Outline
The Alabama 20S form serves as a crucial document for S corporations operating within the state, providing a framework for reporting income, deductions, and tax obligations. This form is specifically designed for the tax year running from January 1 to December 31, and it requires comprehensive financial disclosures, including total federal income, deductions, and assets. Key sections of the form include the computation of separately stated and nonseparately stated income, as well as the apportionment of income to Alabama, which is essential for determining the tax liability of corporations operating in multiple states. The Alabama 20S form also necessitates detailed information regarding shareholders, business operations, and any adjustments due to federal regulations. Additional schedules, such as those for tax credits and the allocation of nonbusiness income, further enhance the accuracy of the tax return. This structured approach ensures that corporations meet their state tax obligations while providing a clear overview of their financial status.
Sample - Alabama 20S Form
SCHEDULE A – Computation of Separately Stated and Nonseparately Stated Income / Tax
UNLESS A COPY OF FORM 1120S IS ATTACHED, THIS RETURN IS INCOMPLETE
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FORM
20S
Data Summary
Total federal income
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Total federal deductions
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Total assets as shown on Form 1120S
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Alabama Apportionment Factor from
Schedule C, line 26
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FEDERAL BUSINESS CODE NUMBER FEDERAL EMPLOYER IDENTIFICATION NUMBER
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NAME
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ADDRESS
CITY STATE 9-DIGIT ZIP CODE
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STATE OF INCORPORATION NATURE OF BUSINESS DATE QUALIFIED IN ALABAMA
NUMBER OF SHAREHOLDERS DURING
TAX YEAR
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Important
Check
applicable
box:
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Initial
Return
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Final
Return
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Amended
Return
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LABAMA
D
EPARTMENT OF
R
EVENUE
S Corporation Information/Tax Return
For the year January 1 – December 31, 2010, or other tax year beginning •_______________________, 2010, ending •_______________________, _________
2010
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Reconciliation
to Alabama
Basis
(see
instructions)
Separately
Stated Items
(Related to
Business
Income)
Tax Due,
Payments,
and
Credits
1 Federal Ordinary Income or (Loss) from trade or business activities .......................................
2 Net short-term and long-term capital gains – income or (loss) .........
3 Salaries and wages reduced for federal employment credits ..........
4 State and local net income taxes paid/(refund) ......................
5 Net income or (loss) from rental real estate activities .................
6 Net income or (loss) from other rental activities .....................
7 Net gain or (loss) under I.R.C. §1231
(other than casualty losses) .....
8 Adjustments due to the Federal Economic Stimulus Act of 2008
(attach schedule)................................................
9 Other reconciliation items
(attach schedule) ........................
10 Net reconciling items
(add lines 2 through 9)............................................................
11 Net Alabama nonseparately stated income or (loss)
(add line 1 and line 10) ................................
12 Contributions ...................................................
13 Oil and gas depletion ............................................
14 I.R.C. §179 expense deduction
(complete Schedule K)...............
15 Casualty losses .................................................
16 Portfolio income less expenses
(complete Schedule K)...............
17 Other separately stated items
(attach schedule) .....................
18 Net separately stated items
(add line 12 through 17).....................................................
19 Total separately stated and nonseparately stated items (add line 11 and line 18) ............................
20 Nonseparately Stated Income Allocated and Apportioned to Alabama from Schedule E, line 7 ................
21 ALABAMA INCOME TAX
(see instructions and attach schedule) ..........................................
22 Tax Payments, Credits, and Deferrals:
a. 2010 estimated tax payments and amounts applied
from 2009 return ..............................................
b. Automatic extension payments
(see instructions)..................
c. Payments prior to amendment
(original return or
Department adjustment)
.......................................
d. Tax credits
(from line 3, Schedule G) (see instructions) ............
e. Total payments
(add lines 22a, 22b, 22c and 22d) ....................................................
23 NET TAX DUE
(subtract line 22e from line 21) ..........................................................
24 Reductions/applications of overpayments
a. Penalties
(see instructions).....................................
b. Interest due
(computed on tax due only) .........................
c. Amount to be credited to 2011 estimated tax .....................
d. Total reductions/applications
(add lines 24a, 24b and 24c) .............................................
