cost basis in the fund.

Since the Alabama Income Tax Law prior to 1982

did not allow these contributions to be deducted from

Page 15

Worksheet for Federal Simplified General Rule

1. Total pension received this year.

Also enter this amount on

Schedule RS, Part II or Part III..... __________

2. Your cost in the plan (contract),

including any death benefit

exclusion ...................... __________

3. Age at annuity starting date:

Enter:

55 and under ................300

56-60 ......................260

61-65 ......................240

66-70 ......................170

71 and older.................120 __________

4. Divide amount on line 2 by the

number on line 3, and round to two

decimal places.................. __________

5. Multiply line 4 by the number of

months for which this year’s

payments were made ............ __________

6. Taxable pension for year. Sub tract

line 5 from line 1 (do not enter less

than zero). Also, enter this amount

on Schedule RS, Part II or Part III.

If your Form 1099R shows a larger

taxable amount, use the amount on

this line instead of the amount from

the Form 1099R ................ __________

gross income, you may have a cost basis in the fund for

amounts contributed prior to 1982. Accurate records

should be kept of the amounts contributed in order to de-

termine your cost basis when the funds are withdrawn.

Line 3

Penalty on Early Withdrawal of

Savings

The Form 1099-INT given to you by your bank or

savings and loan association will show the amount of

any penalty charged because you withdrew funds from

a time savings deposit before its maturity. Enter this

amount on line 3. (Be sure to include the interest income

on Form 40, page 1, line 6.) Penalties on early with-

drawal from retirement plans are not deductible.

Line 4

Alimony Paid

You can deduct payments of alimony or separate

maintenance made under a court decree to the same

extent allowed for federal income tax purposes. Do not

deduct lump-sum cash or property settlements, volun-

tary payments not made under a court order or a written

separation agreement, or amounts specified as child

support. The name, social security number, and address

of the person receiving the payments should be shown

in the space provided.

Line 5

Adoption Expenses

Beginning January 1, 1991, the reasonable medical

and legal expenses paid or incurred by the taxpayer in

connection with the adoption of a minor may be de-

ducted as an adjustment to income. The term “medical

expenses” include any medical and hospital expenses

of the adoptee and the adoptee’s biological mother

which are incident to the adoptee’s birth, and subsequent

medical care and which, in the case of the adoptee, are

paid or incurred before the petition is granted. Adoption

agency fees are not deductible.

The expenses allowed on your 2023 return are lim-

ited to those expenses paid or incurred on or after Jan-

uary 1, 2023, even though adoption proceedings may

have begun before this date. A resident of Alabama for

only a part of 2023 may deduct only those expenses paid

or incurred while a resident of Alabama. Accurate

records of all expenses claimed as an adjustment to in-

come must be maintained by the taxpayer and be avail-

able to the Alabama Department of Revenue upon

request.

Line 6

Moving Expenses

Certain active duty Armed Forces members may

deduct certain moving expenses as an adjustment to

gross income to the same extent and subject to the

same limitations as currently allowed under federal rules

with the following exception:

The new job location must be within the State of

Alabama.

If you meet the requirements complete and attach

Federal Form 3903 to figure the amount of moving ex-

penses. Enter the total and the new job location as indi-

cated on line 6.

Line 7

Self-employed

Health Insurance Deduction

You can deduct self-employed health in sur ance pre-

miums to the same extent as allowed for federal

purposes.

Line 8

Alabama College Counts 529 Fund or

Alabama Prepaid Affordable College

Tuition Program (PACT) Deduction

You can deduct up to $5,000 or $10,000 if married fil-

ing joint, per year for contributions to the Alabama Col-

lege Counts 529 Fund or to the Prepaid Affordable

College Tuition Program (PACT).

Line 9

Health Insurance Premium Deduction

Alabama resident taxpayers may deduct from Ala-

bama gross income 100 percent of the amounts that they

pay as health insurance premiums as part of an em-

ployer provided health insurance plan who are employed

by an employer that has less than 25 employees and

earns no more than $50,000 of wages and reports no

more than $75,000 of adjusted gross income on their

Alabama individual income tax return or $150,000 if mar-

ried filing joint.

Line 10

Expenses to Retrofit/Upgrade Home

to Resist Wind or Flood Damage

Alabama residents may deduct from gross income

the lesser of 50 percent of the cost or $3,000 to retrofit

or upgrade their home to resist wind or flood damage.

The taxpayer must have a certification as prescribed

under Chapter 31D, Title 27, Code of Alabama 1975 or

the Alabama Residential and Energy Codes Board.

Line 11

Deposits to a Catastrophe

Savings Account

Alabama residents may deduct from gross income

deposits made to a catastrophe savings account. The

deduction is $2,000 if the insurance deductible is equal

to or less than $1,000. If the deductible is greater than

$1,000 the amount of the deduction is the lesser of

$15,000 or twice the amount of the insurance deductible.

If the taxpayer is self-insured and chooses not to obtain

insurance then the deduction is the lesser of $250,000 or

the value of the taxpayer’s legal residence.

Line 12

Contributions to a Health Savings

Account (HSA)

Alabama residents may deduct from gross income

deposits made to a health saving account. The HSA

contributions are defined as contributions made by a tax-

payer to his or her HSA up to the maximum amount al-

lowed pursuant to 26 USC §223. Any contributions made

to a heath savings account using pre-tax dollars are not

deductible.

Line 13

Deposits to an Alabama First-Time

and Second Chance Home Buyer

Savings Account

Alabama residents who have not owned or pur-

chased individually or jointly a home ten years prior to

the purchase of the first-time home in Alabama may now

take a deduction for contributions made to a first-time

and second chance home buyer savings account. Indi-

viduals must open an account with a financial institution

which is designated as a first-time and second chance

home buyer savings account on or after January 1, 2019.

Only the account holder(s) are eligible for a deduction.

Individuals or organizations that contribute to an account

on behalf of the taxpayer will not be eligible for any de-

ductions for the contribution. The funds must be used by

December 31st of the tenth year to purchase a home in

Alabama or the entire funds balance must be included in

the account holder’s income. Taxpayers must maintain

and submit annually with their return any supporting doc-

umentation provided by the financial institution for the

account. Funds withdrawn for reasons other than to pur-

chase a first-time home will require the taxpayer to in-

clude in income non-qualified withdrawals in which a

deduction was claimed, and any interest earned on the

account which was excluded from income on a prior

year(s) tax return in the year of withdrawal. A penalty

equal to 10% of the non-qualified amounts withdrawn is

also charged. Any earnings on the account are not tax-

able if used for the purchase of a first home in Alabama.

Schedule HBC is required to be submitted with the Form

40 if the taxpayer is claiming a deduction for deposits

made to these account(s) or excluding interest earned in

these account(s). It is also used to report withdrawals

and compute penalty for nonqualified withdrawal.

Line 14

Certified Firefighter Insurance

Premiums

Effective with tax year 2020, certified Alabama fire-

fighters may deduct 100 percent of insurance premiums

paid for cancer insurance coverage as defined in Act

2019-361, provided the premiums have not been de-

ducted from federal gross income or are deductible

under any other law. Insurance premiums paid with pre-

tax dollars will not be deductible.

Line 15

Contributions to an Achieving a Better

Life Experience (ABLE) savings ac-

count

Act 2021- 514 allows an individual taxpayer to deduct

contributions made on or after January 1, 2021 to an Ala-

bama ABLE savings account, by or on behalf of such in-

dividual, of an amount up to five thousand dollars

($5,000) per year.

Page 2, Part III

Dependents

Before completing this section, see page 8 of

these instructions for the definition of a dependent.

Schedule DS must be finished first and attached to

your return to take the deduction for dependents.

Please follow the line-by-line instructions on Form

Page 16

40 to complete this section.

NOTE: If you used Federal Form 8332 (Release/Revo-

cation to claim exemption for child by custodial parent),

or if you are NOT claiming a dependent as a dependent

for this tax year – DO NOT complete column “Do you

provide more than one-half dependents support” on

Schedule DS.

Page 2, Part IV

General Information

ALL TAXPAYERS MUST

COMPLETE THIS SECTION

Line 1

Check the appropriate block for either full-year or

part-year residency status.

Full-Year Resident. Check here if you were a legal

resident of Alabama even if you were employed outside

Alabama.

Part-Year Resident. Check here if you were not a

legal resident of Alabama for the entire year. (Example:

During 2023 you moved into Alabama and became a

resident, or you moved out of Alabama and became a

resident of another state.)

Line 4

Enter the Adjusted Gross Income and Taxable In-

come as reported on your 2023 Federal Income Tax Re-

turn. This information is required under Section

40-18-56, Code of Alabama 1975.

Line 5

If you received income from sources taxable for Fed-

eral purposes but exempt for Alabama tax purposes, the

source(s) and amount(s) should be entered on line 5 un-

less they are explained elsewhere on the Alabama

return.

EXAMPLE: U.S. Civil Service Retirement is exempt for

Alabama purposes and therefore should be shown on

line 5.

Direct Deposit Information

In order to receive a direct deposit refund, your Form

40 return must be electronically filed, paper filed using

tax preparation software that utilized 2-D barcode tech-

nology, or a fill-in Form 40 with calculations from our

website.

NOTE: You cannot use the blank Form 40 to receive a

direct deposit refund.

WARNING: Due to changes in the electronic banking

rules, the Alabama Department of Revenue will no

longer allow direct deposits to or through foreign finan-

cial institutions. If you use a foreign financial institution,

you will be issued a paper check.

Line 1

The routing number must be nine digits. The first

two digits must be 01 through 12 or 21 through 32. Oth-

erwise, the direct deposit will be rejected and a check

sent instead. Your check may state that it is payable

through a financial institution different from the one at

which you have your checking account. If so, do not use

the routing number on that check. Instead, contact your

financial institution for the correct routing number to enter

on line 1a.

Line 3

The account number can be up to 17 characters

(both numbers and letters), to include hyphens but omit

spaces and special symbols. Enter the number from left

to right and leave any unused boxes blank. Be sure not

to include the check number.

WARNING: Some financial institutions will not allow a

joint refund to be deposited into an individual account. If

the direct deposit is rejected, a check will be sent in-

stead. The Department is not responsible if a financial in-

stitution rejects a direct deposit. If you are unsure of the

routing number and/or account number, you should

check with your financial institution to ensure they are

correct. The Department is not responsible for a lost re-

fund if you enter the wrong account information.

SECTION

General

4Information

This section contains general information about

items such as amending your tax return, how long to

keep records, and filing a return for a deceased person.

Substitute Tax Forms

You may not use your own version of a tax form un-

less it meets the requirements of the Alabama Depart-

ment of Revenue. All privately designed and printed

substitute tax forms must be approved by the Alabama

Department of Revenue.

Penalties and Interest

Interest. Interest is charged on taxes not paid by

their due date even if an extension of time is granted. If

your return is not filed by the due date and you owe ad-

ditional tax, you should add interest from the due date of

the federal return to date of payment. Submit payment of

the tax and interest with your return. Alabama law pro-

vides that the same rate of interest shall be collected as

currently prescribed by the Internal Revenue Service.

Any of the Alabama Tax payer Service Centers listed on

page 3 of this book let will provide the current rate of in-

terest in effect at the time your return is filed.

Failure To Timely File Return. Alabama law pro-

vides a penalty of 10% of the tax due or $50, whichever

is greater, if filed late. The penalty does not apply to a tax

return filed indicating no tax due or a refund.

Failure To Timely Pay Tax. The penalty for not pay-

ing the tax when due is 1% of the unpaid amount for

each month or fraction of a month that the tax remains

unpaid. The maximum penalty is 25%.

Underpayment Penalty. If the amount of tax due for

2023 is $500 or more you may owe a penalty due to un-

derpayment if the total of your withholding and timely es-

timated tax payments did not equal at least the smaller of:

1. 90% of your 2023 tax (66-2/3% for farmers), or

2. 100% of your 2022 tax. (Your 2022 tax return

must be for a 12-month period.) Use Form 2210AL to

calculate the penalty. Also see Payment of Estimated

Tax on this page.

NOTE: If you included interest, a failure to timely file, or

a failure to timely pay penalty with your payment, iden-

tify and enter these amounts in the bottom margin of

Form 40, page 1.

Other Penalties. There are also penalties for filing a

frivolous return, underpayment due to negligence, un-

derpayment due to fraud, substantial understatement of

estimated tax, and failure to file estimated tax.

Any person failing to file a return as required by Ala-

bama law or rendering a willfully false or fraudulent re-

turn will be assessed by the Alabama Department of

Revenue on the basis of the best information obtainable

by the Department with respect to the income of such

taxpayer.

Criminal Liability. Section 40-29-112, Code of Ala-

bama 1975, as amended, provides for a more severe

penalty for not filing tax returns. Any person required to

file a return under this title who willfully fails to make such

return shall be guilty of a misdemeanor and upon con-

viction thereof, shall be fined not more than $25,000 or

imprisoned not more than 1 year, or both. Section 40-

29-110 provides that any person who willfully attempts to

evade any tax imposed by this title or the payment

thereof shall be guilty of a felony and, upon conviction

thereof, shall be fined not more than $100,000 or im-

prisoned for not more than 5 years, or both. These penal-

ties are in addition to any other penalties provided for by

Alabama law.

Address Change

If you move after filing your return you should notify

the Department of Revenue by sending a Change of Ad-

dress Form available on the Department’s website under

the Forms link to:

Alabama Department of Revenue

Income Tax Administration Division

P.O. Box 327410

Montgomery, AL 36132-7410

Corresponding With

Alabama Department

of Revenue

Be sure to include your social security number and

phone number in any letter to the Alabama Depart ment

of Revenue. (See “Where To File,” page 12.)

