Form 20sc - Instructions For The Preparation Of Alabama Department Of Revenue Nonresident Composite Payment Return And Extension - 2003

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I
P
FORM
NSTRUCTIONS FOR THE
REPARATION OF
2003
20SC
A
D
R
LABAMA
EPARTMENT OF
EVENUE
Nonresident Composite Payment Return and Extension
INSTRUCTIONS
An Alabama S corporation may file composite returns and make com-
more. Taxpayers must register to use EFT, and substantial penalties can
posite payments on behalf of some or all of its nonresident shareholders if
be assessed for noncompliance. Call the Alabama Department of Rev-
there are one or more nonresident shareholders during any part of the
enue EFT Hotline at (334) 242-1819 or 1-800-322-4106 for further infor-
taxable year.
mation.
By filing Form 20SC, an Alabama S corporation reports each nonresi-
CAUTION: Do not attach the Form 20SC or the Form 20SC payment
dent shareholder’s share of the Alabama S corporation income. No fur-
to the Form 20S or vice versa.
ther filing may then be required by the shareholder. If a nonresident
shareholder has other income in this State or is due a refund (e.g. due to
SIGNATURE. The return must be signed by an authorized officer of
a net operating loss carryforward), an individual Nonresident Income Tax
the corporation. Enter the date signed and the officer’s title. If the return is
Return, Form 40NR, must be filed by that shareholder. On Form 40NR,
prepared by someone other than an employee of the corporation, enter
the shareholder reports all Alabama income including the shareholder’s
the signature and identification information of the preparer.
share of the Alabama S corporation income. The composite payment
Specific Instructions
made by the S corporation on behalf of its nonresident shareholders will
At the top, right-hand corner, check the appropriate box indicating a
be accounted for as an estimated tax payment on the shareholders’
calendar year, fiscal year, or short-year return. Fill in the blanks indicating
return(s).
the beginning and ending dates of the tax period if the return is for a fiscal
Any changes must be made on an amended Form 20SC no later than
year or short period. In the top block, enter the Federal Identification Num-
the extended due date of the return. After this date, changes in income
ber, name, and mailing address (with complete zip code) of the corpora-
affecting the shareholder’s tax must be made on the Form 40NR, Ala-
tion. Check the appropriate block if this form serves as an extension,
bama Individual Nonresident Income Tax Return.
amendment, or a request for refund.
Form 20SC and other information are available on the internet at
LINES 1 THROUGH 5. Give complete information regarding each non-
resident shareholder as requested in columns (A), (B), (C), and (D). Col-
NONRESIDENT AGREEMENTS (Schedule NRA). An Alabama S cor-
umn (C) should include the amount of each nonresident shareholder’s pro
poration must file the agreement of each nonresident shareholder of the
rata share of the Alabama S corporation income allocated and appor-
corporation (1) to file a return and make timely payments of all taxes
tioned to Alabama. Separately stated items of loss, deduction, or expense
imposed on the shareholder with respect to the income of the Alabama S
which are subject to other limitations on the individual’s return including
corporation, and (2) to be subject to personal jurisdiction in this State for
federal income tax, contribution, investment interest expense, and casual-
the purpose of the collection of unpaid income tax, together with related
interest and penalties, from the nonresident shareholder.
ty losses, are not included on the Form 20SC. The shareholder’s pro rata
FAILURE OF CORPORATION TO TIMELY FILE THE NONRESIDENT
share of these items can only be taken on the nonresident individual
AGREEMENTS. The corporation is required to complete Form 20SC and
return, Form 40NR. If a nonresident shareholder has a loss do not include
pay the tax due for all nonresident shareholders who fail to timely file the
the shareholder on Form 20SC.
nonresident shareholder agreement. The tax due shall be computed at
LINE 6. If this report covers more than five (5) nonresident sharehold-
5% on each nonresident shareholder’s pro rata share of income allocated
ers, complete pages 2 and 3 showing the same information as requested
and apportioned to this state.
in lines 1 through 5. Line 6 should total the amount on lines 1 through 5
General Instructions
and the amounts on pages 2 and 3.
LINE 7a. Enter only the payment made with the payment/extension
PERIOD COVERED. File the 2003 return for calendar year 2003 and
request (i.e. Form 20SC).
fiscal years that begin in 2003 and end in 2004.
LINE 7b. Enter the amount of any composite payments made on this
ORIGINAL DUE DATE. The 2003 return for calendar year 2003 is due
line. Make sure you include the Name and FEIN of the entity making the
on or before March 15, 2004. For fiscal year or short year taxpayers, the
payment on your behalf in the space provided.
return is due on or before the 15th day of the 3rd month following the
LINE 7c. Enter the total amount of capital credit allowable to the non-
close of the tax period. If the 15th falls on Saturday, Sunday, or a state
resident shareholders. The credit cannot exceed the tax due. Attach a
holiday then the due date will be considered the following business day. A
schedule of the credit allowable for each nonresident. Attach a copy of
completed Schedule K-1 for each shareholder included on the Form 20SC
Form K-RCC for each shareholder receiving the credit.
should be attached to Form 20S.
LINE 8. If this return is not filed on or before the due date (with exten-
If an extension is requested, this form must be completed and submit-
sions), enter a failure to timely file penalty (the greater of 10% of the
ted with the tax due on or before the original due date. Unextended
amount of net tax due or $50). Tax due and not paid by the original due
returns filed after the due date will be subject to a late filing penalty.
date will be subject to a failure to timely pay penalty of 1% per month
PAYMENT OF TAX. The total tax liability on the composite return is
(maximum 25%) and will accrue interest at the rate provided in Section
due on or before the 15th day of the 3rd month following the close of the
40-1-44. If a shareholder subsequently files a Form 40NR, it should not
tax period. Payments made after the original due date will be subject to
include any portion of the penalties and interest in the amount of the com-
interest and penalty charges. Make check payable to: Alabama Depart-
posite payment.
ment of Revenue. Write the corporation’s Federal Employer Identification
LINE 9a. Enter the total amount due. Subtract line 7d from the total of
Number, the income tax form number (Form 20SC), and the tax year on
lines 6 and 8.
the check.
LINE 10. If line 7d is greater than line 6, enter the difference on this
Section 41-1-20, Code of Alabama 1975 requires the use of Elec-
tronic Funds Transfer (EFT) for all single tax payments of $25,000 or
line.

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