Instructions For The Preparation Of Alabama Department Of Revenue S Corporation Information/tax Return

NSTRUCTIONS

REPARATION OF

FORM

2005

20S

LABAMA

EPARTMENT OF

EVENUE

S Corporation Information/Tax Return

INSTRUCTIONS

Attach a copy of Federal Form 1120S, U.S. S Corporation Return of Income

General Instructions

within and without the State of Alabama to allocate and apportion their income

in accordance with Chapter 27, Title 40, Code of Alabama 1975 , (also known

The Alabama Department of Revenue’s Web site

as the Multistate Tax Compact). See the Alabama Department of Revenue’s

(

) has additional information concerning the

Web site (

) for additional information concerning

Alabama income tax laws and regulations that apply to Alabama S

Alabama’s multistate tax laws and regulations.

Corporations. Current and prior year forms and instructions, as well as fre-

WHO MUST SIGN. The Alabama Form 20S is not considered a complete

quently asked questions, are also available on the Web site.

return unless it is signed by an officer of the corporation. When a return is

ALABAMA S CORPORATIONS. The income tax computation and reporting

made for an Alabama S corporation by a receiver, trustee or assignee, the fidu-

requirements for Alabama S corporations are based on federal S corporation

ciary must sign the return, instead of the corporate officer.

requirements. Section 40-18-160(b), Code of Alabama 1975 , establishes the

PAID PREPARER AUTHORIZATION. Above the return signature area, on

requirement for an Alabama S corporation. The section states:

page 4 of the form, is a check box which can be used to authorize the Alabama

“…an Alabama S corporation” is a corporation:

Department of Revenue to discuss the Alabama Form 20S and its attachments

(1) With respect to which an election under 26 U.S.C. §1362 is in effect; or

with the paid preparer – who is identified in the Paid Preparer’s Use Only sec-

(2)a. With respect to which there is in effect an election under 26 U.S.C.

tion of the return. Checking the box can facilitate the process of resolving a

§1361(b)(3) to treat such corporation as a qualified subchapter S subsidiary;

problem when information on the return is missing or incomplete.

and

PAID PREPARER INFORMATION. Anyone who is paid to prepare the

b. All the stock of which is owned by an S corporation qualifying as an

Alabama Form 20S for an Alabama S corporation must sign and provide the

“Alabama S corporation” under subdivision (b)(1).

information required in the Paid Preparer’s Use Only section of the Form 20S.

No corporation shall be an Alabama S corporation for any portion of a tax-

The signature can be made in hand, by rubber stamp, by mechanical device, or

able year of the corporation during which an election under 26 U.S.C. §1362 or

a computer software program. Paid preparers must provide the Alabama S cor-

§1361(b)(3), whichever is applicable, is not in effect for federal income tax pur-

poration with a copy of the prepared return.

poses. No corporation shall be an Alabama S corporation if it is a financial insti-

TIME AND PLACE FOR FILING. The Alabama Form 20S is due by the

tution, as defined in Section 40-16-1…”

15th day of the 3rd month after the end of the tax year. An automatic extension

Qualified Subchapter S Subsidiaries. Alabama income tax law also provides

of time to file the return (up to a maximum of 6 months) will be granted if: (1) a

for qualified subchapter S subsidiaries in Section 40-18-160(d), which states:

copy of the Federal Form 7004 is attached to the return and the return is filed

“…(d) With respect to a qualified subchapter S subsidiary for which there is in

within the six-month period, or (2) Form 20-E is filed on or before the due date

effect an election under 26 U.S.C. §1361 (b)(3), all of its assets, liabilities, and

of the return regardless of whether the corporation files Federal Form 7004.

items of income, deductions, and credit shall be treated as assets, liabilities,

Mail the completed return to:

and such items, as the case may be, of the Alabama S corporation owning the

Alabama Department of Revenue

stock of the qualified subchapter S subsidiary…”

Individual and Corporate Tax Division

The Alabama Form 20S is similar to the federal Form 1120S in many ways.

Pass Through Entity Unit

And, the Alabama Form 20S requires that an Alabama Schedule K-1 be com-

P. O. Box 327441

pleted for any entity that was a shareholder at any time during the taxable year.

Montgomery, AL 36132-7441

Again, please refer to the Alabama Department of Revenue Web site should

Make check payable to:

you need a form or the instructions for the form.

Alabama Department of Revenue

To be considered a complete return, the Alabama S Corporation Information

/Tax Return must have attached a complete copy of the federal Form 1120S,

CAUTION: Do not attach the Form PTE-C or the Form PTE-C payment to

with all federal K-1s, all statements and all attachments. Failure to attach a

the Form 20S.

copy of Form 1120S will constitute improper preparation subjecting the return to

ESTIMATE/EXTENSION/INFORMATIONAL REQUIREMENTS:

treatment as a delinquent return. Failure to properly complete the return and

FORM 20-CD. Corporation Estimated Tax Voucher. A corporation, which will

attach copies of the Federal 1120S, Alabama Schedule K-1s, and all applicable

Nonresident Shareholder Agreement forms may result in the assessment of

have an Alabama income tax liability in excess of $5,000, must pay estimated

penalties and additional filing requirements.

tax based on the current year’s liability. The first payment is due by the 15th day

of the 4th month of the taxable year. The 2nd, 3rd, and 4th filings and payments

All schedules of the Alabama Form 20S must be completed. Schedules and

are due by the 15th day of the 6th, 9th, and 12th months, respectively.

statements may be attached to support line entries.

To obtain a 20CD or 20E coupon visit our Web site at

LIABILITY FOR FILING RETURNS. Alabama Form 20S is to be used only

. When payments are made by EFT, the Forms

by corporations doing business in Alabama that have elected to be treated as

20-CD and 20-E must still be remitted.

an S corporation for federal income tax purposes. For Alabama S corporation

qualification requirements and for the requirements for computing Alabama S

Section 40-18-80.1 provides for underpayment of estimated tax penalty in

corporation income, loss, deductions, and credits, see Alabama Department of

an amount determined by applying the underpayment rate established under 26

U.S.C. §6621.

Revenue regulation numbers 810-3-160 through 810-3-173.

MULTISTATE ALABAMA S CORPORATIONS. Section 40-18-22, Code of

Amount of required installments shall be 25 percent of the required annual

Alabama 1975 , requires Alabama S corporations that are doing business both

payment. Required annual payment generally means the lesser of a) 100 per-

Instructions For The Preparation Of Alabama Department Of Revenue S Corporation Information/tax Return - 2005

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