How Long Should

Records Be Kept?

Keep records of income, deductions, and credits

shown on your return, as well as any worksheets used

to figure them, until the statute of limitations runs out for

that return. Usually this is 3 years from the date the re-

turn was filed. If income that should have been reported

was not reported and the income omitted is in excess of

25% of the stated income, the period of limitation does

not expire until six (6) years after the due date of the re-

turn or six (6) years after the date the return was filed,

whichever is later. There is no period of limitation

when a return is false or fraudulent, or when no re-

turn is filed.

Also keep copies of your filed tax returns as part of

your records. You should keep some records longer than

the period of limitation. For example, keep property

records (including those on your own home) as long as

they are needed to figure the basis of the original or re-

placement property. Copies of your tax returns will help

Page 17

in preparing future returns, and they are necessary if you

file an amended return. Copies of your returns and your

other records may be helpful to your survivor, or the ex-

ecutor or administrator of your estate.

Requesting a Copy

of Your Tax Return

If you need a copy of your tax return or tax account

information use Form 4506-A, Request for Copy of Tax

Form or Income Tax Account Information. The charge

for a copy of a return is $5. There is no charge for tax ac-

count information.

Amended Return

If you have already filed a return and become aware

of any changes to income, deductions or credits, you

should file an amended tax return. You should file a com-

pleted Alabama Individual Income Tax Return with the

“Amended” box checked. A detailed explanation page of

all the changes made should be attached to the tax

return.

NOTE: If your State return is changed for any reason, it

may affect your Federal Income Tax liability. This would

include changes made as a result of an examination of

your return by the Alabama De part ment of Revenue.

Contact the Internal Revenue Service for more

information.

Death of Taxpayer

If a taxpayer died before filing a return, the taxpayer’s

spouse or personal representative must file a return for

the person who died if they were required to file a return.

A personal representative can be an executor, adminis-

trator, or anyone who is in charge of the taxpayer’s

property.

The person who files the return should check the box

indicating which taxpayer is deceased and provide the

date of death in the space provided. A copy of the death

certificate must also be attached to the return.

If the taxpayer did not have to file a return but had tax

withheld, a return must be filed to receive a refund.

If your spouse died within the tax year, you can file

a joint return even if you did not remarry. You can also

file a joint return if your spouse died before filing the re-

turn. A joint return should show both your and your

spouse’s income during the tax year. Also, write “Filing

as surviving spouse” in the area where you sign the re-

turn. If someone else is the personal representative, he

or she must also sign.

If you are claiming a refund as a surviving spouse fil-

ing a joint return with the deceased and you follow the

above instructions, no other form is needed unless you

receive a joint refund check and the refund check should

be reissued in your name only. In such case, you will

need to file Form 1310A.

Form 1310A is used when you are a surviving

spouse requesting reissuance of the refund check in

your name only, a court-appointed or certified personal

representative and did not file paperwork with decedent’s

original return, or any other person claiming the refund

for the decedent or on behalf of the decedent’s estate.

Payment of Estimated Tax

Every individual who reasonably expects to owe at

least $500 in tax in 2024 is required to file and pay esti-

mated tax.

NOTE: If the TOTAL ESTIMATED TAX for 2024 is less

than five hundred dollars ($500), an estimate is not re-

quired to be paid.

Alabama law provides for penalties if an estimate is

due and is not paid, or is underpaid. The due dates for

making estimated tax payments are the same as re-

quired by Federal Income Tax Law. Do not include pay-

ment of your estimated tax with the payment for tax due

on your individual return because the quarterly voucher

and remittance MUST be mailed separately. Additional

instructions for filing your estimates are on the back of

Form 40ES.

No refund will be made for any estimated taxes paid

except when such amount is taken as a credit on an in-

come tax return filed at the end of the taxable year by the

payor or his authorized representative, or on an

amended income tax return if the full amount paid is not

claimed on the original income tax return.

Automatic Extension

If you know you cannot file your return by the due

date, you do not need to file for an extension. You will

automatically be granted an extension until October 15,

2024. If you anticipate that you will owe additional tax on

your return, you should submit your payment with a pay-

ment voucher (Form 40V) by the due date of your federal

return.

Except in cases where taxpayers are abroad, no ex-

tension will be granted for more than 6 months.

An extension means only that you will not be as-

sessed a penalty for filing your return after the due date.

Interest on the additional tax due from the due date of the

return and any penalties will be assessed if applicable to

your return.

Setoff Debt Collection

If you owe money or have a delinquent account

under any of the following public assistance programs,

your refund may be applied to offset that debt:

 Any and all of the public assistance programs ad-

ministered by the Alabama Department of Human Re-

sources, including the Child Support Act of 1979,

Chapter 10 of Title 38.

 Any and all of the assistance programs adminis-

tered by the Alabama Medicaid Agency.

 Overpayment of unemployment compensation.

 Any and all unpaid debt submitted by local gov-

ernmental entities.

 Any and all court fees/fines owed to the Adminis-

trative Office of Courts.

If the Alabama Department of Human Resources,

the Alabama Department of Labor, the Administrative

Office of Courts, the Alabama Medicaid Agency, Ala-

bama League of Municipalities, or Association of County

Commissions of Alabama notifies the Alabama Depart-

ment of Revenue that you have a delinquent account in

excess of $25, part or all of your refund may be applied

to offset that debt. If you are married and filing a joint re-

turn, the joint refund may be applied to offset any of the

above debts.

IMPORTANT: If you have been assessed taxes from a

prior year, your current year refund will be applied to that

debt even if the liability resulted from a jointly filed return.

Federal Refund Offset

Program

Your 2023 federal or state refund will be taken to sat-

isfy any outstanding liabilities owed to the State of Ala-

bama or to the Internal Revenue Service.

SECTION

Instructions to

5Schedules for

Form 40

Instructions For

Schedule A (Form 40)

Itemized Deductions

Changes You Should Note

The itemized deductions you may claim on your Ala-

bama return are similar to the deductions allowed for

Federal purposes; however, certain items may be

treated differently. Please see the line by line instruc-

tions which follow for an explanation of these differences.

Purpose of Schedule

Some taxpayers should itemize their deductions be-

cause they will save money. See Itemized or Standard

Deduction on page 8.

Schedule A must be completed in detail if you elect

to itemize your deductions instead of claiming the stan-

dard deduction.

If you itemize, you can deduct part of your medical

and dental expenses, part of your unreimbursed em-

ployee business expenses, amounts you paid for certain

taxes, interest, contributions, and other miscellaneous

expenses. You may also deduct certain casualty and

theft losses.

Married, Filing Separate Returns. If married and fil-

ing separate returns, both spouses must claim the same

deduction unless the spouses have lived apart for the

entire year, in which case each spouse may claim either

deduction. However, neither spouse may claim a de-

duction for expenses paid by the other.

Part-year Residents. Individuals becoming or ceas-

ing to be residents during the year are entitled to claim

ONLY the itemized deductions that were actually paid

while a resident of Alabama. The Department will per-

mit you to prorate a deduction (such as interest or taxes)

based on the number of months you were a resident if

the deduction was paid during the entire year and the

amount actually paid while a resident cannot be

determined.

Lines 1 through 4

Medical and Dental Expenses

Before you can figure your total medical and dental

expenses, you must complete your Form 40, page 1,

lines 1 through 10.

Medical and dental expenses are allowed as item-

ized deductions to the same extent as allowed for federal

purposes with the following exceptions:

 Do not include in medical and dental expenses

insurance premiums paid by an employer-sponsored

health insurance plan (cafeteria plan).

 You may deduct only that part of your medical

and dental expenses that is more than 4% of the amount

on Form 40, page 1, line 10.

 Qualified long term care premiums are not in-

Page 18

cluded in medical and dental expenses. They are de-

ductible in full on line 26.

Enter the total of your medical and dental expenses

after reducing these expenses by any payments re-

ceived from insurance or other sources. Include amounts

you paid for doctors, dentists, nurses, hospitals, pre-

scription medicines and drugs, or insulin. Also, include

the total amount you paid for insurance premiums for

medical and dental care, amounts paid for transporta-

tion and lodging, and other expenses such as hearing

aids, dentures, eyeglasses, and contact lenses.

If your insurance company paid your doctor or den-

tist directly for part of your medical expenses and you

paid only the amount that remained, include in your med-

ical expenses ONLY the amount you paid.

If you received a reimbursement in 2023 of prior year

medical or dental expenses, do not reduce your 2023

expenses by this amount. You must include the reim-

bursement in income on Form 40, Part 1, line 8, if you

deducted the medical expenses in the earlier year and

the deduction reduced your tax. Federal Pub. 502 tells

you how to figure the amount to include in income.

When figuring the deduction, you may include med-

ical and dental bills you paid for:

 Yourself.

 Your spouse.

 All dependents claimed on your return.

 Your child whom you do not claim as a depend-

ent because of the federal rules explained for Children

of Divorced or Separated Parents.

Examples of Medical and Dental

Payments You CAN Deduct

To the extent you were not reimbursed, you can

deduct what you paid for:

 Medicare Part B insurance.

 Prescription medicines and drugs, or insulin.

 Premiums paid to private insurers for additional

Medicare coverage.

 Medical doctors, dentists, eye doctors, chiro-

practors, osteopaths, podiatrists, psychiatrists, psychol-

ogists, physical therapists, acupuncturists, and

psy cho analysts (medical care only).

 Medical examinations, X-ray and laboratory serv-

ices, insulin treatment, and whirlpool baths the doctor

ordered.

 If you pay someone to do both nursing and

housework, you can deduct only the cost of the nursing

help.

 Hospital care (including meals and lodging), clinic

costs, and lab fees.

 Medical treatment at a center for drug addicts or

alcoholics.

 Cost of a weight-loss program for the purpose of

treating diagnosed obesity or another recognized dis-

ease. Cost must be out-of-pocket and uncompensated.

 Medical aids such as hearing aid batteries,

braces, crutches, wheelchairs, guide dogs, and the cost

of maintaining them.

 Lodging expenses (but not meals) paid while

away from home to receive medical care in a hospital or

a medical care facility that is related to a hospital. Do not

include more than $50 a night for each eligible person.

 Ambulance service and other travel costs to get

medical care. If you used your own car, you can claim

what you spent for gas and oil to travel to and from the

place you received medical care, or you can claim the

federal mileage rate. Add parking and tolls to the amount

you claim under either method.

Examples of Medical and Dental

Payments You CANNOT Deduct

 Premiums paid by an employer-sponsored health

insurance plan (cafeteria plan).

 The basic cost of Medicare insurance (Medicare

Part A).

NOTE: If you were 65 or older but not entitled to social

security benefits, you may deduct premiums you volun-

tarily paid for Medicare A coverage.

 Life insurance or income protection policies.

 The 1.45% Medicare (hospital insurance bene-

fits) tax withheld from your pay as part of the social se-

curity tax or the Medicare tax paid as part of social

security self-employment tax.

 Nursing care for a healthy baby.

 Illegal operations or drugs.

 Nonprescription medicines or drugs.

 Travel your doctor ordered for rest or change.

 Funeral, burial, or cremation costs. Federal Pub.

502 has a discussion of expenses that may and may not

be deducted. It also explains when you may deduct cap-

ital expenditures and special care for handicapped

persons.

Lines 5 through 9

Taxes (Other than Federal Income

Tax) You CAN Deduct

If deductions are itemized, you CAN DEDUCT the

following taxes:

 Real Estate Taxes (line 5). Include taxes you

paid on property you own in any state that was not used

for business. If you pay real estate taxes as part of your

mortgage payments, do not take a deduction for that

amount. Deduct the taxes in the year the mortgage com-

pany actually paid them to the taxing authority.

 FICA Tax (Social Security and Medicare) (line

6). You can deduct the FICA tax (Social Security and

Medicare) withheld on your income by your employer. If

you worked for more than one employer which resulted

in more than the maximum FICA tax being withheld, the

excess amount claimed as Federal Income Tax With-

held on your Federal return cannot be claimed as an

itemized deduction on your Alabama return.

 Federal Self-Employment Taxes (line 6). You

can deduct the Federal self-employment tax you paid

during the year 2023 for the tax year 2022 and/or prior

years.

 Railroad Retirement Tax (line 7). You can

deduct the railroad retirement tax you paid in 2023. Only

your contribution to tier one railroad retirement is de-

ductible as an itemized deduction.

 Other taxes (line 8). In addition to the above

taxes, you can also deduct:

(a) City, County, and Occupational Tax as re-

ported on your W-2.

(b) State Unemployment Insurance Tax (S.U.I.).

Employees were not required to pay S.U.I. Tax in 2023

since the full amount was paid by their employer. How-

ever, if S.U.I. Tax was paid to a state other than Ala-

bama, it may be deducted.

ductible only if you are the person making the gift and

you paid the tax. (The person receiving the gift cannot

claim this deduction even though he paid the tax.)

(d) Personal Property Taxes. This tax must be

based on the value alone. For example, if part of the fee

you paid for the registration of your car was based on

the car’s value and part was based on its weight, you

can deduct only the part based on value.

(e) Generation-Skipping Transfer (GST) Taxes.

Generation-skipping transfer taxes imposed on income

distributions by 26 U.S.C. 2601 are deductible if you paid

or accrued the taxes within the taxable year.

Taxes You CANNOT Deduct include

but are not limited to

 State income taxes. (If you paid state income

taxes to another state, you may be entitled to a tax credit.

See instructions for Schedule CR for further information.)

 State and local sales taxes.

 Income tax you paid to a foreign country.

