Form 20c Instructions - Corporation Income Tax Return

NSTRUCTIONS

REPARATION OF

FORM

2011

20C

LABAMA

EPARTMENT OF

EVENUE

Corporation Income Tax Return

INSTRUCTIONS

What’s New For 2011

the Alabama Department of Revenue for each taxable period stating gross in-

come and allowable deductions and credits. Penalties will be added for failure to

Section 40-27-1, Article IV, Code of Alabama 1975, has been amended.

timely file, failure to timely pay, or fraudulent filing. The Commissioner of Rev-

For tax years beginning on or after January 1, 2011, all business income shall be

enue is authorized to distribute, apportion or allocate income and deductions of

apportioned to Alabama by multiplying the income by a fraction, the numerator of

related taxpayers to clearly reflect the income of the entities. See §40-18-35(b)(5).

which is the property factor plus the payroll factor plus twice the sales factor, and

Consolidated Filing:

the denominator of which is four.

Please refer to our Web site at for instructions on

Sales other than sales described in Title 40, Chapter 27, Section 1 Article IV

filing a Consolidated Corporate Income Tax Return, Form 20C-C.

¶16, are in this state if the taxpayer’s market for the sale is in this state.

Reemployment Act of 2010, Act Number 2010-557, passed by the Alabama

When To File:

Legislature during the 2010 Regular Session, allows a deduction for employers

ORIGINAL DUE DATE. The return for calendar year 2011 is due on or be-

that create new jobs for unemployed persons, effective for the tax years 2011 and

fore March 15, 2012. For fiscal year or short-year taxpayers, the return is due on

2012.

or before the 15th day of the 3rd month following the close of the tax period. If the

The Reemployment Act of 2010 provides an income tax deduction to em-

due date falls on a Saturday, Sunday, or state holiday, the return will be due the

ployers who hire individuals collecting unemployment or whose unemployment

following business day.

benefits have expired. Employers will receive an income tax deduction up to 50

Which Form To Use:

percent of the gross wages paid to each individual hired from these categories

FORM 20C. Corporations must file Form 20C, Corporation Income Tax Return,

who remains with the employer for 12 consecutive months. The deduction is lim-

unless (1) a valid election is in effect to be an S corporation under 26 U.S.C.

ited, depending on the wage rates paid to employees and is effective for tax years

§1362, (2) a valid election is in effect to be a qualified subchapter S subsidiary

2011 and 2012 for employees hired during 2010 and 2011, respectively. See the

under 26 U.S.C. §1361(b)(3) and all of its stock is owned by an Alabama S cor-

instructions for Form 20C, page 1, line 11c.

poration, or (3) the corporation has exempt status under §40-18-25(e), 40-18-

Qualifying Employers Deduction for Employee Health Insurance.

25(f), or 40-18-32 and the corporation has no unrelated business taxable income.

The Alabama Legislature passed Act Number 2011-155 during the 2011 leg-

islative session. The amended law allows qualifying employers to deduct an ad-

NOTE: Payments of $750 or more are required to be made electronically. How-

ditional one hundred percent (100%) of the amount paid as health insurance

ever, any business income tax payment mailed into the Department must be re-

premiums on qualifying employees in connection with an employer-provided

mitted with Form BIT-V.

health insurance plan. Qualifying employers are defined in the law as employers

with less than 25 employees. Qualifying employees are defined in the law as

FORM 20C-C Alabama Consolidated Corporate Income Tax Return. The

those employees that are Alabama residents, earn no more than $50,000 of

Form 20C-C must be filed by or on behalf of the members of the Alabama affili-

wages, and report no more than $75,000 of Alabama Adjusted Gross Income

ated group in accordance with Alabama Code Section 40-18-39, when a Con-

($150,000 if married filing jointly). The deduction should be claimed on the Ala-

solidated Filing election has been made pursuant to Code Section 40-18-39(c).

bama corporate income tax return, Form 20C, page 1, line 11b.

FORM BIT-V. Taxpayers with a business income tax payment of less than

Tariff Credit Act of 2011. The Tariff Credit Act of 2011, passed by the Ala-

$750 must complete Form BIT-V, Alabama Business Income Tax Voucher. De-

bama Legislature during the 2011 Regular Session, provides for a tax credit

tach the completed voucher, and mail it along with your payment. Payments of

against Alabama income tax for companies investing in qualifying projects that

$750 or more must be remitted electronically.

meet certain minimum requirements. The minimum employment level is 100 full

DO NOT staple or otherwise attach your payment or Form BIT-V to your re-

time employees with a base wage of at least equal to the annualized median in-

turn or to each other. Instead, place the items loose in the envelope.

dividual income. The minimum capital investment is $100,000,000. The amount

A valid Form BIT-V must accompany all tax payments that are not made elec-

of the credit shall not exceed $20 million or 25 percent of the capital cost of the

tronically. To obtain Form BIT-V visit our Web site at .

qualifying project, whichever is less. The total tariff credit allowed to any taxpayer

Estimate/Extension/Informational Requirements:

is limited to $50 million. The Tariff credit may be applied against the investing

Estimated Income Tax Payments. A corporation that has an Alabama in-

company’s state income tax liability or transferred to a transferee taxpayer to be

come tax liability in excess of $500 must pay estimated tax. The first payment is

credited against the transferee taxpayer's state income tax liability for up to three

due by the 15th day of the 4th month of the taxable year. The 2nd, 3rd, and 4th

years from the date of a Notice of Tariff Credit. Taxpayers claiming the tariff credit

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

must attach the approved Notice of Tariff Credit. For more information contact the

The amount of required installments shall be 25 percent of the required an-

Alabama Development Office at 1-800-248-0033 or the Commissioner of the Ala-

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

bama Department of Revenue at 334-242-1175.

cent of the tax shown on the return for the taxable year, or b) 100 percent of the

General Information For C Corporations

tax shown on the return of the corporation for the preceding taxable year. The prior

period exception shall not apply if the preceding taxable year was not a taxable year

Corporations Subject To Income Tax:

of 12 months or the corporation did not file a return for such preceding taxable

Sections 40-18-2 and 40-18-31, Code of Alabama 1975, impose an income

year showing a liability for tax. Refer to Alabama Code Section 40-18-80.1.

tax on every corporation doing business in Alabama or deriving income from

Large corporations (taxable income of $1,000,000 or more for any taxable

sources within Alabama, including income from property located in Alabama and

year during the testing period) are required to pay 100 percent of the current year

on every corporation licensed or qualified to transact business in Alabama except

tax. The prior year exception shall not apply in the case of a large corporation. The

for those corporations specifically exempted by §40-18-32.

testing period is the 3 taxable years immediately preceding the taxable year in-

Filing Requirements:

volved. Also, taxable income shall be determined without regard to any net oper-

Every corporation, joint stock company, or association subject to income tax

ating loss carried to the taxable year under Section 40-18-35.1. Refer to Alabama

under Title 40, Code of Alabama 1975, is required by §40-18-39 to file a return with

Code Section 40-18-80.1.

Form 20c Instructions - Corporation Income Tax Return - 2011

Related Articles

Related forms

Related Categories