ALABAMA
separate property state

 

Military Income:  Fully taxable.  Not exempt.

NOTE:  A nonmilitary spouse has the same domicile as the military spouse unless proven otherwise.  Alabama taxes residents on income from all sources, even income earned outside the state.  

Military Spouse Residency Relief Act: Must file Form 40NR. Copy of DD2058 indicating the state of legal residence of the military spouse must be attached.

Forms Used:           

Filing Status:  A joint return cannot be filed if one spouse is a resident of Alabama and the other is a resident of another state.  Must file a separate return.

Attach Copy of Federal Return:  No 

Not Taxed: 

Other State Tax Credit:  Available to Alabama residents on income taxed by Alabama and another state.  Credit will not be allowed unless a nonresident return is filed with the other state.  Attach Alabama Schedule CR and a copy of the other state return. 

Where to Mail:

Resident Returns:

Refund: Tax Due:
Alabama Dept of Revenue
PO Box 154
Montgomery, AL  36135-0001
Alabama Dept of Revenue
PO Box 2401
Montgomery, AL  36140-0001

Nonresident Returns:

Alabama Dept of Revenue
PO Box 327469
Montgomery, AL 36132-7469

 
Forms Request: 1-334-242-9681 Other Correspondence (including prior year returns):
Alabama Department of Revenue
Income Tax Division
PO Box 327470
Montgomery, AL  36132-7470
Alabama Department of Revenue
Income Tax Division
PO Box 327464
Montgomery, AL  36132-7464
Refund Inquiry:  1-334-353-2540 
NOTE:  Refunds take approximately 12 weeks.
General Info:  1-334-242-2117
Electronic Filing:  1-334-242-1101
Website:  www.ador.state.al.us
E-filing Info:  Retain AL8453 and relevant forms for 3 years.  The following CANNOT be filed electronically:
  • A Married Filing Separate State Return if the federal is filed jointly.
Tax Form Instructions:
Resident Instructions Non-Resident Instructions

Filing Status Scenarios

1.  Taxpayer and Spouse Residents (Use also for Single Taxpayer)
2.  Taxpayer and Spouse Different States of Residence
3.  Taxpayer and Spouse Non-Residents
4.  Taxpayer Non-Resident - Spouse Part-Year Resident
5.  Taxpayer Single or Married - Resident but Income from Other State
6.  Amended Return

 

1.  Taxpayer and Spouse Residents (Use also for Single Taxpayer) - Taxpayer and spouse are both Alabama residents, lived at their present location all year, and one or both had income.
Main Info Screen

Alabama 40 Form.  A joint resident Alabama income tax return is prepared.

* * * * Alabama requires a driver's license number be entered for the return. Without this, THE RETURN WILL REJECT! * * * *

Complete all other fields and forms with red or required information.

2.  Taxpayer and Spouse - Different States of Residence - Taxpayer or spouse is a resident of Alabama, while the other member is a resident of a different state.  An Alabama income tax must be prepared due to the taxpayer or spouse having Alabama earned income.
Main Info Screen.  For married couples, if one of the spouses is not a resident of Alabama, separate returns MUST be filed.  For this example, the taxpayer is a resident of Alabama while the spouse is a resident of North Dakota.

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.

Alabama 40 Form.  A joint return cannot be filed if one spouse is a resident of Alabama and the other is a resident of another state.  For this type of return they must file a separate return.  Even though the software will allow e-filing, the state of Alabama will not allow this type of return to be e-filed and will reject the return.  Do Not E-File.

* * * * Alabama requires a driver's license number be entered for e-filed returns. Without this information, THE RETURN WILL REJECT! * * * *

Complete all other fields and forms with red or required information.

3.  Taxpayer and Spouse Non-Residents - Taxpayer and spouse are residents of a different state.  The spouse and taxpayer must file a Alabama tax return due to one or both having Alabama earned income.
Main Info Screen.  If both members are residents of another state, the parties should file as nonresidents.  For this example, the taxpayer and spouse are both residents of Wisconsin but must file a Alabama income tax return because the spouse worked in Alabama.