 Taxes you paid for another person.

 License fees (marriage, driver’s, dog, hunting,

pistol, etc.).

 Civil Service Retirement contributions (State or

Federal).

 Federal excise tax on personal property, trans-

portation, telephone, and gasoline.

 Customs duties.

 Gasoline tax.

 State utility taxes.

 Tax on liquor, beer, wine, cigarettes, and tobacco.

 Car inspection fees.

 Taxes you paid for your business or profession.

(Use Schedule C, C-EZ, E, or F to deduct these busi-

ness expenses.)

 Assessments for sidewalks or other improve-

ments to your property.

Lines 10a through 14

Interest You Paid

The interest you paid that can be claimed as an item-

ized deduction is limited in most cases to the same

amount as currently allowable for federal purposes.

You should show on Schedule A interest you paid

on nonbusiness items only. Whether your interest ex-

pense is treated as investment interest, personal inter-

est, or business interest depends on how and when you

used the loan proceeds.

NOTE: Personal interest is no longer deductible.

Complete and attach Alabama Form 4952A if you are

claiming investment interest as an itemized deduction.

If you qualify for the Mortgage Interest Credit on your

Federal return, the total interest you paid (before the

credit) is deductible for Alabama purposes.

For further information describing the interest you

may deduct, refer to federal instructions and publications.

Lines 15 through 18

Gifts to Charity

Contributions are allowable as itemized deductions

to the same extent as currently allowed for federal pur-

poses. However, when determining any limitations, you

must use Alabama (not Federal) adjusted gross income.

You can deduct what you gave to organizations that

are religious, charitable, educational, scientific, or literary

in purpose. You can also deduct what you gave to or-

ganizations that work to prevent cruelty to children or

animals.

Note: See Federal Pub. 526 for more information

Examples of these organizations are:

 Churches, temples, synagogues, Salvation Army,

Page 19

Red Cross, CARE, Goodwill Industries, United Way, Boy

Scouts, Girl Scouts, Boys and Girls Clubs of America,

etc.

 Fraternal orders if the gifts will be used for the

purposes listed above.

 Veteran’s and certain cultural groups.

 Nonprofit schools, hospitals, and organizations

whose purpose is to find a cure for, or help people who

have arthritis, asthma, birth defects, cancer, cerebral

palsy, cystic fibrosis, diabetes, heart disease, hemo-

philia, mental illness or retardation, multiple sclerosis,

muscular dystrophy, tuberculosis, etc.

 Federal, state, and local governments if the gifts

are solely for public purposes.

If you contributed to a charitable organization and

also received a benefit from it, you can deduct only the

amount that is more than the benefit you received. If you

do not know whether you can deduct what you gave to

an organization, check with that organization or with the

IRS.

Contributions You MAY Deduct

Contributions may be in cash (keep canceled

checks, receipts, or other reliable written records show-

ing the name of the organization and the date and

amount given), property, or out-of-pocket expenses you

paid to do volunteer work for the kinds of organizations

described above. If you drove to and from the volunteer

work, you may take 14 cents a mile or the actual cost of

gas and oil. Add parking and tolls to the amount you

claim under either method. (But don’t deduct any

amounts that were repaid to you.)

You MAY NOT Deduct as

Contributions

 Travel expenses (including meals and lodging)

while away from home unless there was no significant el-

ement of personal pleasure, recreation, or vacation in

the travel.

 Political contributions.

 Dues, fees, or bills paid to country clubs, lodges,

fraternal orders, or similar groups.

 Value of any benefit such as food, entertainment,

or merchandise that you received in connection with a

contribution to a charitable organization.

Example. You paid $100 to a charitable organiza-

tion to attend a fund-raising dinner. To figure the amount

of your deductible charitable contribution, sub tract the

value of the dinner from the total amount you paid. If the

value of the dinner was $40, your deductible contribu-

tion is $60.

 Cost of raffle, bingo, or lottery tickets.

 Cost of tuition.

 Value of your time or services.

 Value of blood given to a blood bank.

 The transfer of a future interest in tangible per-

sonal property (generally, until the entire interest has

been transferred).

 Gifts to:

a. Individuals.

b. Foreign organizations.

c. Groups that are run for personal profit.

d. Groups whose purpose is to lobby for changes

in the laws.

e. Civic leagues, social and sports clubs, labor

unions, and chambers of commerce.

Record Keeping. If you gave property, you should

keep a receipt or written statement from the organiza-

tion you gave the property to, or a reliable written record

that shows the organization’s name and address, the

date and location of the gift, and a description of the

property. You should also keep reliable written records

for each gift of property that include the following

information:

a. How you figured the property’s value at the time it

was given. (If the value was determined by an appraisal,

you should also keep a signed copy of the appraisal.)

b. The cost or other basis of the property if you must

reduce it by any ordinary income or capital gain that

would have resulted if the property had been sold at its

fair market value.

c. How you figured your deduction if you chose to re-

duce your deduction for gifts of capital gain property.

d. Any conditions attached to the gift.

NOTE: If your total deduction for gifts of property is over

$500, or if you gave less than your entire interest in the

property, or you made a “qualified conservation contri-

bution” under Federal Section 170(h), your records

should contain additional information. See Federal Pub.

526 for details.

Line 15

Enter the total contributions you made in cash or by

check (including out-of-pocket expenses).

Line 16

Enter the contributions of property. If you gave used

items such as clothing or furniture, deduct their fair mar-

ket value at the time you gave them. Fair market value

is what a willing buyer would pay a willing seller when

neither has to buy or sell and both are aware of the con-

ditions of the sale. If the amount of your deduction is

more than $500, you must complete and attach Federal

Form 8283, Noncash Charitable Contributions. If your

total deduction is over $5,000, you may also need ap-

praisals of the values of the donated property. For this

purpose, the “amount of your deduction” means your de-

duction BEFORE applying any income limitations that

could result in a carryover of contributions. See Federal

Form 8283 and its instructions for details.

Line 17

Enter on line 17 any carryover of contributions that

you were unable to deduct in an earlier year because it

exceeded your adjusted gross income limit.

Lines 19a, b, and c

Casualty and Theft Losses

A casualty or theft loss is determined in the same

manner as on your federal return with the following

exceptions:

 The loss may be claimed only in the year during

which the loss occurred or the theft was discovered.

 The loss on personal property must be reduced

by 10% of the Alabama adjusted gross income as

shown on Form 40, page 1, line 10.

Use lines 19a, b, and c to report casualty or theft

losses of property that are not a trade or business, in-

come-producing, or rent or royalty property. Complete

and attach Federal Form 4684 to figure your loss. Enter

on line 19a of Alabama Schedule A the amount of loss

as shown on line 15 or line 16 (Section A) of Form 4684.

Losses You MAY Deduct

You may be able to deduct all or part of each loss

caused by theft, vandalism, fire, storm, and car, boat,

and other accidents or similar causes. You may also be

able to deduct money you had in a financial institution

but lost because of the insolvency or bankruptcy of the

institution.

You may deduct nonbusiness casualty or theft losses

only to the extent that —

a. the amount of EACH separate casualty or theft

loss is more than $100, and

b. the total amount of ALL losses during the year is

more than 10% of your adjusted gross income on Form

40, page 1, line 10.

Special rules apply if you had both gains and losses

from nonbusiness casualties or thefts. Get Federal

Form 4684 for details.

Losses You MAY NOT Deduct

 Money or property misplaced or lost.

 Breakage of china, glassware, furniture, and sim-

ilar items under normal conditions.

 Progressive damage to property (buildings,

clothes, trees, etc.) caused by termites, moths, other in-

sects, or disease.

Use line 21 of Schedule A to deduct the costs of

proving that you had a property loss. (Examples of these

costs are appraisal fees and photographs used to es-

tablish the amount of your loss.)

For more details, refer to federal instructions and

publications.

Lines 20 through 24

Miscellaneous Deductions Expenses

Subject to the 2% Limit

Most miscellaneous deductions cannot be deducted

in full. You must subtract 2% of your Alabama adjusted

gross income from the total. You figure the 2% limit on

line 23.

Generally, the 2% limit applies to job expenses you

paid for which you were not reimbursed (line 20). The

limit also applies to certain expenses you paid to pro-

duce or collect taxable income (line 21). See the in-

structions for lines 20 and 21 for examples of expenses

to deduct on these lines.

The 2% limit does not apply to certain other miscel-

laneous expenses that you may deduct. See the in-

structions for line 25 for examples of these expenses.

Line 20

Use this line to report Alabama job expenses you

paid for which you were not reimbursed. In some cases,

you must first fill out Federal Form 2106, Employee

Business Expenses. Fill out Form 2106 if:

1. You claim any travel, transportation or meal ex-

penses for your job; OR

2. Your employer paid you for any of your job ex-

penses reportable on line 20.

If 1 or 2 above applies, enter the net deductible

amount from Federal Form 2106 on line 20 of Schedule

If you do not have to fill out Form 2106, list the type

and amount of your expenses on the space provided on

line 20. If you need more space, attach a statement

showing the type and amount of the expense.

Examples of expenses

to include on line 20 are:

 Travel, transportation or meal expense. Note: If

you have any of these expenses, you must use Federal

Form 2106 for all your job expenses.

 Union dues.

 Safety equipment, small tools, and supplies you

used in your job.

Page 20

 Uniforms your employer said you must have and

which you may not usually wear away from work.

 Protective clothing required in your work such as

hard hats, safety shoes, and glasses.

 Physical examinations your employer said you

must have.

 Dues to professional organizations and chambers

of commerce.

 Subscriptions to professional journals.

 Fees to employment agencies and job search ex-

penses in your present occupation.

 Education expenses you paid that were required

by your employer, or by law or regulations, to keep your

salary or job. In general, you may include the cost of

keeping or improving skills you must have in your job.

Some educational expenses are not deductible. See Ex-

penses You MAY NOT Deduct.

 Business use of part of your home, but ONLY if

you use that part exclusively and on a regular basis in

your work and for the convenience of your employer. For

details, including limits that apply, see Federal Pub. 587,

Business Use of Your Home. Also, see the instructions

for Part I, line 2 on page 13.

Line 21

Use this line for amounts you paid for the production

or collection of taxable income; for the management,

conservation, or maintenance of property held for the

production of taxable income; or in connection with the

determination, collection, or refund of any tax. List the

type and amount of each expense in the space provided

on line 21. If you need more space, attach a statement

showing the type and amount of each expense. Enter

one total in the amount space for line 21. Examples of

these expenses are:

 Tax return preparation fee.

 Safe deposit box rental.

 Certain legal and accounting fees.

 Clerical help and office rent.

 Custodial (e.g., trust account) fees.

 Your share of the investment expenses of a

regulated investment company.

 Certain losses on nonfederally insured deposits

in an insolvent or bankrupt financial institution.

For more information (including limits on the amount

you can deduct), see Federal Pub. 529.

NOTE: Excess deductions from decedent’s estate and ir-

revocable trust cannot be claimed. See Code of Ala-

bama 40-18-25(4).

Line 25

Miscellaneous Deductions Expenses

NOT Subject to the 2% Limit

Use this line to report miscellaneous deductions that

are NOT subject to the 2% AGI limit. Only the expenses

listed below can be deducted on line 25:

 Gambling losses to the extent of gambling win-

nings. Report gambling winnings on Form 40, page 2,

Part I, Line 8.

 Amortizable bond premium on bonds acquired

before October 23, 1986.

 Unrecovered investment in a pension. See Fed-

eral Pub. 17.

 Impairment-related work expenses of a disabled

person.

List the type and amount of each expense. Enter the

total on line 25.

Expenses You MAY NOT Deduct

Some expenses are not deductible at all. Examples

are:

 Political contributions.

 Personal legal expenses.

 Lost or misplaced cash or property (but see Ca-

sualty and Theft Losses).

 Expenses for meals during regular or extra work

hours.

 The cost of entertaining friends.

 Expenses of going to or from work.

 Education that you need to meet minimum re-

quirements for your job or that will qualify you for a

new occupation.

 Expenses of:

a. Travel as a form of education.

b. Attending a seminar, convention, or similar

meeting unless it is related to your

employment.

 Fines and penalties.

 Funeral expenses.

Line 26

Qualified Long-term Care Coverage

Premiums paid pursuant to a qualifying insurance

contract for qualified long term care coverage paid by

the taxpayer may be deducted on line 26. Qualified long-

term care services include care for necessary diagnos-

tic, preventive, therapeutic and rehabilitative services

and maintenance or personal care services which are

required by a chronically ill individual in a qualified facil-

ity or services which are provided pursuant to a place of

care prescribed by a licensed health care practitioner.

Instructions For

Schedule B

Interest and Dividend Income

Purpose of Schedule

Use Schedule B if you are filing Form 40 and the total

taxable and nontaxable income from interest and divi-

dends is $1,500 or more.

Mutual Funds. If you received a 1099-DIV, 1099-

INT or substitute statement from a brokerage firm or mu-

tual fund, include the interest and dividends on Schedule

B. Capital gains should be reported on Schedule D. List

the mutual fund or brokerage firm’s name as the payer

and enter the total interest or dividends shown on that

form on Schedule B.

Interest Income

All interest you received in 2023 is taxable for Ala-

bama purposes except interest on obligations of the

United States or its possessions, and interest on obliga-

tions of the State of Alabama or any county, municipal-

ity, or other political subdivision of Alabama.

Show the name of the payer and the amount of all in-

terest you received on Schedule B. Exempt interest

should be listed in Column A and taxable interest in Col-

umn B.

Examples of TAXABLE Interest

 Accounts (including certificates of deposit and

money market accounts) with banks, credit unions,

and savings and loan associations.

