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36103-5690, or call the office at (334) 242-5370. Questions pertaining to the appli-

Line 10. Separately Stated Nonbusiness Items. Enter in the Federal Amount

cation of the tax credit should be addressed to Alabama Department of Revenue,

column the amount entered on Schedule B, Column E, line 1h. Enter nothing in

P.O. Box 327001, Montgomery, AL 36132-7001, or call the office at (334) 242-1175.

the Apportionment Factor column. Enter in the Alabama Amount column the

amount entered on Schedule B, Column F, line 1h. Attach a statement identifying

SCHEDULE H – Additional Information Required

the nature and amounts of the separately stated nonbusiness items.

All S corporations must complete Schedule H providing the required

Line 11. Composite Payment Made on Behalf of Owner. Enter nothing in the

information.

Federal Amount column and the Apportionment Factor column. Enter in the Ala-

SCHEDULE K – Distributive Share Items

bama Amount column the amount of total composite payments made on behalf of

Line 1. Alabama Nonseparately Stated Income. Enter on the Alabama

the owners.

Amount column the Nonseparately Stated Income or (Loss) Allocated and Appor-

Line 12. U.S. Taxes Paid. Enter the amount of U.S. income taxes paid, from

tioned to Alabama from Schedule E, line 7.

Schedule D, line 1, in the Federal Amount column. Enter in the Apportionment

Line 2. Contributions. Enter in the Federal Amount column (as a positive

Factor column the Federal Income Tax Apportionment Factor from Schedule D, line

amount) the contributions entered on Schedule A, line 12. Enter in the Apportion-

7 (enter 100% if the corporation operated only in Alabama). Enter in the Alabama

ment Factor column the apportionment factor from Schedule C, line 25. Enter in

Amount column the amount of Federal Income Tax Apportioned to Alabama from

the Alabama Amount column the amount that results from multiplying the appor-

Schedule D, line 8 (if the corporation operated only in Alabama enter the amount

tionment factor by the amount of contributions entered in the Federal Amount

from the Federal Amount column).

column.

Line 13. Alabama Exempt Income. Enter the total amount of Alabama exempt

Line 3. Oil and Gas Depletion. Enter in the Federal Amount column (as a pos-

income in the Federal Amount column. Enter in the Apportionment Factor column

itive amount) the oil and gas depletion entered on Schedule A, line 13 (please also

the apportionment factor from Schedule C, line 25. Enter in the Alabama Amount

see the form instructions for Schedule A, line 13). Enter in the Apportionment Fac-

column the amount that results from multiplying the apportionment factor by the

tor column the apportionment factor from Schedule C, line 25. Enter in the Ala-

amount of Alabama exempt income entered in the Federal Amount column.

bama Amount column the amount that results from multiplying the apportionment

Line 14. Property Distributions to Owners. Enter in the Federal Amount col-

factor by the amount of oil and gas depletion entered in the Federal Amount

umn and the Alabama Amount column the amount of property distributed to own-

column.

ers. Enter 100% in the Apportionment Factor column.

Line 4. IRC §179 Expense Deduction. Enter in the Federal Amount column (as

ALABAMA SCHEDULE K-1 – Owner’s Share of Alabama Income, Deduc-

a positive amount) the IRC §179 expense deduction entered on Schedule A, line

tions, Credits, etc.

14. Enter in the Apportionment Factor column the apportionment factor from

To be considered a complete return, the Alabama Form 20S must be accompa-

Schedule C, line 25. Enter in the Alabama Amount column the amount that results

nied by a properly completed Alabama Schedule K-1 for each tax entity that was a

from multiplying the apportionment factor by the amount of IRC §179 expense de-

shareholder of the Alabama S corporation at any time during the taxable year. Visit

duction entered in the Federal Amount column.

the Alabama Department of Revenue’s Web site ( ) to

Line 5. Casualty Losses. Enter in the Federal Amount column (as a positive

obtain a copy of the Alabama Schedule K-1 and the form preparation instructions

amount) the casualty losses entered on Schedule A, line 15. Enter in the Appor-

for the Alabama Schedule K-1.

tionment Factor column the apportionment factor from Schedule C, line 25. Enter

COMPOSITE FILING FOR NON-RESIDENT SHAREHOLDERS

in the Alabama Amount column the amount that results from multiplying the appor-

tionment factor by the amount of casualty losses entered in the Federal Amount

S corporations may pay tax due on Alabama source income for non-resident

column.

shareholders by submitting a composite return, (Form PTE-C). Form PTE-C and

Line 6. Portfolio Income. Enter in the Federal Amount column the gross

payment is due by the 15th day of the 3rd month following the close of the busi-

amount of portfolio income related to the net amount entered on Schedule A, line

ness year. The Form PTE-C and payment must be accompanied by Schedule

16. Enter in the Apportionment Factor column the apportionment factor from

PTE-CK1.

Schedule C, line 25. Enter in the Alabama Amount column the amount that results

Shareholders of S corporations can allow the S corporation to be relieved of

from multiplying the apportionment factor by the amount of portfolio income en-

the composite payment requirement by executing an Alabama Schedule NRA. By

tered in the Federal Amount column.

executing the Alabama Schedule NRA, the nonresident shareholder consents to

Line 7. Interest Expense Related to Portfolio Income. Enter in the Federal

the tax jurisdiction of the State of Alabama. The Schedule NRA is filed with the Ala-

Amount column the interest expense related to the portfolio income entered on line

bama Form 20S for the Alabama S corporation. Failure to file an Alabama Sched-

6. Enter in the Apportionment Factor column the apportionment factor from Sched-

ule NRA for a nonresident shareholder will require the S corporation to remit a

ule C, line 25. Enter in the Alabama Amount column the amount that results from

composite payment and file a composite return.

multiplying the apportionment factor by the amount of interest expense entered in

For information or instructions call the Alabama Department of Revenue Pass

the Federal Amount column.

Through Entity Unit, at (334) 242-1033.

Line 8. Other Expenses Related to Portfolio Income. Enter in the Federal

If the S corporation has no Alabama source income or a loss, no Form PTE-C

Amount column the expenses (other than interest expense) related to the portfolio

should be filed. A composite S corporation return cannot be used to establish a

income entered on line 6 – attach a statement identifying the nature and amounts

net operating loss. The shareholders of the S corporation must file their respective

of the other expenses. Enter in the Apportionment Factor column the apportion-

tax returns to establish any loss that can be used to offset income in subsequent

ment factor from Schedule C, line 25. Enter in the Alabama Amount column the

years.

amount that results from multiplying the apportionment factor by the amount of

Visit the Alabama Department of Revenue’s Web site

other expenses entered in the Federal Amount column.

( ) to obtain a copy of Alabama Form PTE-C and the Ala-

Line 9. Other Separately Stated Business Items. Enter in the Federal Amount

bama Schedule PTECK1, or to obtain the form preparation instructions for Form

column the amount entered on Schedule A, line 17. Enter in the Apportionment

PTE-C.

Factor column the apportionment factor from Schedule C, line 25. Enter in the Ala-

bama Amount column the amount that results from multiplying the apportionment

factor by the amount of other separately stated business items entered in the Fed-

eral Amount column.

Instructions For Form 20s - Preparation Of Alabama Department Of Revenue S Corporation Information/tax Return - 2006 Page 6

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