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S-Corporations FAQ

Does Alabama recognize the federal election to be treated as an S corporation?
Yes, use Form 20S.

When is the S corporation return due?
The return is due the 15th day of the third month following the end of the S corporation tax period.

Does Alabama accept the federal extension for S corporations?
If an extension has been granted for federal purposes, the extension is also granted for Alabama purposes; the Federal Form 7004 must be submitted with Form 20S. The automatic extension only applies to filing a return; no extensions are granted for payment of taxes due.

ALL TAX PAYMENTS ARE DUE BY THE ORIGINAL DUE DATE OF THE RETURN. Taxes not paid on or before the original 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.

Is a separate extension required for Form 20S and Form PTE-C?
No, the same extension will cover both returns.

Does Alabama accept consolidated S returns?
No, Alabama’s income tax laws and regulations specifically require each corporation to file a separate return with the department. See §40-18-39(a), Code of Alabama 1975, Regulation 810-3-39-.01(5)

How does a Qualified Subchapter S Subsidiary (QSSS) file ?
For tax years beginning after December 31, 1998, a qualified subchapter S subsidiary whose stock is 100% owned by an Alabama S corporation is disregarded and treated as a division of the parent.  The parent S corporation will file a 20-S return with this state.  An Alabama S corporation is any corporation with a valid election under 26 U.S.C. sections 1362 or 1362(b)(3) which conducts business within this state.

Does Alabama allow the filing of composite returns for S corporation shareholders?
Yes, a composite return may be filed by the S corporation to report the income and pay the tax for the nonresident shareholders. Use Form PTE-C.

When is the composite return due?
The return is due the 15th day of the third month following the end of the S corporation tax period.

Can a non-resident opt out of the composite filing?
Yes, if the non-resident completes Schedule NRA (Alabama Pass-Thru Entity Non-Resident Agreement). This form should be attached to Form 20S when the corporation files. This election remains in place until the non-resident member informs the corporation in writing that he/she wishes to revoke the agreement and participate in the composite filing.