 The percentage of dividends not derived from

interest on United States obligations and/or Alabama

municipal obligations which are received from a regu-

lated investment company.

 Asian Development Bank.

 African Development Fund.

 Building and loan accounts.

 Federal Home Loan Mortgage Corporation.

 Federal National Mortgage Association (FNMA).

 Government National Mortgage Association

(GNMA).

 Inter-American Bank, International Bank for Re-

construction and Development, and World Bank.

 International Finance Corporation.

 International Development Association.

 International Monetary Fund.

 National Consumer Cooperative Bank.

 Refunds of federal income tax.

 Refunds of state income tax.

 Federal Land Credit Banks.

 Federal Housing Authority.

 Small Business Association.

Examples of EXEMPT Interest

 The percentage of dividends derived from inter-

est on United States obligations and/or Alabama mu-

nicipal obligations which are received from a regulated

investment company.

 Bank for Cooperatives.

 Student Loan Marketing Association (SLMA).

 Bonds issued by the Government of Puerto

Rico or the Government of Guam.

 Bonds issued by the government of the Virgin

Islands

 Federal Financing Bank.

 Federal Land Banks.

 Federal Intermediate Credit Banks.

 Federal Home Loan Banks.

 Production Credit Associations.

 U.S. Treasury Bills, U.S. Treasury Notes, or

U.S. Series E and H Bonds.

 Tennessee Valley Authority.

 Federal Farm Credit Bonds.

 Federal Home Administration.

 Commodity Credit Corporation.

 Federal Deposit Insurance Corporation.

 Federal Saving & Loan Insurance Corporation.

 General Insurance Fund.

 GSA Public Building Trust Participation

Certificates.

 Participation Certificates in the Federal Assets

Financing Trust.

 Special Food Service Program.

Dividend Income

All dividends, including liquidating dividends, you re-

ceived in 2023 are fully taxable. Gain or loss on liqui-

dating dividends should be reported on Schedule D.

Dividends from savings and loan associations are also

taxable. Include cash and the value of stock, property, or

merchandise you received as a dividend.

List the payer’s name and show the amount of in-

come. If securities are held in a brokerage account, list

the name of the brokerage firm as the payer.

Page 21

Instructions For

Schedule CR

Credit for Taxes Paid

To Other States

See the general instructions for credit for tax paid to

another state on page 10. Below is an example of

when all of the income in the other state is not taxed

on the Alabama return. In such situations, you may

not be entitled to the full amount of tax paid to the

other state. The following example can be used by

changing the figures to fit your income and/or loss.

The taxpayer is a single filing resident of Alabama

and has income from wages of $66,666.67. The tax-

payer has gambling winnings of $100,000.00. The tax-

payer has substantiated gambling losses of $50,000.00

of which only $30,000.00 is allowed as a deduction on

the other state’s return.

Use this example to compute the income from the

other state under Alabama Tax Law.

(1) Income from Other State ..........$100,000.00

(2) All Alabama allowed Expenses (Losses)

associated with Income from Other State:

(2a) Gambling Losses . . $ 50,000.00

(2b) .................$

(2c) .................$

(3) Add lines 2a, 2b, and 2c...........$ 50,000.00

(4) Income from other state under Alabama

Law (subtract line 3 from 1 to get the

same income taxed by Alabama) ...$ 50,000.00

(a) If the result is zero or less, STOP here, you are

not due a credit against your Alabama income tax.

(b) If there is no entry on line 2 above, the “taxable

income” from the other state return should be entered

on Schedule CR, line 1.

Alabama tax on the amount on line 4 using the tax tables

on pages 25-30. In this example, the tax credit would be

$2,463.00.

NOTE: Residents, that worked and received

income/wages from a state that doesn’t have income tax,

will not be eligible for the credit for taxes paid to another

state.

Instructions For

Schedule DC

Donation Check-Offs

Line 1a

Alabama Senior Services Trust Fund

This fund will assist in the support of programs for

the aging in Alabama. If you wish to make a contribution

to this program, enter a dollar amount.

Line 1b

Alabama Arts Development Fund

This fund provides for grants to tax exempt organi-

zations or associations to encourage development of

quality arts activities or cultural facilities in local areas. If

you wish to make a contribution to this program, enter a

dollar amount.

Line 1c

Alabama Nongame Wildlife Fund

This is a program under the jurisdiction of the Game

and Fish Division of the Department of Conservation

which provides management of such nongame wildlife.

If you wish to make a contribution to this program, enter

a dollar amount.

Line 1d

Child Abuse Trust Fund

This fund encourages the direct provision of services

to prevent child abuse and neglect. If you wish to make

a contribution to this program, enter a dollar amount.

Line 1e

Alabama Veterans’ Program

This fund provides supportive assistance through

nursing and related health care for Alabama ailing and

aged veterans of the armed forces who have need of

special nursing and related health care services. If you

wish to make a contribution to this program, enter a dol-

lar amount.

Line 1f

Alabama State Historic

Preservation Fund

Your donations to this fund will be used by the Ala-

bama Historical Commission to pay the costs of the

maintenance, acquisitions, preservation and operations

of its acquisitions. If you wish to make a contribution to

this fund enter a dollar amount.

Line 1g

Alabama State Veterans Cemetery at

Spanish Fort Foundation, Inc.

Your donations to this fund will be used to promote

the mission of the cemetery and support other veteran

organizations, activities and programs which promote

the welfare of veterans and commemorate the honor-

able service provided by veterans. If you wish to make

a contribution to this fund, enter a dollar amount.

Line 1h

Foster Care Trust Fund

The Foster Care Trust Fund provides educational,

athletic, artistic, and special occasion opportunities to

Alabama’s foster children. If you wish to make a contri-

bution to this fund, enter a dollar amount.

Line 1i

Mental Health

This is a non-profit organization dedicated to the

eradication of mental illness and to the improvement of

the quality of life of those whose lives are affected by

these diseases. Your donation to this fund will help pro-

vide unconditional support to persons experiencing men-

tal pain and those struggling toward recovery. If you wish

to make a contribution to this fund, enter a dollar amount.

Line 1j

Alabama Firefighters Annuity and

Benefit Fund

Your donations to this fund will be used to provide

retirement, disability and death benefits to firefighters

who are registered with this fund. If you wish to make a

contribution to this fund, enter a dollar amount.

Line 1k

Alabama Breast and Cervical Cancer

Research Program

The University of Alabama at Birmingham’s Com-

prehensive Cancer Center is a nationally funded leader

in breast and cervical research providing cutting edge

clinical care to the people of Alabama. Your donation to

this fund will help in the fight against breast and cervical

cancer. If you wish to make a contribution to this fund,

enter a dollar amount.

Line 1l

Victims of Violence Assistance

Donations to this fund will be used to provide serv-

ices and aid to victims of crime. If you wish to make a

contribution to this fund, enter a dollar amount.

Line 1m

Alabama Military Support Foundation

This fund was established to promote better relations

between employers and National Guard/Reserve

members. If you wish to make a contribution to this fund,

enter a dollar amount.

Line 1n

Alabama Veterinary Medical

Foundation Spay/Neuter Program

This fund provides assistance to low income resi-

dents to spay or neuter their dog or cat. If you wish to

make a contribution to this program, enter a dollar

amount.

Line 1o

Cancer Research Institute

This fund was established to improve cancer survival

rates for patients through research aimed at increasing

prevention and treatment. If you wish to make a contri-

bution to this program, enter a dollar amount.

Line 1p

Alabama Association of

Rescue Squads

This fund provides training to member rescue squads

and inspections to insure that member’s equipment and

buildings meet standards. If you wish to make a contri-

bution to this program, enter a dollar amount.

Line 1q

USS Alabama Battleship Commission

Donations to this fund will help in the preservation of

the USS Alabama Battleship Memorial Park for future

generations and to memorialize our Veterans of all

branches of the US Armed Services. If you wish to make

a contribution to this program, enter a dollar amount.

Line 1r

Children First Trust Fund

Your donations to this fund will go toward ensuring

that all of Alabama’s children are prepared for school

success and lifelong learning through voluntary, diverse,

high-quality early childhood programs. If you wish to

make a contribution to this program, enter a dollar

Page 22

amount.

Instructions For

Schedule D

Gain or (Loss) From Sale of

Real Estate, Stocks, Bonds,

Mutual Funds, Capital Gains, etc.

Purpose of Schedule

Use Schedule D (Form 40) to report the sale of real

estate, stocks, bonds, etc.

Enter all sales for the entire year if you were a resi-

dent of Alabama for the entire year. If you were a resi-

dent of Alabama for only a part of the year, you should

report all sales made during your period of residence.

If you sold property located in Alabama after you

ceased to be a resident of Alabama, you should report

the sales on Form 40NR, Nonresident Alabama Income

Tax Return.

Under Alabama law the entire gain is taxable, and

the entire loss is deductible in the year in which it occurs.

Mutual Funds. If you received a mutual fund or bro-

kerage statement reporting capital or ordinary gains, you

must include these amounts on Schedule D. List the mu-

tual fund or brokerage firm’s name in Column (a) Kind of

Property and the net capital or ordinary gains in Column

(h), Net Profit or (Loss).

Gain From Sale of a Personal Residence. If you

sold your personal residence, any gain realized is tax-

able to the same extent as reported on your federal

return.

NOTE: A loss on the sale of a personal residence is

NOT deductible.

Gain or (Loss) From Sale of Business Prop er ty.

If you sold business property use Schedule D to report

the net gain (or loss). You should complete Federal Form

4797 and attach a copy to your Alabama return.

State the following facts: (a) For real estate (in-

cluding owner-occupied residence) – location and de-

scription of land and improvements; (b) for bonds or

other evidence of indebtedness – name of issuing cor-

poration, particular issue, denomination, and amount; (c)

for stocks – name of corporation, class of stock, number

of shares, and capital changes affecting basis (includ-

ing nontaxable distributions). If more space is needed,

use separate sheets with identical columnar headings

(a) through (h) inclusive.

Cost or Other Basis. Act 85-515, known as the Cor-

porate Income Tax Act of 1985, conformed certain rules

concerning the determination of basis in assets acquired

to the federal income tax rules.

The basis for computing gain or loss from the sale

or other disposition of property will usually be the cost

of such property. You may have to use a basis other than

actual cost if you acquired the property by bequest, gift,

or involuntary conversion. If you do not use cash cost,

please attach an explanation of your basis.

The basis of property acquired prior to December

31, 1932, shall be the fair market value on December

31, 1932.

Gifts or Transfer in Trust. The basis of property ac-

quired by gift or transfer in trust depends upon the date

acquired.

If property was acquired by gift or transfer in trust on

or after December 31, 1932 and prior to March 15,

1985, the basis shall be the fair market value on the date

of acquisition.

If acquired by gift on or after March 15, 1985, the

basis shall be the same as it would be in the hands of the

donor or the preceding owner by whom it was not ac-

quired by gift (except that if such basis is greater than

the fair market value of the property at the time of the

gift, then for the purpose of determining loss, the basis

shall be the fair market value).

If the property was acquired by a transfer in trust

(other than a transfer in trust by gift, bequest, or devise)

on or after March 15, 1985, the basis shall be the same

as it would be in the hands of the grantor, increased in

the amount of gain, or decreased in the amount of loss,

recognized to the grantor of such transfer.

Property Transmitted at Death. Basis shall be the

fair and reasonable market value of the property at the

time of death of the decedent.

The value of property as of the date of the decedent’s

death as appraised for the purpose of the federal estate

tax or the alternate value as appraised for such purpose,

whichever is applicable, shall be deemed to be its fair

market value for Alabama income tax purposes.

Involuntary Conversion. If a taxpayer elects to de-

termine gain under 26 U.S.C. §1033 (relating to invol-

untary conversions), the amount of gain recognized for

Alabama purposes shall be determined in accordance

with the same federal statute.

Installment Sales. Alabama law was changed to

conform the Alabama code to the federal law regarding

the installment method of reporting income. For taxable

years beginning after December 31, 1984, income aris-

ing from an installment sale shall be reported in accor-

dance with Internal Revenue Code Section 453 with the

exception of 453(i) which deals with the recognition of

recapture income.

Sales of property under revolving credit plans and

sales of stock, securities, and other property traded on

established markets can no longer be reported on the

installment method effective for sales made after 1987.

Instructions For

Schedule E

Supplemental Income

Purpose of Schedule

Use Schedule E to report income or (loss) from rents,

royalties, partnerships, S corporations, estates, and

trusts.

Part I

Rental and Royalty Income or (Loss)

If you receive rent from property owned or controlled

by you, or royalties from copyrights, mineral leases, and

similar rights, report the total amount received in Part I,

columns (A) through (C). If property other than cash was

received as rent, its fair market value should be reported.

Line 1. Indicate the kind of rental real estate prop-

erty you rented out (brick house, apartment complex,

etc). Include the street address, city, or town, and state,

and your percentage of ownership in the property if less

than 100%.

Line 2. Check “Yes” if you or your family used the

unit this year for personal purposes more than the

greater of: 14 days; or 10% of the total days it was rented

to others at a fair rental price. Other wise, check “No.”

Lines 3 & 4. If you receive rent from property owned

or controlled by you, or royalties from copyrights, min-

eral leases, and similar rights, report the total amount

received in Part I, columns (A) through (C). If property

other than cash was received as rent, its fair market

value should be reported.

Lines 5-18. Enter your rental and royalty expenses

for each property in the appropriate column. You can

deduct all ordinary and necessary expenses, such as

taxes, interest, repairs, insurance, management fees,

and agent’s commissions. Do Not deduct the value of

your own labor or amounts paid for capital investments

or capital improvements.

