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Individual & Corporate Income Tax

Alabama Department of Revenue - S-Corporation FAQ

Frequently Asked Questions Partnerships/Limited Liability Corporations

 

  • Is there a composite return for partnerships with non-resident members?

    The Entertainment Industry Incentive Act of 2009, Alabama Act Number 2009-144, also created new composite payment and return requirements for partnerships. Under the new law, a partnership, or other entity classified as a Subchapter K entity, is required to file a composite return and make composite payments on behalf of its nonresident owners or members if there are one or more nonresident owners or members at anytime during the taxable year. The law generally exempts Alabama QIPs from the composite payment and return requirement.

 

  • Can a non-resident opt out of the composite filing?

    No, under The Entertainment Industry Incentive Act of 2009, Alabama Act Number 2009-144, a partnership, or other entity classified as a Subchapter K entity, is required to file a composite return and make composite payments on behalf of its nonresident owners or members if there are one or more nonresident owners or members at any time during the taxable year.

 

  • Is a single member LLC required to file a separate Alabama income tax return?

    No, a single member LLC is a disregarded entity and should not file a separate Form 65.

 

  • How does a partnership file for an extension?

    Alabama individual and business income taxpayers are no longer required to file an Alabama extension form if they find they cannot meet their annual return filing deadline. Partnerships will be given an automatic single five-month extension to file both Form 65 and Form PTE-C. NO EXTENSION FORM (PAPER OR ELECTRONIC) IS REQUIRED TO BE FILED. The automatic extension only applies to filing a return; no extensions are granted for payment of taxes due.

    ALL COMPOSITE RETURN TAX PAYMENTS ARE DUE BY THE ORIGINAL DUE DATE OF THE RETURN. Taxes not paid on or before the unextended due date will be subject to interest at the rate provided in §40-1-44, Code of Alabama 1975, and all applicable penalties until paid. Please select the tax type and form below to see the various options for remitting extension payments. Payments should be submitted with Form PTE-V Pass Through Income Tax Voucher.

 

  • What is a QIP (Qualified Investment Partnership)?

    The Alabama Legislature passed the Entertainment Industry Incentive Act of 2009 during the regular 2009 legislative session. The law, Act Number 2009-144, created an entity referred to as a Qualified Investment Partnership (QIP). The new law creates §40-18-24.2, Code of Alabama 1975, which generally defines a QIP as a partnership or other entity classified as a subchapter K entity, or a business trust as defined in §40-18-1, Code of Alabama 1975, that for a tax period meets the gross income and asset requirements for a Qualified Investment Partnership as required by §40-18-24.2; and, for which an authorized officer, partner, member or manager of the entity has certified for the tax period that the entity meets the gross income and asset requirements. Proper certification of a QIP requires the completion of Alabama Schedule QIP-C, Qualified Investment Partnership Certification, which must be filed by the due date of the Alabama partnership income tax return for the entity.