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  • I have an active withholding tax account, but currently don’t have any employees. Do I need to file monthly or quarterly returns?
View All Withholding Tax FAQs

I have an active withholding tax account, but currently don’t have any employees. Do I need to file monthly or quarterly returns?

You will need to file a zero quarterly return in order to avoid receiving a delinquent notice for failure to file. You will not need to file a zero monthly report. If you do not plan on hiring any employees in the near future, you may file Form A-1 and mark the return as Final on line 1 to place your account on inactive status. This will eliminate the need to file the zero returns. You may also inactivate or reactivate the account at a later time by calling the Withholding Tax Section at (334) 242-1300.

You will need to file a zero quarterly return in order to avoid receiving a delinquent notice for failure to file. You will not need to file a zero monthly report. If you do not plan on hiring any employees in the near future, you may file Form A-1 and mark the return as Final on line 1 to place your account on inactive status. This will eliminate the need to file the zero returns. You may also inactivate or reactivate the account at a later time by calling the Withholding Tax Section at (334) 242-1300.

Related FAQs in Withholding Tax

If your federal identification number changes, you will need to apply for a new state withholding tax account number by filing the Combined Registration/Application available online.

The State of Alabama recognizes the following Federal Code Sections: Section 125 Cafeteria Plan, Section 401K, and Section 403B. For information on other exclusion from gross income, please see page 2 of the Withholding Tax Tables and Instructions for Employers.

Severance pay exemption of up to $25,000.00 is available upon approval from the Department. Please visit the Severance Pay Exemption page. Employees will not receive this exemption unless the Employer applies for the exemption and is approved by ADOR.

Accountants and tax filing services who file withholding tax returns and payments on behalf of employers must register with the ADOR as a bulk filer and must utilize their bulk filer registration when filing withholding tax returns on behalf of their clients. View more information concerning Bulk Filing.

Employers and filing agents who submit 25 or more Form W-2s (and/or Form 1099s with Alabama tax withheld) or who have filed and paid electronically during the year must electronically file this information and the Form A-3 online through My Alabama Taxes (MAT) on or before January 31 of the following year.

One penalty is for the late filing of the withholding tax return and the other penalty is for late payment of the withholding tax. Please see the billing code explanation enclosed with your letter.