Line 20 Depreciation. A reasonable allowance for

the exhaustion, wear, and obsolescence of property

used in a trade or business, or of property held by the

taxpayer for the production of income shall be allowed as

a depreciation deduction. The allowance does not apply

to inventories or stock-in-trade nor to land apart from the

improvements or physical development added to it.

Depreciation computed using the Accelerated Cost

Recovery System for assets placed in service on or after

January 1, 1981, and before January 1, 1987, in the

same manner with the same limitations provided for fed-

eral income tax returns will be considered to be a “rea-

sonable allowance” for Alabama purposes.

For assets placed in service after December 31,

1986, depreciation using the Modified Accelerated Cost

Recovery System provided for in I.R.C. §168 (as modi-

fied by §201(a) of P.L. 99-514) will be considered a rea-

sonable allowance for depreciation.

For taxable years beginning after December 31,

1989, Alabama will allow the depreciation allowed by

Federal 26 U.S.C. §179.

Depletion. A depletion expense deduction is allow-

able in computing net royalty income from mines, oil

wells, and gas wells.

In the case of oil and gas wells, the allowance for de-

pletion shall be 12 percent of the gross income from the

property during the taxable year, excluding from such

gross income an amount equal to any rents or royalties

paid or incurred by the taxpayer in respect to the prop-

erty. Such amounts shall not exceed 50 percent of the

net income of the taxpayer, computed without allowance

for depletion, from the property, except that in no case

shall the depletion allowance be less than the amount

allowable under federal income tax law.

Part II

Income or (Loss) From Partnerships,

S Corporations, Estates, and Trusts

If you received income from a partnership, S corpo-

ration, estate, or trust, the amounts should be reported

in Part II, column (j). The name and address must be

given in column (g) showing the source of the income

received. Check column (h), and enter the FEIN in

column (i).

Partnerships. A partnership does not pay income

tax in the firm’s name. If you are a member of a part-

nership or joint venture, include in this part your share of

the partnership income (whether you received it or not)

or net loss (not to exceed your basis) for the partnership

tax year that ends during the year covered by your re-

turn. You should receive a Schedule K-1 from the part-

nership advising you of the amount to report.

S Corporations. An “Alabama S corporation” is a

corporation with respect to which an election under 26

U.S.C. §1362 is in effect.

If you are a shareholder of an S corporation, you

should receive a Schedule K-1 from the S corporation.

Page 23

Page 24

Report your pro rata share of the income (whether you

received it or not) or net loss (not to exceed your

basis) of the corporation as shown on your Schedule

K-1.

Information from your partnership or S corporation

K-1’s should be reported as follows:

Line F. Pass-through entity owners who are indi-

viduals would claim this amount on Schedule OC of

Form 40 or Form 40NR. Refer to Schedule K-1 In-

structions on page 1, Line F instructions for applicable

codes and ordering of credits.

Line G. Pass-through entity owners that are indi-

viduals would report this amount on Schedule E of the

Alabama Form 40 or Alabama Form 40NR.

Line H. Pass-through entity owners that are indi-

viduals would report this amount on Schedule E of the

Alabama Form 40 or Alabama Form 40NR.

Line I. Partnerships K-1 only: Pass-through entity

owners that are individuals would report this amount on

Schedule E of the Alabama Form 40 or Alabama Form

40NR.

Line J. Pass-through entity owners that are indi-

viduals would report this amount on the appropriate

schedule of the Alabama Form 40 or Alabama Form

40NR filed by the individual, depending upon the na-

ture of the portfolio income. Accompanying the Ala-

bama Schedule K-1 should be an explanation of the

different types and amounts of portfolio income mak-

ing up the amount on Line J.

Line K. Pass-through entity owners that are indi-

viduals would report this amount on Schedule E of the

Alabama Form 40 or Alabama Form 40NR.

Line L. Pass-through entity owners that are indi-

viduals would report this amount on Schedule E of the

Alabama Form 40 or Alabama Form 40NR.

Line M. Pass-through entity owners that are indi-

viduals would report or claim these items on the ap-

propriate schedule of the Alabama Form 40 or Alabama

Form 40NR, filed by the individual, depending upon the

nature of the nonbusiness item. Accompanying the Ala-

bama Schedule K-1 should be an explanation of the

different types and amounts of other separately stated

business items making up the amount on Line M.

Line N. Pass-through entity owners that are indi-

viduals would claim this amount on the Form 4562, De-

preciation and Amortization, which accompanies the

individual’s Alabama Form 40 or Alabama Form 40NR.

Line O. Pass-through entity owners that are indi-

viduals would claim this amount on Schedule A of the

Alabama Form 40 or Alabama Form 40NR.

Line P. Pass-through entity owners that are indi-

viduals would report this amount on the Alabama Form

4952A that accompanies the individuals Alabama Form

40 or Alabama Form 40NR.

Line Q. Pass-through entity owners that are indi-

viduals would report or claim these items on the ap-

propriate schedule of the Alabama Form 40 or Alabama

Form 40NR, filed by the individual, depending upon the

nature of the other deductions.

Line R. Pass-through entity owners that are indi-

viduals should claim this amount on Schedule E of the

Alabama Form 40 or Alabama Form 40NR. Accompa-

nying the Alabama Schedule K-1 should be a compu-

tation of the amount reported on Line R. Alabama

income tax law concerning oil and gas depletion differs

from the federal law. Care should be exercised in claim-

ing this deduction to ensure that the proper amount is

deducted.

Line S. Pass-through entity owners that are indi-

viduals would claim this amount on the Form 4684 that

accompanies the Alabama Form 40 or Alabama Form

40NR.

Line T. Pass-through entity owners that are indi-

viduals are encouraged to disclose the amount of Ala-

bama exempt income on the Alabama Form 40 or

Alabama Form 40NR, filed by the individual. Accom-

panying the Alabama Schedule K-1 should be an ex-

planation showing the different types of Alabama

exempt income items and amounts making up the

amount reported on Line T.

Line U. Pass-through entity owners that are indi-

viduals are encouraged to disclose the amount of nond-

eductible expenses on the Alabama Form 40 or

Alabama Form 40NR, filed by the individual.

Line V. Pass-through entity owners that are indi-

viduals would report the portion of this amount that rep-

resents reportable income on the Schedule D

accompanying the Alabama Form 40 or Alabama Form

40NR. Accompanying the Alabama Schedule K-1

should be a detailed explanation of the amount on Line

Line W. Pass-through entity owners that are indi-

viduals would report this amount on the Alabama Form

4952A that accompanies the individuals Alabama Form

40 or Alabama Form 40NR.

Line X. Pass-through entity owners that are indi-

viduals would report this amount on the Alabama Form

4952A that accompanies the individuals Alabama Form

40 or Alabama Form 40NR.

Line Y. Pass-through entity owners that are indi-

viduals would report or claim these items on the ap-

propriate schedule of the Alabama Form 40 or Alabama

Form 40NR, filed by the individual, depending upon the

nature of the other items. Accompanying the Alabama

Schedule K-1 should be an explanation of the different

types and amounts of other items making up the

amount on Line Y.

Line Z. Pass-through entity owners that are indi-

viduals would claim this amount on the Alabama Forms

40 and 40NR.

Line AA. S Corporation K-1 only: Pass-through en-

tity owners that are individuals would report this amount

on the Alabama Form 40 or Alabama Form 40NR.

Line AB. S Corporation K-1 only: Pass-through en-

tity owners that are individuals would report the portion

of this amount that represents reportable income on the

Schedule D accompanying the Alabama Form 40 or

Alabama Form 40NR. Accompanying the Alabama

Schedule K-1 should be a detailed explanation of the

amount on Line AB.

Line AC. S Corporation K-1 only: These dividends

should be reported to shareholders on Form 1099-DIV.

Pass-through entity owners that are individuals would

report this amount on the appropriate schedule of the

Alabama Form 40 or Alabama Form 40NR filed by the

individual. Pass-through entity owners that are individ-

uals would report this amount on the Alabama Form 40

or Alabama Form 40NR.

Estates and Trusts. If you are a beneficiary of an

estate or trust, you should receive a statement from the

fiduciary advising you of the amount to report. Do not

attach the statement to your return. Keep it for your

records. Report your taxable part of the income

(whether you received it or not) in Part II.

NOTE: A loss from an irrevocable trust cannot be

claimed on Schedule E part II. See administrative rule

810-3-25-.05(8)(b)

Page 25

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

Under $1,000

05000

50 100 1 1

100 200 3 3

200 300 5 5

300 400 7 7

400 500 9 9

500 600 12 11

600 700 16 13

700 800 20 15

800 900 24 17

900 1,000 28 19

1,000

1,000 1,100 32 22

1,100 1,200 36 26

1,200 1,300 40 30

1,300 1,400 44 34

1,400 1,500 48 38

1,500 1,600 52 42

1,600 1,700 56 46

1,700 1,800 60 50

1,800 1,900 64 54

1,900 2,000 68 58

2,000

2,000 2,100 72 62

2,100 2,200 76 66

2,200 2,300 80 70

2,300 2,400 84 74

2,400 2,500 88 78

2,500 2,600 92 82

2,600 2,700 96 86

2,700 2,800 100 90

2,800 2,900 104 94

2,900 3,000 108 98

3,000

3,000 3,100 113 102

3,100 3,200 118 106

3,200 3,300 123 110

3,300 3,400 128 114

3,400 3,500 133 118

3,500 3,600 138 122

3,600 3,700 143 126

3,700 3,800 148 130

3,800 3,900 153 134

3,900 4,000 158 138

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

4,000

4,000 4,100 163 142

4,100 4,200 168 146

4,200 4,300 173 150

4,300 4,400 178 154

4,400 4,500 183 158

4,500 4,600 188 162

4,600 4,700 193 166

4,700 4,800 198 170

4,800 4,900 203 174

4,900 5,000 208 178

5,000

5,000 5,100 213 182

5,100 5,200 218 186

5,200 5,300 223 190

5,300 5,400 228 194

5,400 5,500 233 198

5,500 5,600 238 202

5,600 5,700 243 206

5,700 5,800 248 210

5,800 5,900 253 214

5,900 6,000 258 218

6,000

6,000 6,100 263 223

6,100 6,200 268 228

6,200 6,300 273 233

6,300 6,400 278 238

6,400 6,500 283 243

6,500 6,600 288 248

6,600 6,700 293 253

6,700 6,800 298 258

6,800 6,900 303 263

6,900 7,000 308 268

7,000

7,000 7,100 313 273

7,100 7,200 318 278

7,200 7,300 323 283

7,300 7,400 328 288

7,400 7,500 333 293

7,500 7,600 338 298

7,600 7,700 343 303

7,700 7,800 348 308

7,800 7,900 353 313

7,900 8,000 358 318

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

8,000

8,000 8,100 363 323

8,100 8,200 368 328

8,200 8,300 373 333

8,300 8,400 378 338

8,400 8,500 383 343

8,500 8,600 388 348

8,600 8,700 393 353

8,700 8,800 398 358

8,800 8,900 403 363

8,900 9,000 408 368

9,000

9,000 9,100 413 373

9,100 9,200 418 378

9,200 9,300 423 383

9,300 9,400 428 388

9,400 9,500 433 393

9,500 9,600 438 398

9,600 9,700 443 403

9,700 9,800 448 408

9,800 9,900 453 413

9,900 10,000 458 418

10,000

10,000 10,100 463 423

10,100 10,200 468 428

10,200 10,300 473 433

10,300 10,400 478 438

10,400 10,500 483 443

10,500 10,600 488 448

10,600 10,700 493 453

10,700 10,800 498 458

10,800 10,900 503 463

10,900 11,000 508 468

11,000

11,000 11,100 513 473

11,100 11,200 518 478

11,200 11,300 523 483

11,300 11,400 528 488

11,400 11,500 533 493

11,500 11,600 538 498

11,600 11,700 543 503

11,700 11,800 548 508

11,800 11,900 553 513

11,900 12,000 558 518

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

12,000

12,000 12,100 563 523

12,100 12,200 568 528

12,200 12,300 573 533

12,300 12,400 578 538

12,400 12,500 583 543

12,500 12,600 588 548

12,600 12,700 593 553

12,700 12,800 598 558

12,800 12,900 603 563

12,900 13,000 608 568

13,000

13,000 13,100 613 573

13,100 13,200 618 578

13,200 13,300 623 583

13,300 13,400 628 588

13,400 13,500 633 593

13,500 13,600 638 598

13,600 13,700 643 603

13,700 13,800 648 608

13,800 13,900 653 613

13,900 14,000 658 618

14,000

14,000 14,100 663 623

14,100 14,200 668 628

14,200 14,300 673 633

14,300 14,400 678 638

14,400 14,500 683 643

14,500 14,600 688 648

14,600 14,700 693 653

14,700 14,800 698 658

14,800 14,900 703 663

14,900 15,000 708 668

15,000

15,000 15,100 713 673

15,100 15,200 718 678

15,200 15,300 723 683

15,300 15,400 728 688

15,400 15,500 733 693

15,500 15,600 738 698

15,600 15,700 743 703

15,700 15,800 748 708

15,800 15,900 753 713

15,900 16,000 758 718

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is—

$23,000

23,000 23,100 1,113 1,073

23,100 23,200 1,118 1,078

23,200 23,300 1,123 1,083

23,300 23,400 1,128 1,088

23,400 23,500 1,133 1,093

EXAMPLE:

Mr. and Mrs. Brown are filing a joint return and

checked box 2 on their return. Their taxable income

on line 16 of Form 40 is $23,360. First, they find the

$23,300 - $23,400 income line. Next, they find the

column for married filing jointly and read down the

column. The amount shown where the income line

and the filing status column meet is $1,088. This is

the amount they must write on line 17 of Form 40.