25 Amount to be refunded
(see instructions)...............................................................
26 TOTAL AMOUNT DUE ..............................................................................
If paying by check or money order, FORM BIT-V MUST ACCOMPANY PAYMENT
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If you paid electronically check here
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CHECK IF THE CORPORATION
OPERATES IN MORE THAN ONE STATE
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IF YOU FILED A RETURN FOR 2009 AND THE ABOVE
NAME AND ADDRESS IS DIFFERENT, CHECK HERE ......
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*1000012S*
SCHEDULE B – Allocation of Nonbusiness Income, Loss, and Expense
SCHEDULE C – Apportionment Factor Schedule. Do not complete if entity operates exclusively in Alabama.
FORM 20S – 2010 Page
2
Nonseparately stated items
1a
1b
1c
1d Total
(add lines 1a, 1b, and 1c)
Separately stated items
1e
1f
1g
1h Total
(add lines 1e, 1f, and 1g)
DIRECTLY ALLOCABLE ITEMS ALLOCABLE GROSS INCOME / LOSS RELATED EXPENSE NET OF RELATED EXPENSE
Column A Column B Column C Column D Column E Column F
Everywhere Alabama Everywhere Alabama Everywhere Alabama
(Col. A less Col. C) (Col. B less Col. D)
Identify by account name and amount all items of nonbusiness income, loss, and
expense removed from apportionable income and those items which are directly
allocable to Alabama. Adjustment(s) must also be made for any proration of
expenses under Alabama Income Tax Rule 810-27-1-4-.01, which states, “Any
allowable deduction that is ap pli ca ble to both business and nonbusiness income of
the taxpayer shall be prorated to each class of income in determining income
subject to tax as provided…”
(See instructions).
15 Alabama payroll factor — 15a ÷ 15b = 15c .......................................
1 Inventories
2 Land
3 Furniture and fixtures
4 Machinery and equipment
5 Buildings and leasehold improvements
6 IDB/IRB property (at cost)
7 Government property (at FMV)
8 •
9 Less Construction in progress (if included)
10 Totals
11 Average owned property (BOY + EOY ÷ 2)
12 Annual rental expense x8 = x8 =
13 Total average property (add line 11 and line 12) ............................. 13a ......................
14 Alabama property factor — 13a ÷ 13b = line 14 ........................................................................................
TANGIBLE PROPERTY AT COST FOR
PRODUCTION OF BUSINESS INCOME
SALARIES, WAGES, COMMISSIONS AND OTHER COMPENSATION
RELATED TO THE PRODUCTION OF BUSINESS INCOME
SALES
ALABAMA
BEGINNING OF YEAR END OF YEAR
EVERYWHERE
BEGINNING OF YEAR END OF YEAR
15a ALABAMA
13b
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15b EVERYWHERE
%
%
16 Destination sales.................................................................
17 Origin sales ......................................................................
18 Total gross receipts from sales ...................................................
19 Dividends ........................................................................
20 Interest ..........................................................................
21 Rents ............................................................................
22 Royalties.........................................................................
23 Gross proceeds from capital and ordinary gains...................................
24 Other •___________________________________ (Federal 1120S, line •_____ )
25 Alabama sales factor — 25a ÷ 25b = line 25c .....................................
26 Sum of lines 14, 15c, and 25c ÷ 3 = ALABAMA APPORTIONMENT FACTOR (Enter here and on line 4, Schedule E, page 3) ..........
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25a• 25b• 25c•
ALABAMA EVERYWHERE
15c
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*1000022S*
SCHEDULE D – Apportionment of Federal Income Tax
FORM 20S – 2010 Page
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SCHEDULE H – The Following Information Must Be Entered For This Return To Be Considered Complete
SCHEDULE G – Tax Credits (Caution – See Instructions)
SCHEDULE E – Apportionment and Allocation of Income to Alabama
SCHEDULE F – Alabama Accumulated Adjustments Account
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1 Enter the federal income tax from Federal Form 1120S .....