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.

Alabama 40NR Form. This form will be generated for an Alabama non-resident who must report Alabama earned income. Married filing separate will result in the lowest tax in this example. Even though the software will allow e-filing, the state of Alabama will not allow this type of return to be e-filed and will reject the return.  Do Not E-File.

Complete Part VI on page 2 of the Alabama 40NR form.

* * * * Alabama requires a driver's license number be entered for e-filed returns. Without this information, THE RETURN WILL REJECT! * * * *

Complete all other fields and forms with red or required information.

4.  Taxpayer Non-Resident - Spouse Part-Year Resident - Taxpayer and spouse moved to or from Alabama during the tax year.  The taxpayer is a resident of a different state.  The Spouse is a part-year resident of Alabama.  The Spouse and taxpayer must file a Alabama tax return due to one or both of them having Alabama earned income and possibly income from another state.
Main Info Screen.  For this example, the taxpayer is in the military and a resident of Indiana.  The taxpayer and spouse moved from Alabama to North Dakota during the year.  The spouse was a resident of Alabama but is now changing their residency to North Dakota for tax purposes.  The spouse therefore was a part-year resident of both Alabama and North Dakota and must file a Alabama income tax return because the spouse worked in Alabama.

Part Year Resident States Worksheet.  Review form to ensure income is split correctly for the appropriate states.

Alabama 40 Form.  A joint return cannot be filed if one spouse is a part year resident of Alabama and the other is a resident of another state.  For this type of return they must file a separate return.  Even though the software will allow e-filing, the state of Alabama will not allow this time of return to be e-filed and will reject the return.  Do Not E-File.

Complete Part IV on page 2 of the Alabama 40 form.

* * * * Alabama requires a driver's license number be entered for e-filed returns. Without this information, THE RETURN WILL REJECT! * * * *

Complete all other fields and forms with red or required information.

5.  Single or Married Military Resident of Alabama with Income from Another State  - Taxpayer is single or married.  The taxpayer must file a Alabama tax return due to him or her having Alabama earned income, but they also have income from another state.
Main Info Screen.  For this example the taxpayer is a military member stationed in North Dakota but a resident of Alabama.  The taxpayer also had a job in North Dakota therefore having North Dakota earned income.

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states..

Alabama 40 Form.  Alabama taxes residents and domiciles on income from all sources, even if income is earned in and taxed by another state (North Dakota).  All of the taxpayers income is listed on the Alabama 40 form even if some of the income is earned in another state (North Dakota).

Complete Part IV on page 2 of the Alabama 40 form.

Alabama 40 Schedule CR - Credit for Taxes Paid to Other States.  A Schedule CR, Form must be added to the tax return.  You must complete the other states tax return first, then enter the amount of tax from the other states tax return.  This is not the amount the taxpayer had withheld from his or her pay but the amount of tax imposed on them.  Line 1 is the amount of income earned in the other state (North Dakota).  Line 3 is the amount of income tax liability on the (North Dakota) tax return.  A copy of the other state's return must be attached to the Alabama return if not e-filed.

* * * * Alabama requires a driver's license number be entered for the return. Without this, THE RETURN WILL REJECT! * * * *

Complete all other fields and forms with red or required information.

6.  Amended Return  - An amended Alabama return must be filed because the taxpayer received new tax information after their Alabama return was filed.
Federal 1040X Form.  Before making any changes to the tax return add the US 1040X form to the tax return.  You must check the box under Income and Deductions to lock in the entries in Column A - Original amount or as previously adjusted.

Alabama 40 - Alabama Individual Income Tax.  The same Alabama Form 40 that was used to file the return is used to amend the return.  Answer the questions as in the example.  You must check the box to lock in the original refund or balance due before making any changes to the return.

Make whatever changes are required to the federal tax return.  For this example, a new W-2 was received.

Refer to the Alabama 40 form to determine if the taxpayer is receiving an additional refund or owes money.

Amended returns can not be e-filed.  The taxpayer must mail the federal 1040X and any state amended returns if required to be filed.