Tax Table

(Form 40)

Based on Taxable Income

This tax table is based on the taxable income

shown on line 16 of Form 40 and the filing status

you checked on lines 1, 2, 3, or 4 of your return.

Page 26

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

16,000

16,000 16,100 763 723

16,100 16,200 768 728

16,200 16,300 773 733

16,300 16,400 778 738

16,400 16,500 783 743

16,500 16,600 788 748

16,600 16,700 793 753

16,700 16,800 798 758

16,800 16,900 803 763

16,900 17,000 808 768

17,000

17,000 17,100 813 773

17,100 17,200 818 778

17,200 17,300 823 783

17,300 17,400 828 788

17,400 17,500 833 793

17,500 17,600 838 798

17,600 17,700 843 803

17,700 17,800 848 808

17,800 17,900 853 813

17,900 18,000 858 818

18,000

18,000 18,100 863 823

18,100 18,200 868 828

18,200 18,300 873 833

18,300 18,400 878 838

18,400 18,500 883 843

18,500 18,600 888 848

18,600 18,700 893 853

18,700 18,800 898 858

18,800 18,900 903 863

18,900 19,000 908 868

19,000

19,000 19,100 913 873

19,100 19,200 918 878

19,200 19,300 923 883

19,300 19,400 928 888

19,400 19,500 933 893

19,500 19,600 938 898

19,600 19,700 943 903

19,700 19,800 948 908

19,800 19,900 953 913

19,900 20,000 958 918

20,000

20,000 20,100 963 923

20,100 20,200 968 928

20,200 20,300 973 933

20,300 20,400 978 938

20,400 20,500 983 943

20,500 20,600 988 948

20,600 20,700 993 953

20,700 20,800 998 958

20,800 20,900 1,003 963

20,900 21,000 1,008 968

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

21,000

21,000 21,100 1,013 973

21,100 21,200 1,018 978

21,200 21,300 1,023 983

21,300 21,400 1,028 988

21,400 21,500 1,033 993

21,500 21,600 1,038 998

21,600 21,700 1,043 1,003

21,700 21,800 1,048 1,008

21,800 21,900 1,053 1,013

21,900 22,000 1,058 1,018

22,000

22,000 22,100 1,063 1,023

22,100 22,200 1,068 1,028

22,200 22,300 1,073 1,033

22,300 22,400 1,078 1,038

22,400 22,500 1,083 1,043

22,500 22,600 1,088 1,048

22,600 22,700 1,093 1,053

22,700 22,800 1,098 1,058

22,800 22,900 1,103 1,063

22,900 23,000 1,108 1,068

23,000

23,000 23,100 1,113 1,073

23,100 23,200 1,118 1,078

23,200 23,300 1,123 1,083

23,300 23,400 1,128 1,088

23,400 23,500 1,133 1,093

23,500 23,600 1,138 1,098

23,600 23,700 1,143 1,103

23,700 23,800 1,148 1,108

23,800 23,900 1,153 1,113

23,900 24,000 1,158 1,118

24,000

24,000 24,100 1,163 1,123

24,100 24,200 1,168 1,128

24,200 24,300 1,173 1,133

24,300 24,400 1,178 1,138

24,400 24,500 1,183 1,143

24,500 24,600 1,188 1,148

24,600 24,700 1,193 1,153

24,700 24,800 1,198 1,158

24,800 24,900 1,203 1,163

24,900 25,000 1,208 1,168

25,000

25,000 25,100 1,213 1,173

25,100 25,200 1,218 1,178

25,200 25,300 1,223 1,183

25,300 25,400 1,228 1,188

25,400 25,500 1,233 1,193

25,500 25,600 1,238 1,198

25,600 25,700 1,243 1,203

25,700 25,800 1,248 1,208

25,800 25,900 1,253 1,213

25,900 26,000 1,258 1,218

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

26,000

26,000 26,100 1,263 1,223

26,100 26,200 1,268 1,228

26,200 26,300 1,273 1,233

26,300 26,400 1,278 1,238

26,400 26,500 1,283 1,243

26,500 26,600 1,288 1,248

26,600 26,700 1,293 1,253

26,700 26,800 1,298 1,258

26,800 26,900 1,303 1,263

26,900 27,000 1,308 1,268

27,000

27,000 27,100 1,313 1,273

27,100 27,200 1,318 1,278

27,200 27,300 1,323 1,283

27,300 27,400 1,328 1,288

27,400 27,500 1,333 1,293

27,500 27,600 1,338 1,298

27,600 27,700 1,343 1,303

27,700 27,800 1,348 1,308

27,800 27,900 1,353 1,313

27,900 28,000 1,358 1,318

28,000

28,000 28,100 1,363 1,323

28,100 28,200 1,368 1,328

28,200 28,300 1,373 1,333

28,300 28,400 1,378 1,338

28,400 28,500 1,383 1,343

28,500 28,600 1,388 1,348

28,600 28,700 1,393 1,353

28,700 28,800 1,398 1,358

28,800 28,900 1,403 1,363

28,900 29,000 1,408 1,368

29,000

29,000 29,100 1,413 1,373

29,100 29,200 1,418 1,378

29,200 29,300 1,423 1,383

29,300 29,400 1,428 1,388

29,400 29,500 1,433 1,393

29,500 29,600 1,438 1,398

29,600 29,700 1,443 1,403

29,700 29,800 1,448 1,408

29,800 29,900 1,453 1,413

29,900 30,000 1,458 1,418

30,000

30,000 30,100 1,463 1,423

30,100 30,200 1,468 1,428

30,200 30,300 1,473 1,433

30,300 30,400 1,478 1,438

30,400 30,500 1,483 1,443

30,500 30,600 1,488 1,448

30,600 30,700 1,493 1,453

30,700 30,800 1,498 1,458

30,800 30,900 1,503 1,463

30,900 31,000 1,508 1,468

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

31,000

31,000 31,100 1,513 1,473

31,100 31,200 1,518 1,478

31,200 31,300 1,523 1,483

31,300 31,400 1,528 1,488

31,400 31,500 1,533 1,493

31,500 31,600 1,538 1,498

31,600 31,700 1,543 1,503

31,700 31,800 1,548 1,508

31,800 31,900 1,553 1,513

31,900 32,000 1,558 1,518

32,000

32,000 32,100 1,563 1,523

32,100 32,200 1,568 1,528

32,200 32,300 1,573 1,533

32,300 32,400 1,578 1,538

32,400 32,500 1,583 1,543

32,500 32,600 1,588 1,548

32,600 32,700 1,593 1,553

32,700 32,800 1,598 1,558

32,800 32,900 1,603 1,563

32,900 33,000 1,608 1,568

33,000

33,000 33,100 1,613 1,573

33,100 33,200 1,618 1,578

33,200 33,300 1,623 1,583

33,300 33,400 1,628 1,588

33,400 33,500 1,633 1,593

33,500 33,600 1,638 1,598

33,600 33,700 1,643 1,603

33,700 33,800 1,648 1,608

33,800 33,900 1,653 1,613

33,900 34,000 1,658 1,618

34,000

34,000 34,100 1,663 1,623

34,100 34,200 1,668 1,628

34,200 34,300 1,673 1,633

34,300 34,400 1,678 1,638

34,400 34,500 1,683 1,643

34,500 34,600 1,688 1,648

34,600 34,700 1,693 1,653

34,700 34,800 1,698 1,658

34,800 34,900 1,703 1,663

34,900 35,000 1,708 1,668

35,000

35,000 35,100 1,713 1,673

35,100 35,200 1,718 1,678

35,200 35,300 1,723 1,683

35,300 35,400 1,728 1,688

35,400 35,500 1,733 1,693

35,500 35,600 1,738 1,698

35,600 35,700 1,743 1,703

35,700 35,800 1,748 1,708

35,800 35,900 1,753 1,713

35,900 36,000 1,758 1,718

Tax Table – Continued

Page 27

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

36,000

36,000 36,100 1,763 1,723

36,100 36,200 1,768 1,728

36,200 36,300 1,773 1,733

36,300 36,400 1,778 1,738

36,400 36,500 1,783 1,743

36,500 36,600 1,788 1,748

36,600 36,700 1,793 1,753

36,700 36,800 1,798 1,758

36,800 36,900 1,803 1,763

36,900 37,000 1,808 1,768

37,000

37,000 37,100 1,813 1,773

37,100 37,200 1,818 1,778

37,200 37,300 1,823 1,783

37,300 37,400 1,828 1,788

37,400 37,500 1,833 1,793

37,500 37,600 1,838 1,798

37,600 37,700 1,843 1,803

37,700 37,800 1,848 1,808

37,800 37,900 1,853 1,813

37,900 38,000 1,858 1,818

38,000

38,000 38,100 1,863 1,823

38,100 38,200 1,868 1,828

38,200 38,300 1,873 1,833

38,300 38,400 1,878 1,838

38,400 38,500 1,883 1,843

38,500 38,600 1,888 1,848

38,600 38,700 1,893 1,853

38,700 38,800 1,898 1,858

38,800 38,900 1,903 1,863

38,900 39,000 1,908 1,868

39,000

39,000 39,100 1,913 1,873

39,100 39,200 1,918 1,878

39,200 39,300 1,923 1,883

39,300 39,400 1,928 1,888

39,400 39,500 1,933 1,893

39,500 39,600 1,938 1,898

39,600 39,700 1,943 1,903

39,700 39,800 1,948 1,908

39,800 39,900 1,953 1,913

39,900 40,000 1,958 1,918

40,000

40,000 40,100 1,963 1,923

40,100 40,200 1,968 1,928

40,200 40,300 1,973 1,933

40,300 40,400 1,978 1,938

40,400 40,500 1,983 1,943

40,500 40,600 1,988 1,948

40,600 40,700 1,993 1,953

40,700 40,800 1,998 1,958

40,800 40,900 2,003 1,963

40,900 41,000 2,008 1,968

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

41,000

41,000 41,100 2,013 1,973

41,100 41,200 2,018 1,978

41,200 41,300 2,023 1,983

41,300 41,400 2,028 1,988

41,400 41,500 2,033 1,993

41,500 41,600 2,038 1,998

41,600 41,700 2,043 2,003

41,700 41,800 2,048 2,008

41,800 41,900 2,053 2,013

41,900 42,000 2,058 2,018

42,000

42,000 42,100 2,063 2,023

42,100 42,200 2,068 2,028

42,200 42,300 2,073 2,033

42,300 42,400 2,078 2,038

42,400 42,500 2,083 2,043

42,500 42,600 2,088 2,048

42,600 42,700 2,093 2,053

42,700 42,800 2,098 2,058

42,800 42,900 2,103 2,063

42,900 43,000 2,108 2,068

43,000

43,000 43,100 2,113 2,073

43,100 43,200 2,118 2,078

43,200 43,300 2,123 2,083

43,300 43,400 2,128 2,088

43,400 43,500 2,133 2,093

43,500 43,600 2,138 2,098

43,600 43,700 2,143 2,103

43,700 43,800 2,148 2,108

43,800 43,900 2,153 2,113

43,900 44,000 2,158 2,118

44,000

44,000 44,100 2,163 2,123

44,100 44,200 2,168 2,128

44,200 44,300 2,173 2,133

44,300 44,400 2,178 2,138

44,400 44,500 2,183 2,143

44,500 44,600 2,188 2,148

44,600 44,700 2,193 2,153

44,700 44,800 2,198 2,158

44,800 44,900 2,203 2,163

44,900 45,000 2,208 2,168

45,000

45,000 45,100 2,213 2,173

45,100 45,200 2,218 2,178

45,200 45,300 2,223 2,183

45,300 45,400 2,228 2,188

45,400 45,500 2,233 2,193

45,500 45,600 2,238 2,198

45,600 45,700 2,243 2,203

45,700 45,800 2,248 2,208

45,800 45,900 2,253 2,213

45,900 46,000 2,258 2,218

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

46,000

46,000 46,100 2,263 2,223

46,100 46,200 2,268 2,228

46,200 46,300 2,273 2,233

46,300 46,400 2,278 2,238

46,400 46,500 2,283 2,243

46,500 46,600 2,288 2,248

46,600 46,700 2,293 2,253

46,700 46,800 2,298 2,258

46,800 46,900 2,303 2,263

46,900 47,000 2,308 2,268

47,000

47,000 47,100 2,313 2,273

47,100 47,200 2,318 2,278

47,200 47,300 2,323 2,283

47,300 47,400 2,328 2,288

47,400 47,500 2,333 2,293

47,500 47,600 2,338 2,298

47,600 47,700 2,343 2,303

47,700 47,800 2,348 2,308

47,800 47,900 2,353 2,313

47,900 48,000 2,358 2,318

48,000

48,000 48,100 2,363 2,323

48,100 48,200 2,368 2,328

48,200 48,300 2,373 2,333

48,300 48,400 2,378 2,338

48,400 48,500 2,383 2,343

48,500 48,600 2,388 2,348

48,600 48,700 2,393 2,353

48,700 48,800 2,398 2,358

48,800 48,900 2,403 2,363

48,900 49,000 2,408 2,368

49,000

49,000 49,100 2,413 2,373

49,100 49,200 2,418 2,378

49,200 49,300 2,423 2,383

49,300 49,400 2,428 2,388

49,400 49,500 2,433 2,393

49,500 49,600 2,438 2,398

49,600 49,700 2,443 2,403

49,700 49,800 2,448 2,408

49,800 49,900 2,453 2,413

49,900 50,000 2,458 2,418

50,000

50,000 50,100 2,463 2,423

50,100 50,200 2,468 2,428

50,200 50,300 2,473 2,433

50,300 50,400 2,478 2,438

50,400 50,500 2,483 2,443

50,500 50,600 2,488 2,448

50,600 50,700 2,493 2,453

50,700 50,800 2,498 2,458

50,800 50,900 2,503 2,463

50,900 51,000 2,508 2,468

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

51,000

51,000 51,100 2,513 2,473

51,100 51,200 2,518 2,478

51,200 51,300 2,523 2,483

51,300 51,400 2,528 2,488

51,400 51,500 2,533 2,493

51,500 51,600 2,538 2,498

51,600 51,700 2,543 2,503

51,700 51,800 2,548 2,508

51,800 51,900 2,553 2,513

51,900 52,000 2,558 2,518

52,000

52,000 52,100 2,563 2,523

52,100 52,200 2,568 2,528

52,200 52,300 2,573 2,533

52,300 52,400 2,578 2,538

52,400 52,500 2,583 2,543

52,500 52,600 2,588 2,548

52,600 52,700 2,593 2,553