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2 Enter the Alabama income from line 7, Schedule E below, if applicable. (If corporation operates
exclusively in Alabama, do not complete lines 2-8.) ..............................................
3 Apportionment of separately stated items 3a 3b x % =
Apportionment Factor
Enter in line 3a the amount from line 18, Schedule A
(line 26, Schedule C)
4 Separately stated items allocated to Alabama (line 1h, Column F, Schedule B) ......................
5 Total
(add lines 2, 3c and 4)...................................................................
6 Adjusted total income
(add line 19, Schedule A to line 1h, Column E, Schedule B) ...................
7 Federal income tax apportionment factor (line 5 divided by line 6)...............................................................
8 Federal income tax apportioned to Alabama
(multiply line 1 by the percent on line 7)...............................................
1 Net Alabama nonseparately stated income or (loss) from line 11, Schedule A ............................................................
2 Nonseparately stated (income) or loss treated as nonbusiness income (line 1d, Column E, Schedule B)
– please enter income as a negative amount and losses as a positive amount ...........................................................
3 Apportionable income or (loss)
(add line 1 and line 2)....................................................................................
4 Apportionment ratio from line 26, Schedule C ...........................................................................................
5 Income or (loss) apportioned to Alabama
(multiply amount on line 3 by percent on line 4).................................................
6 Nonseparately stated income or (loss) allocated to Alabama as nonbusiness income
(Column F, line 1d, Schedule B) ....................
7 Nonseparately Stated Income Allocated and Apportioned to Alabama
(add lines 5 and 6). Also enter this amount on
line 2, Schedule D; line 20, Schedule A; and line 1, Schedule K .................................................................
1 Beginning balance (prior year ending balance) ................................................................................
2 Net Alabama nonseparately stated income or (loss) (line 11, Schedule A) ........................................................
3 Net separately stated items (line 18, Schedule A) .............................................................................
4 Federal income tax deduction
(line 1, Schedule D) ............................................................................
5 Separately stated nonbusiness items
(line 1h, Column E, Schedule B) ...........................................................
6 Other additions/(reductions)
(Do not include tax exempt income and related expenses) ............................................
7 Less distributions .........................................................................................................
8 Ending balance
(total appropriate lines) ......................................................................................
1 Employer Education Tax Credit.........................................................................................................
2 Coal Credit.............................................................................................................................
3 TOTAL
(add lines 1 and 2). Enter here and on line 22d, Schedule A. ....................................................................
1 Indicate tax accounting method used: •
Cash •
Accrual •
Other
2 Briefly describe your Alabama operations: •
3 Enter this company’s Alabama Withholding Tax Account No.: •
4 Person to contact for information concerning this return:
Name •
Telephone Number • ( ) Email Address
5 Location of the corporate records: •
6 Check if an Alabama business privilege tax return was filed for this entity: •
7 If the privilege tax return was filed using a different FEIN, please provide the name and FEIN used to file the return:
FEIN: • NAME:
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*1000032S*
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FORM 20S – 2010 Page 4
CHECK LIST
HAVE THE FOLLOWING FORMS BEEN ATTACHED TO THE FORM 20S:
ALABAMA SCHEDULE K-1 (one for each shareholder)
ALABAMA SCHEDULE NRA (if applicable)
FEDERAL FORM 1120S (entire form as filed with IRS)
FEDERAL FORM 1120S PROFORMA (if applicable)
FORM BIT-V (if applicable)
Please
Sign
Here
Paid
Preparer’s
Use Only
Preparer’s
Signature
Signature
of Officer
E.I. No. •
ZIP Code •
Email
Address
Date
•
Telephone No.
•( )
Preparer’s Social Security No.
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Firm’s Name (or yours •
if self-employed)
and address
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Date Daytime Telephone No. Social Security No.
( )
Title
of Officer
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I authorize a representative of the Department of Revenue to discuss my return and attachments with my preparer.
