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Electronic Filing of Withholding Tax and Annual Reconciliation of Alabama Income Tax Withheld

Instructions: Electronic Filing of Form A-3, Forms W-2, and/or 1099

Electronic Filing of Wage and Tax Statements is required if you are submitting 25 or more Forms W-2 (and/or Forms 1099 if Alabama income tax was withheld) or if you filed and paid electronically during the year. The due date for filing wage and tax information is January 31.

To upload W-2 information when electronically filing Form A-3 (Annual Reconciliation of Alabama Income Tax Withheld) the file must be in the format specified by Social Security Administration EFW2, formerly MMREF, and Alabama Form 10 (Specifications for Filing W2 Forms Electronically) format.

Many payroll software packages include a function to export the W-2 information. If your payroll software creates a file in the EFW2 format as modified by Alabama Form 10 it can be used to upload your W-2 information.My Alabama Taxes will accept the full EFW2 file, provided it contains only Alabama information. The Department only requires the RS record since the RS record contains the state W-2 information for each employee.The system will read each record but only processes the RS records when loading the file.

Check Formatting Errors

Check formatting errors using this excel spreadsheet program that will read and check each RS record for errors. Learn more
Download Program

Create a W-2 file

If you do not have software that will create an acceptable Alabama W-2 file, a program is available for you to create a W2REPORT.txt file that can be uploaded. Learn more
Download Program

AL Export Utility

Use AL Export Utility to remove carriage returns and line feeds, to extract RS records from an EFW2 file, or to remove other states records from your file.

  • Carriage Returns: Form 10 specifies that the file must not contain record delimiters including carriage returns or line feeds. If your file contains carriage returns or line feeds they must be removed from the file. This utility can be used to remove the carriage returns or line feeds.
  • EFW2 Records: The full EFW2 files can be lengthy and can take longer to process because the system has to read each record to determine if the record will load. The AL Export Utility will export the Alabama RS (State code of 01 or AL) records from your file to create an ALW2REPORT.txt file. Using this utility on a file that contains RE, RA, RW and RT will considerably reduce the size of the file and reduce processing time.
  • Other State Records: The file must contain only Alabama RS records (state code of 01 or AL). If your file contains RS records from other states, you will receive an error when the system compares the total RS records of the file uploaded to the total number of employees reported on Form A-3. Use the AL Export Utility to create a file with only Alabama RS records.

Instructions

The AL Export Utility is available in Word and Excel. These files use VBA macros to read each record and export all Alabama RS records to a new ALW2REPORT.txt file.

Download AL Export Utility

  1. Download the AL Export Utility (Updated: 01/30/2018).
  2. Select Open
  3. Enable Macros:
    • To enable macros in Excel 2007, Click the Microsoft Office Button , and then click Excel Options. Click Trust Center, click on Trust Center Settings, and then click Macro Settings. Select Enable all macros.
    • If you are using an older version of Excel, a Security Warning will appear. Select Enable Macros.If the Security Warning screen does not appear, you will need to follow these instructions to change the security setting in either Excel or Word:
      • From the Menu select Tools>Macro>Security
      • Select the Security Level tab, then select the Medium option and click OK.
      • After changing this setting reopen the file and select Enable Macros
  4. Click on the Export Alabama RS records to ALW2Report.txt button. Select or type the location to save your EXPORTED ALW2REPORT.txt file. You can use the dropdown box to select the directory of your file:
    • A:\
    • C:\
    • C:\Documents and Settings\……\My Documents\
    • C:\W2report\
  5. A menu box will appear. Select the W2 file to export and click on the Open button. Note: You can only select one file. The AL Export Utility will read each record and write only Alabama RS records (RS records that have state codes of either AL or 01) to a new file named ALW2REPORT.txt. When the file is created you willreceive a message telling you the location of your file. The original file will not be changed.
  6. Use the new ALW2REPORT.txt file to upload to My Alabama Taxes

Go to MAT

Submission Process: Filing Form A-3 and Forms W-2 and/or 1099

Filing Form A-3, Annual Reconciliation of Alabama Income Tax Withheld, is a two-step process: submission of employee W-2 information and/or 1099s (with Alabama income tax withheld), and submission of Form A-3, the annual reconciliation of the monthly/quarterly taxes withheld and remitted to the Department.

  • Step 1 – Submission of W-2 and/or 1099 Statements: Taxpayers can manually enter their wage and tax information or they can upload a file containing their information. Only text files are acceptable and the filename must have a .txt extension. The format of this file is specified by Alabama Form 10. Only 1099’s with Alabama income tax withheld should be included in the file.
    1. My Alabama Taxes (MAT) allows filers to either enter wage and tax information manually or import a file. MAT is not limited to the number of statements that can be manually keyed.
    2. To file through My Alabama Taxes, select the Return List for December and then click on File Now for Form A3 and Forms W2. On the next page click the Import Wage and Tax link and select the file to upload. or click Enter/Edit Wage and Tax Information to manually enter the wage and tax information. All errors must be corrected before continuing to Step 2.

    Note: If you cannot complete entering your information and want to save it for a later time, you can click the Save and Finish Later button. When you return, click Finish Now in the left panel.

  • Step 2 – Completion of the A-3 Annual Reconciliation: Upon successfully entering or uploading the W-2 and/or 1099 information, you must complete Form A-3 online. All fields on Form A-3 are required and must be entered on the form. After the information is entered, click Calculate in the Paperless Filing system or OK in My Alabama Taxes. The system will compare the number of employee wage statements entered on Form A-3 to the number of W-2 and/or 1099 statements filed and the amount reported on Block 2 will be compared to the sum of the State Income Tax Withheld on the W-2 and/or 1099 statements filed. Form A-3 will not be accepted if these amounts do not agree. Click Submit to receive a confirmation number and print the confirmation page for your record. Your information will not be received processed until you have received a confirmation number.