52,700 52,800 2,598 2,558

52,800 52,900 2,603 2,563

52,900 53,000 2,608 2,568

53,000

53,000 53,100 2,613 2,573

53,100 53,200 2,618 2,578

53,200 53,300 2,623 2,583

53,300 53,400 2,628 2,588

53,400 53,500 2,633 2,593

53,500 53,600 2,638 2,598

53,600 53,700 2,643 2,603

53,700 53,800 2,648 2,608

53,800 53,900 2,653 2,613

53,900 54,000 2,658 2,618

54,000

54,000 54,100 2,663 2,623

54,100 54,200 2,668 2,628

54,200 54,300 2,673 2,633

54,300 54,400 2,678 2,638

54,400 54,500 2,683 2,643

54,500 54,600 2,688 2,648

54,600 54,700 2,693 2,653

54,700 54,800 2,698 2,658

54,800 54,900 2,703 2,663

54,900 55,000 2,708 2,668

55,000

55,000 55,100 2,713 2,673

55,100 55,200 2,718 2,678

55,200 55,300 2,723 2,683

55,300 55,400 2,728 2,688

55,400 55,500 2,733 2,693

55,500 55,600 2,738 2,698

55,600 55,700 2,743 2,703

55,700 55,800 2,748 2,708

55,800 55,900 2,753 2,713

55,900 56,000 2,758 2,718

Tax Table – Continued

Page 28

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

56,000

56,000 56,100 2,763 2,723

56,100 56,200 2,768 2,728

56,200 56,300 2,773 2,733

56,300 56,400 2,778 2,738

56,400 56,500 2,783 2,743

56,500 56,600 2,788 2,748

56,600 56,700 2,793 2,753

56,700 56,800 2,798 2,758

56,800 56,900 2,803 2,763

56,900 57,000 2,808 2,768

57,000

57,000 57,100 2,813 2,773

57,100 57,200 2,818 2,778

57,200 57,300 2,823 2,783

57,300 57,400 2,828 2,788

57,400 57,500 2,833 2,793

57,500 57,600 2,838 2,798

57,600 57,700 2,843 2,803

57,700 57,800 2,848 2,808

57,800 57,900 2,853 2,813

57,900 58,000 2,858 2,818

58,000

58,000 58,100 2,863 2,823

58,100 58,200 2,868 2,828

58,200 58,300 2,873 2,833

58,300 58,400 2,878 2,838

58,400 58,500 2,883 2,843

58,500 58,600 2,888 2,848

58,600 58,700 2,893 2,853

58,700 58,800 2,898 2,858

58,800 58,900 2,903 2,863

58,900 59,000 2,908 2,868

59,000

59,000 59,100 2,913 2,873

59,100 59,200 2,918 2,878

59,200 59,300 2,923 2,883

59,300 59,400 2,928 2,888

59,400 59,500 2,933 2,893

59,500 59,600 2,938 2,898

59,600 59,700 2,943 2,903

59,700 59,800 2,948 2,908

59,800 59,900 2,953 2,913

59,900 60,000 2,958 2,918

60,000

60,000 60,100 2,963 2,923

60,100 60,200 2,968 2,928

60,200 60,300 2,973 2,933

60,300 60,400 2,978 2,938

60,400 60,500 2,983 2,943

60,500 60,600 2,988 2,948

60,600 60,700 2,993 2,953

60,700 60,800 2,998 2,958

60,800 60,900 3,003 2,963

60,900 61,000 3,008 2,968

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

61,000

61,000 61,100 3,013 2,973

61,100 61,200 3,018 2,978

61,200 61,300 3,023 2,983

61,300 61,400 3,028 2,988

61,400 61,500 3,033 2,993

61,500 61,600 3,038 2,998

61,600 61,700 3,043 3,003

61,700 61,800 3,048 3,008

61,800 61,900 3,053 3,013

61,900 62,000 3,058 3,018

62,000

62,000 62,100 3,063 3,023

62,100 62,200 3,068 3,028

62,200 62,300 3,073 3,033

62,300 62,400 3,078 3,038

62,400 62,500 3,083 3,043

62,500 62,600 3,088 3,048

62,600 62,700 3,093 3,053

62,700 62,800 3,098 3,058

62,800 62,900 3,103 3,063

62,900 63,000 3,108 3,068

63,000

63,000 63,100 3,113 3,073

63,100 63,200 3,118 3,078

63,200 63,300 3,123 3,083

63,300 63,400 3,128 3,088

63,400 63,500 3,133 3,093

63,500 63,600 3,138 3,098

63,600 63,700 3,143 3,103

63,700 63,800 3,148 3,108

63,800 63,900 3,153 3,113

63,900 64,000 3,158 3,118

64,000

64,000 64,100 3,163 3,123

64,100 64,200 3,168 3,128

64,200 64,300 3,173 3,133

64,300 64,400 3,178 3,138

64,400 64,500 3,183 3,143

64,500 64,600 3,188 3,148

64,600 64,700 3,193 3,153

64,700 64,800 3,198 3,158

64,800 64,900 3,203 3,163

64,900 65,000 3,208 3,168

65,000

65,000 65,100 3,213 3,173

65,100 65,200 3,218 3,178

65,200 65,300 3,223 3,183

65,300 65,400 3,228 3,188

65,400 65,500 3,233 3,193

65,500 65,600 3,238 3,198

65,600 65,700 3,243 3,203

65,700 65,800 3,248 3,208

65,800 65,900 3,253 3,213

65,900 66,000 3,258 3,218

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

66,000

66,000 66,100 3,263 3,223

66,100 66,200 3,268 3,228

66,200 66,300 3,273 3,233

66,300 66,400 3,278 3,238

66,400 66,500 3,283 3,243

66,500 66,600 3,288 3,248

66,600 66,700 3,293 3,253

66,700 66,800 3,298 3,258

66,800 66,900 3,303 3,263

66,900 67,000 3,308 3,268

67,000

67,000 67,100 3,313 3,273

67,100 67,200 3,318 3,278

67,200 67,300 3,323 3,283

67,300 67,400 3,328 3,288

67,400 67,500 3,333 3,293

67,500 67,600 3,338 3,298

67,600 67,700 3,343 3,303

67,700 67,800 3,348 3,308

67,800 67,900 3,353 3,313

67,900 68,000 3,358 3,318

68,000

68,000 68,100 3,363 3,323

68,100 68,200 3,368 3,328

68,200 68,300 3,373 3,333

68,300 68,400 3,378 3,338

68,400 68,500 3,383 3,343

68,500 68,600 3,388 3,348

68,600 68,700 3,393 3,353

68,700 68,800 3,398 3,358

68,800 68,900 3,403 3,363

68,900 69,000 3,408 3,368

69,000

69,000 69,100 3,413 3,373

69,100 69,200 3,418 3,378

69,200 69,300 3,423 3,383

69,300 69,400 3,428 3,388

69,400 69,500 3,433 3,393

69,500 69,600 3,438 3,398

69,600 69,700 3,443 3,403

69,700 69,800 3,448 3,408

69,800 69,900 3,453 3,413

69,900 70,000 3,458 3,418

70,000

70,000 70,100 3,463 3,423

70,100 70,200 3,468 3,428

70,200 70,300 3,473 3,433

70,300 70,400 3,478 3,438

70,400 70,500 3,483 3,443

70,500 70,600 3,488 3,448

70,600 70,700 3,493 3,453

70,700 70,800 3,498 3,458

70,800 70,900 3,503 3,463

70,900 71,000 3,508 3,468

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

71,000

71,000 71,100 3,513 3,473

71,100 71,200 3,518 3,478

71,200 71,300 3,523 3,483

71,300 71,400 3,528 3,488

71,400 71,500 3,533 3,493

71,500 71,600 3,538 3,498

71,600 71,700 3,543 3,503

71,700 71,800 3,548 3,508

71,800 71,900 3,553 3,513

71,900 72,000 3,558 3,518

72,000

72,000 72,100 3,563 3,523

72,100 72,200 3,568 3,528

72,200 72,300 3,573 3,533

72,300 72,400 3,578 3,538

72,400 72,500 3,583 3,543

72,500 72,600 3,588 3,548

72,600 72,700 3,593 3,553

72,700 72,800 3,598 3,558

72,800 72,900 3,603 3,563

72,900 73,000 3,608 3,568

73,000

73,000 73,100 3,613 3,573

73,100 73,200 3,618 3,578

73,200 73,300 3,623 3,583

73,300 73,400 3,628 3,588

73,400 73,500 3,633 3,593

73,500 73,600 3,638 3,598

73,600 73,700 3,643 3,603

73,700 73,800 3,648 3,608

73,800 73,900 3,653 3,613

73,900 74,000 3,658 3,618

74,000

74,000 74,100 3,663 3,623

74,100 74,200 3,668 3,628

74,200 74,300 3,673 3,633

74,300 74,400 3,678 3,638

74,400 74,500 3,683 3,643

74,500 74,600 3,688 3,648

74,600 74,700 3,693 3,653

74,700 74,800 3,698 3,658

74,800 74,900 3,703 3,663

74,900 75,000 3,708 3,668

75,000

75,000 75,100 3,713 3,673

75,100 75,200 3,718 3,678

75,200 75,300 3,723 3,683

75,300 75,400 3,728 3,688

75,400 75,500 3,733 3,693

75,500 75,600 3,738 3,698

75,600 75,700 3,743 3,703

75,700 75,800 3,748 3,708

75,800 75,900 3,753 3,713

75,900 76,000 3,758 3,718

Tax Table – Continued

Page 29

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

76,000

76,000 76,100 3,763 3,723

76,100 76,200 3,768 3,728

76,200 76,300 3,773 3,733

76,300 76,400 3,778 3,738

76,400 76,500 3,783 3,743

76,500 76,600 3,788 3,748

76,600 76,700 3,793 3,753

76,700 76,800 3,798 3,758

76,800 76,900 3,803 3,763

76,900 77,000 3,808 3,768

77,000

77,000 77,100 3,813 3,773

77,100 77,200 3,818 3,778

77,200 77,300 3,823 3,783

77,300 77,400 3,828 3,788

77,400 77,500 3,833 3,793

77,500 77,600 3,838 3,798

77,600 77,700 3,843 3,803

77,700 77,800 3,848 3,808

77,800 77,900 3,853 3,813

77,900 78,000 3,858 3,818

78,000

78,000 78,100 3,863 3,823

78,100 78,200 3,868 3,828

78,200 78,300 3,873 3,833

78,300 78,400 3,878 3,838

78,400 78,500 3,883 3,843

78,500 78,600 3,888 3,848

78,600 78,700 3,893 3,853

78,700 78,800 3,898 3,858

78,800 78,900 3,903 3,863

78,900 79,000 3,908 3,868

79,000

79,000 79,100 3,913 3,873

79,100 79,200 3,918 3,878

79,200 79,300 3,923 3,883

79,300 79,400 3,928 3,888

79,400 79,500 3,933 3,893

79,500 79,600 3,938 3,898

79,600 79,700 3,943 3,903

79,700 79,800 3,948 3,908

79,800 79,900 3,953 3,913

79,900 80,000 3,958 3,918

80,000

80,000 80,100 3,963 3,923

80,100 80,200 3,968 3,928

80,200 80,300 3,973 3,933

80,300 80,400 3,978 3,938

80,400 80,500 3,983 3,943

80,500 80,600 3,988 3,948

80,600 80,700 3,993 3,953

80,700 80,800 3,998 3,958

80,800 80,900 4,003 3,963

80,900 81,000 4,008 3,968

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

81,000

81,000 81,100 4,013 3,973

81,100 81,200 4,018 3,978

81,200 81,300 4,023 3,983

81,300 81,400 4,028 3,988

81,400 81,500 4,033 3,993

81,500 81,600 4,038 3,998

81,600 81,700 4,043 4,003

81,700 81,800 4,048 4,008

81,800 81,900 4,053 4,013

81,900 82,000 4,058 4,018

82,000

82,000 82,100 4,063 4,023

82,100 82,200 4,068 4,028

82,200 82,300 4,073 4,033

82,300 82,400 4,078 4,038

82,400 82,500 4,083 4,043

82,500 82,600 4,088 4,048

82,600 82,700 4,093 4,053

82,700 82,800 4,098 4,058

82,800 82,900 4,103 4,063

82,900 83,000 4,108 4,068

83,000

83,000 83,100 4,113 4,073

83,100 83,200 4,118 4,078

83,200 83,300 4,123 4,083

83,300 83,400 4,128 4,088

83,400 83,500 4,133 4,093

83,500 83,600 4,138 4,098

83,600 83,700 4,143 4,103

83,700 83,800 4,148 4,108

83,800 83,900 4,153 4,113

83,900 84,000 4,158 4,118

84,000

84,000 84,100 4,163 4,123

84,100 84,200 4,168 4,128

84,200 84,300 4,173 4,133

84,300 84,400 4,178 4,138

84,400 84,500 4,183 4,143

84,500 84,600 4,188 4,148

84,600 84,700 4,193 4,153

84,700 84,800 4,198 4,158

84,800 84,900 4,203 4,163

84,900 85,000 4,208 4,168

85,000

85,000 85,100 4,213 4,173

85,100 85,200 4,218 4,178

85,200 85,300 4,223 4,183

85,300 85,400 4,228 4,188

85,400 85,500 4,233 4,193

85,500 85,600 4,238 4,198

85,600 85,700 4,243 4,203

85,700 85,800 4,248 4,208

85,800 85,900 4,253 4,213

85,900 86,000 4,258 4,218

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

86,000

86,000 86,100 4,263 4,223

86,100 86,200 4,268 4,228

86,200 86,300 4,273 4,233

86,300 86,400 4,278 4,238

86,400 86,500 4,283 4,243

86,500 86,600 4,288 4,248

86,600 86,700 4,293 4,253

86,700 86,800 4,298 4,258

86,800 86,900 4,303 4,263

86,900 87,000 4,308 4,268

87,000

87,000 87,100 4,313 4,273

87,100 87,200 4,318 4,278

87,200 87,300 4,323 4,283

87,300 87,400 4,328 4,288

87,400 87,500 4,333 4,293

87,500 87,600 4,338 4,298

87,600 87,700 4,343 4,303

87,700 87,800 4,348 4,308

87,800 87,900 4,353 4,313

87,900 88,000 4,358 4,318

88,000

88,000 88,100 4,363 4,323

88,100 88,200 4,368 4,328

88,200 88,300 4,373 4,333

88,300 88,400 4,378 4,338

88,400 88,500 4,383 4,343

88,500 88,600 4,388 4,348

88,600 88,700 4,393 4,353

88,700 88,800 4,398 4,358

88,800 88,900 4,403 4,363

88,900 89,000 4,408 4,368

89,000

89,000 89,100 4,413 4,373

89,100 89,200 4,418 4,378

89,200 89,300 4,423 4,383

89,300 89,400 4,428 4,388

89,400 89,500 4,433 4,393

89,500 89,600 4,438 4,398