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are
true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
SCHEDULE K – Distributive Share Items
Federal Amount
Apportionment
Factor
Alabama Amount
Enter on Alabama
Schedule K-1
Part III, Line M
Part III, Line S
Part III, Line Z
Part III, Line O
Part III, Line W
Part III, Line Q
Part III, Line P
Part III, Line R
Part III, Line T
Part III, Line Y
Part III, Line AA
Part III, Line U
Part III, Line V
Part III, Line AB
Part III, Line X
1 Alabama Nonseparately Stated Income (Schedule E, line 7) .....
.
Separately Stated Items:
2 Contributions ...............
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3 Oil and gas depletion ........................................
4 I.R.C. §179 expense deduction
a. Amount allowed on federal Form 1120S .....................
b. Adjustments required .....................................
c. Amount to be apportioned .................................
5 Casualty losses .............................................
6 Portfolio income.............................................
7 Interest expense related to portfolio income.....................
8 Other expenses related to portfolio income (attach schedule) .....
9 Other separately stated business items (attach explanation) ......
10 Small business health insurance premiums (attach explanation) ...
11 Separately stated nonbusiness items (attach schedule) ..........
12 Composite payment made on behalf of owner/shareholder .......
13 U.S. taxes paid (attach explanation) ...........................
14 Alabama exempt income (attach explanation) ...................
Transactions with Owners:
15 Property distributions to owners ...............................
Returns without Payments
Returns with Payments
MAIL TO: Alabama Department of Revenue MAIL TO: Alabama Department of Revenue
Pass Through Entity Pass Through Entity
PO Box 327441 PO Box 327444
Montgomery, AL 36132-7441 Montgomery, AL 36132-7444
ADOR
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*1000042S*
Form Information
| Fact Name | Description |
|---|---|
| Form Purpose | The Alabama 20S form is used for S Corporations to report income, deductions, and other tax-related information for the tax year. |
| Filing Period | This form is applicable for the tax year starting January 1, 2010, and ending December 31, 2010, or for any other specified tax year. |
| Governing Law | The Alabama 20S form is governed by the Alabama Income Tax Act and related state tax regulations. |
| Attachments Required | To complete the return, it is necessary to attach the Federal Form 1120S and any applicable Alabama Schedule K-1 for each shareholder. |
Detailed Guide for Filling Out Alabama 20S
Completing the Alabama 20S form requires careful attention to detail. This form is essential for S corporations operating in Alabama to report their income, deductions, and tax obligations. After filling out the form, it’s important to ensure that all required attachments are included before submission to the Alabama Department of Revenue.
- Begin by entering the tax year for which you are filing at the top of the form.
- Fill in the Federal Business Code Number and the Federal Employer Identification Number in the designated spaces.
- Provide the corporation's name, address, city, state, and ZIP code.
- Indicate the state of incorporation and the nature of the business.
- Check the box if the corporation operates in more than one state.
- Complete Schedule A by entering the federal ordinary income or loss from trade or business activities, along with other relevant income and deductions.
- Proceed to Schedule B to allocate nonbusiness income, loss, and expenses. Fill in the necessary details for each item.
- If applicable, complete Schedule C for the apportionment factor by providing details on tangible property, payroll, and sales.
- Complete Schedule D for the apportionment of federal income tax, ensuring to enter the federal income tax from Federal Form 1120S.
- In Schedule E, report the apportionment and allocation of income to Alabama.
- Fill out Schedule F to track the Alabama Accumulated Adjustments Account.
- Complete Schedule G for any tax credits that apply.
- Provide required information in Schedule H to ensure the return is complete.
- In Schedule K, report the distributive share items for shareholders.
- Sign and date the form at the bottom, ensuring that all information is accurate and complete.
- Attach all required forms, including Alabama Schedule K-1 for each shareholder and Federal Form 1120S.
- Mail the completed form to the appropriate address based on whether you are submitting a return with or without payments.
Obtain Answers on Alabama 20S
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What is the Alabama 20S form?
The Alabama 20S form is a tax return specifically designed for S corporations operating in Alabama. It is used to report the corporation's income, deductions, and other relevant financial information for the tax year. This form helps determine the corporation's tax liability in the state.
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Who needs to file the Alabama 20S form?
Any S corporation that is incorporated in Alabama or operates within the state must file the Alabama 20S form. If your corporation has shareholders and generates income, you are required to submit this form, regardless of whether you owe taxes.