89,600 89,700 4,443 4,403

89,700 89,800 4,448 4,408

89,800 89,900 4,453 4,413

89,900 90,000 4,458 4,418

90,000

90,000 90,100 4,463 4,423

90,100 90,200 4,468 4,428

90,200 90,300 4,473 4,433

90,300 90,400 4,478 4,438

90,400 90,500 4,483 4,443

90,500 90,600 4,488 4,448

90,600 90,700 4,493 4,453

90,700 90,800 4,498 4,458

90,800 90,900 4,503 4,463

90,900 91,000 4,508 4,468

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

91,000

91,000 91,100 4,513 4,473

91,100 91,200 4,518 4,478

91,200 91,300 4,523 4,483

91,300 91,400 4,528 4,488

91,400 91,500 4,533 4,493

91,500 91,600 4,538 4,498

91,600 91,700 4,543 4,503

91,700 91,800 4,548 4,508

91,800 91,900 4,553 4,513

91,900 92,000 4,558 4,518

92,000

92,000 92,100 4,563 4,523

92,100 92,200 4,568 4,528

92,200 92,300 4,573 4,533

92,300 92,400 4,578 4,538

92,400 92,500 4,583 4,543

92,500 92,600 4,588 4,548

92,600 92,700 4,593 4,553

92,700 92,800 4,598 4,558

92,800 92,900 4,603 4,563

92,900 93,000 4,608 4,568

93,000

93,000 93,100 4,613 4,573

93,100 93,200 4,618 4,578

93,200 93,300 4,623 4,583

93,300 93,400 4,628 4,588

93,400 93,500 4,633 4,593

93,500 93,600 4,638 4,598

93,600 93,700 4,643 4,603

93,700 93,800 4,648 4,608

93,800 93,900 4,653 4,613

93,900 94,000 4,658 4,618

94,000

94,000 94,100 4,663 4,623

94,100 94,200 4,668 4,628

94,200 94,300 4,673 4,633

94,300 94,400 4,678 4,638

94,400 94,500 4,683 4,643

94,500 94,600 4,688 4,648

94,600 94,700 4,693 4,653

94,700 94,800 4,698 4,658

94,800 94,900 4,703 4,663

94,900 95,000 4,708 4,668

95,000

95,000 95,100 4,713 4,673

95,100 95,200 4,718 4,678

95,200 95,300 4,723 4,683

95,300 95,400 4,728 4,688

95,400 95,500 4,733 4,693

95,500 95,600 4,738 4,698

95,600 95,700 4,743 4,703

95,700 95,800 4,748 4,708

95,800 95,900 4,753 4,713

95,900 96,000 4,758 4,718

Tax Table – Continued

Page 30

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

96,000

96,000 96,100 4,763 4,723

96,100 96,200 4,768 4,728

96,200 96,300 4,773 4,733

96,300 96,400 4,778 4,738

96,400 96,500 4,783 4,743

96,500 96,600 4,788 4,748

96,600 96,700 4,793 4,753

96,700 96,800 4,798 4,758

96,800 96,900 4,803 4,763

96,900 97,000 4,808 4,768

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

97,000

97,000 97,100 4,813 4,773

97,100 97,200 4,818 4,778

97,200 97,300 4,823 4,783

97,300 97,400 4,828 4,788

97,400 97,500 4,833 4,793

97,500 97,600 4,838 4,798

97,600 97,700 4,843 4,803

97,700 97,800 4,848 4,808

97,800 97,900 4,853 4,813

97,900 98,000 4,858 4,818

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

98,000

98,000 98,100 4,863 4,823

98,100 98,200 4,868 4,828

98,200 98,300 4,873 4,833

98,300 98,400 4,878 4,838

98,400 98,500 4,883 4,843

98,500 98,600 4,888 4,848

98,600 98,700 4,893 4,853

98,700 98,800 4,898 4,858

98,800 98,900 4,903 4,863

98,900 99,000 4,908 4,868

taxable And you are —

income is —

At But Single Married

least less

✱

filing

than Married jointly

filing

sepa-

rately

✱

Head of

family

Your tax is —

99,000

99,000 99,100 4,913 4,873

99,100 99,200 4,918 4,878

99,200 99,300 4,923 4,883

99,300 99,400 4,928 4,888

99,400 99,500 4,933 4,893

99,500 99,600 4,938 4,898

99,600 99,700 4,943 4,903

99,700 99,800 4,948 4,908

99,800 99,900 4,953 4,913

99,900 100,000 4,958 4,918

Tax Table – Continued

Over $100,000.00

If taxable income is over $100,000, use

the following worksheet to figure your

tax.

• Single

• Married filing separately

• Head of family

1 Enter taxable income . .

2 Less...............–100,000.00

3 Subtract line 2 from

line 1 ...............

4 Multiply line 3 by .05 . . x .05

5 Enter result here ......

6 Plus ...............+ 4,958.00

7 Add lines 5 and 6.

Your tax is ........

• Married filing jointly

1 Enter taxable income . .

2 Less...............–100,000.00

3 Subtract line 2 from

line 1 ...............

4 Multiply line 3 by .05 . . x .05

5 Enter result here ......

6 Plus .................+ 4,918.00

7 Add lines 5 and 6.

Your tax is ........

▼

Page 31

Federal Income Tax Deduction Worksheet

1 Enter the tax as shown on line 22 on 2023 Form 1040/Form 1040-SR/Form 1040NR. .................................

2 Net Investment Income Tax. Enter amount from line 17, 2023 Form 8960. ...........................................

3 Federal Tax. Add Lines 1 and 2. ..............................................................................

4a Earned Income Credit (EIC). Enter the amount from line 27 of 2023 Form 1040/Form 1040-SR.

4b Additional Child Tax Credit. Enter the amount from Line 28 of 2023 Form 1040/Form

1040-SR/1040-NR. ....................................................................

4c American Opportunity Credit. Enter the amount from line 29 of 2023 Form 1040/Form 1040-SR.

4d Credits from Forms 2439. Enter the amount from Schedule 3, Part II, line 13a of 2023

Form 1040/Form 1040-SR/Form1040NR. .........................................

5 Add lines 4a,b, c and d. ......................................................................................

6 Subtract line 5 from line 3. If amount is negative enter zero also enter on line 12 of Form 40, line 9 of Form 40A or page 2,

Part IV, line 4 of Form 40NR. .................................................................................

Page 32

My Alabama Taxes (MAT)

You can file your Alabama Resident and Non-Resident returns

online through My Alabama Taxes (MAT) at no charge.

The Alabama Department of Revenue offers several

methods for filing your Individual Income Tax Return.

Federal/State Electronic Filing Program

Your professional tax practitioner can file both your

Federal and State returns by using the E-File Program

or can print a 2-D Barcode for you.

Free Filing of

Federal/State Return

Free electronic filing of your Alabama

and Federal Income Tax Returns are provided for low

income wage earners, senior citizens, students, and active duty military

personnel. For more information on the qualifications, visit our website

at https://www.revenue.alabama.gov/individual-

corporate/individual-income-tax/individual-income-tax-electronic-fili

ng-options/.

Federal/State On-Line Filing Program

You can file your own Federal and State return on-line by

purchasing the program from a local retailer or going to

https://www.revenue.alabama.gov/individual-corporate/

approved-software-vendors/ to see a listing of Approved On-Line

Service Providers. If you do not

want to file electronically, these programs will print out a 2-D Barcode.

This option is available to all taxpayers filing an Alabama Individual Income tax

return. Please visit https://revenue.alabama.gov/services/my-alabama-taxes-sign-up/

to sign up and get started filling out your return.

2-D Barcode Filing Program

All the programs above should produce a 2-D

Barcode for you. Also, you can print a 2-D Barcode

by using our fillable Form 40 or Form 40NR which

you can obtain at

https://www.revenue.alabama.gov/

forms/. After

you fill out the form and print it, a 2-D Barcode will be

produced on the top of the form. You can still mail

your return, but use of the 2-D Barcode

will ensure faster processing.

OTHER FILING OPTIONS:

VITA/AARP/IMPACT ALABAMA

Free tax help and electronic filing of your Federal and State returns

for low to moderate income taxpayers, people age 60 and older

and military families is provided by the VITA, AARP, or IMPACT

ALABAMA volunteers. For more information, visit our website at

https://www.revenue.alabama.gov/individual-corporate/

To obtain instructions, schedules and forms visit our Web site at: www.revenue.alabama.gov. Additional booklets, forms, and schedules are listed below. Certain book-

lets may be obtained by visiting the Alabama Taxpayer Service Center nearest you.

BOOKLETS

Form 40 Booklet. This booklet contains the following forms and schedules with instructions: Form 40, Schedules A, B, DC, CR, D, E, W-2, DS, HOF, ATP, RS, and Form

40V.

Form 40NR Booklet. This booklet contains the following forms and schedules with instructions: Form 40NR, Schedules A, B, D, E, W-2, DS, HOF, RS, and Form 40V.

FORMS

Form 40 Individual Income Tax Return for full year residents of Alabama and also part-year residents of Alabama.

Form 40A Individual Income Tax Return (Short Form) for full year residents of Alabama.

Form 40NR Nonresident Individual Income Tax Return for nonresidents of Alabama.

Form 40ES to make estimated tax payments.

SCHEDULES

Schedule A, B, & DC – for itemized deductions, interest and dividend income, and donation check-offs.

Schedule CR – for computation of credit for taxes paid to other states.

Schedule D&E – for reporting income from the sale or exchange of capital assets, and for reporting income from rents, royalties, partnerships, estates, and trusts.

Schedule AAC – for computation of Alabama adoption tax credit.

Schedule AATC – for computation of the credit for transferring a student from a failing public school to a non-failing public school or non-public school.

Schedule DS – form must be completed to receive proper credit for dependents claimed on Form 40 and 40NR.

Schedule HOF – form must be completed to receive proper credit for head of family claimed on Form 40 and 40NR.

Schedule OC – for computation of individual tax credits.

Schedule W-2 – form must be completed to receive proper credit for Alabama income tax withheld on Forms 40A, 40, and 40NR.

Schedule CP – form must be completed to receive proper credit for Alabama composite payments withheld and Electing PTE Credits.

Schedule KRCC-I – for reporting the recipient’s share of Capital Credit for Individual Taxpayers.

Schedule ATP – for computation of Additional Taxes & Penalties.

Schedule HBC – form must be completed to receive proper credit for First Time Second Chance Home Buyer Deduction.

Schedule RS – form must be completed to report report fully or partially taxable pensions, annuities, IRA distributions and retirement distribution(s) exempt from Alabama

Income.

NOTE:

Alabama does not provide the following forms and schedules and requests that the appropriate federal schedule be used making the modifications as required by Alabama law.

Schedule C for reporting income from a personally owned business.

Schedule F for reporting income from farming.

Form 2106 for claiming employee business expenses.

Form 3903 for claiming moving expenses.

Form 4684 for reporting casualty and theft losses.

Form 4797 for reporting sale of business property.

Form 6252 for reporting installment sale income.

Form 8283 for reporting noncash contributions.

Page 33Page 33

How To Obtain Forms

Page 34