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What information is required to complete the Alabama 20S form?
To complete the Alabama 20S form, you will need the following information:
- Federal Employer Identification Number (EIN)
- Total federal income and deductions
- Alabama apportionment factor
- Details about shareholders and their respective shares
- Any other relevant financial data, such as income from business activities and nonbusiness income.
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When is the Alabama 20S form due?
The Alabama 20S form is typically due on the 15th day of the third month following the end of the tax year. For most S corporations, this means the form is due by March 15th if the tax year aligns with the calendar year. Extensions may be available, but you must file for them before the original due date.
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What happens if I don’t file the Alabama 20S form?
Failing to file the Alabama 20S form can lead to penalties and interest on any taxes owed. The state may also take action to enforce compliance, which could include audits or other legal measures. It's crucial to file on time to avoid these complications.
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Can I amend my Alabama 20S form after filing?
Yes, you can amend your Alabama 20S form if you discover errors or need to make changes after submission. Use the amended return process as outlined by the Alabama Department of Revenue. Ensure you indicate that the return is an amendment and provide the correct information.
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Where do I send the completed Alabama 20S form?
Completed Alabama 20S forms should be mailed to the Alabama Department of Revenue. The address depends on whether you are submitting a return with or without payment:
- Without Payment: PO Box 327441, Montgomery, AL 36132-7441
- With Payment: PO Box 327444, Montgomery, AL 36132-7444
Common mistakes
Filling out the Alabama 20S form can be a complex task, and many people make mistakes that can lead to delays or issues with their tax returns. One common mistake is failing to include all required attachments. The instructions clearly state that a copy of Form 1120S must be attached unless the return is completed in its entirety. Without this crucial document, the return is considered incomplete, which can result in penalties or additional scrutiny from the state.
Another frequent error involves incorrectly calculating the Alabama apportionment factor. This factor is essential for determining how much of the corporation's income is subject to Alabama tax. Many individuals overlook the detailed instructions regarding the calculation of this factor, which includes various components such as property, payroll, and sales. If these calculations are done incorrectly, it can lead to an inaccurate tax liability.
Additionally, many filers neglect to double-check their figures. Simple arithmetic mistakes can have significant consequences. For instance, if the total income or deductions are miscalculated, it can affect the overall tax due. It is advisable to review each line carefully and, if possible, have a second set of eyes look over the completed form to catch any errors that may have been missed.
Finally, some people fail to provide complete information in the contact section. This section is vital for ensuring that the Alabama Department of Revenue can reach the appropriate person if they have questions about the return. Missing or incorrect contact information can lead to delays in processing the return or resolving any issues that arise. Ensuring that all contact details are accurate and complete can facilitate smoother communication and help avoid unnecessary complications.
Documents used along the form
The Alabama 20S form is a crucial document for S corporations operating in Alabama, detailing their income, deductions, and tax liabilities. Alongside this form, several other documents are commonly required to ensure compliance with state tax regulations. Each of these documents plays a specific role in the overall tax reporting process.
- Alabama Schedule K-1: This form provides detailed information about each shareholder's share of income, deductions, and credits from the S corporation. It is essential for shareholders to report their individual tax obligations accurately.
- Federal Form 1120S: This is the federal tax return for S corporations. It outlines the corporation's income, deductions, and other tax-related information. A copy must be attached to the Alabama 20S form to complete the filing process.
- Alabama Schedule NRA: This schedule is required for non-resident shareholders. It details the income allocated to non-residents and ensures that tax obligations are met for those who do not reside in Alabama.
- Form BIT-V: This form is used for making payments associated with the business income tax. It must accompany any payments made with the Alabama 20S form.
- Federal Form 1120S Proforma: This document is a proforma version of the federal return that may be required for certain adjustments or for informational purposes. It aids in reconciling differences between federal and state tax calculations.
- Alabama Business Privilege Tax Return: If applicable, this return must be filed to report the business privilege tax owed by the corporation. It is a separate obligation from the income tax reported on the Alabama 20S form.
In summary, the Alabama 20S form is often accompanied by these additional forms and schedules, each serving a distinct purpose in ensuring accurate tax reporting and compliance. Properly completing and submitting these documents is essential for S corporations to meet their tax obligations in Alabama.
Similar forms
- Form 1120S: This is the federal tax return for S Corporations. Like the Alabama 20S form, it reports income, deductions, and tax credits for S Corporations. Both forms require detailed income reporting and allow for deductions related to business operations.
- Form 1065: This form is used by partnerships to report income, deductions, and credits. Similar to the 20S form, it requires the reporting of each partner’s share of income and losses, ensuring transparency in financial reporting.
- Schedule K-1 (Form 1065): This document provides information on each partner's share of income, deductions, and credits from the partnership. Like the 20S form, it allocates income to individual shareholders or partners for tax purposes.
- Schedule K-1 (Form 1120S): This form is specifically for S Corporations and details each shareholder's share of the corporation's income, deductions, and credits. Both the 20S and this K-1 form serve to inform shareholders of their tax obligations.
- Form 990: Nonprofits use this form to report financial information to the IRS. Similar to the 20S, it requires detailed reporting of income and expenditures, although it focuses on charitable activities rather than business profits.
- Form 941: This is the Employer's Quarterly Federal Tax Return. Like the 20S form, it requires reporting of wages and taxes withheld, providing a snapshot of a business's payroll tax obligations.
- Form 1040: This is the individual income tax return. While it serves a different purpose, both forms ultimately aim to report income and deductions for tax calculation, reflecting the financial activities of the entity or individual for the year.
Dos and Don'ts
When filling out the Alabama 20S form, it's essential to follow specific guidelines to ensure accuracy and compliance. Here are five things you should and shouldn't do:
- Do double-check your federal employer identification number (FEIN) for accuracy.
- Do ensure that all required attachments, such as the federal Form 1120S, are included.
- Do clearly indicate your business's name and address as they appear in official records.
- Do review the apportionment factors carefully to avoid miscalculations.
- Do keep a copy of the completed form for your records.
- Don't leave any required fields blank; incomplete forms may be rejected.
- Don't use outdated instructions; always refer to the latest guidelines.
- Don't mix personal and business expenses in your reported figures.
- Don't forget to sign and date the form before submission.
- Don't ignore deadlines; late submissions can incur penalties.
Misconceptions
- Misconception 1: The Alabama 20S form is only for corporations operating in Alabama.
- Misconception 2: Filing the Alabama 20S form is optional for S corporations.
- Misconception 3: The Alabama 20S form is the same as the federal Form 1120S.
- Misconception 4: Only profits need to be reported on the Alabama 20S form.
- Misconception 5: The Alabama 20S form does not require additional documentation.
This form is designed for S corporations, regardless of whether they operate exclusively in Alabama or across multiple states. If a corporation has activities in more than one state, it must still file this form to report its income and apportionment to Alabama.
In fact, filing this form is mandatory for S corporations doing business in Alabama. Failure to file can lead to penalties and complications with tax compliance.
While both forms serve similar purposes, they are distinct. The Alabama 20S form includes specific state-related instructions and requirements that differ from the federal form. It is essential to complete both forms accurately to ensure compliance.
Both profits and losses must be reported. The form captures a full picture of the corporation's financial activities, including any losses that may offset future income.
In many cases, attachments such as the federal Form 1120S and Alabama Schedule K-1 are necessary for the form to be considered complete. Missing documentation can delay processing and lead to issues with tax filings.
Key takeaways
The Alabama 20S form is essential for S Corporations operating in Alabama. It serves as the state tax return for these entities, reporting income, deductions, and tax liabilities.
Accurate federal identification numbers are crucial. Ensure that both the Federal Employer Identification Number (FEIN) and the Federal Business Code Number are correctly filled out to avoid processing delays.
Understanding the apportionment factor is vital. This determines how much of your income is taxable in Alabama, especially if your business operates in multiple states. Complete Schedule C to calculate this factor based on your property, payroll, and sales.
Ensure to attach all necessary documents. If you do not include a copy of the Federal Form 1120S, your return will be considered incomplete, which can lead to penalties or delays in processing.