Form 20c Instructions - Corporation Income Tax Return

LINE 1. Enter gross receipts from Alabama destination sales except sales to

LINE 9. If the amounts on line 7 and line 8 are greater than zero, divide the

the U.S. government. This includes total gross receipts from sales of tangible

amount on line 7 by the amount on line 8. If the amounts on line 7 and/or line 8

property shipped to Alabama from locations within and without Alabama.

are zero or less than zero, enter zero. This is the federal income tax ratio.

LINE 2. Enter the amount of sales shipped from an Alabama origin to any

LINE 10. Multiply the amount of federal income tax attributed to this corpo-

state or foreign country where this corporation is not taxable. Also enter total

ration as shown on line 6 by the federal income tax ratio as shown on line 9.

sales to the U.S. government shipped from Alabama.

Enter the result.

LINE 3. In the Alabama column, enter the total of lines 1 and 2. In the Every-

LINE 11. If a corporation takes a deduction for federal income tax on its Ala-

where column, enter total sales for everywhere. If this amount does not corre-

bama return and in a later year all or a portion of the tax claimed as a deduction

spond with line 1 of Federal Form 1120, attach an explanation and reconciliation.

is refunded by the Internal Revenue Service, the taxpayer is required to recog-

nize the refund on its Alabama return to the extent of the benefit received in the

Instructions for Schedule E

year of the deduction.

This schedule should be used to compute the amount of the corporation's fed-

Cash-basis taxpayers recognize refunds in the year they are issued by the In-

eral income tax deduction allowed for Alabama corporate income tax purposes.

ternal Revenue Service. Accrual-basis taxpayers recognize refunds in the year in

Corporations filing a consolidated federal return must complete lines

which the refund is accrued for financial accounting purposes. An accrual-basis

1-12 of this schedule. Corporations filing separate company federal returns

taxpayer receiving a refund as a result of a NOL carryback would accrue the re-

should complete lines 6-12 of this schedule only. Lines 1-5 are used to com-

fund in the year of the carryback.

pute the amount of the consolidated federal tax liability attributable to the

Multistate taxpayers filing separate federal returns (not requiring allocation of

company filing Form 20C.

the refund among members of a consolidation) should apportion the refund to

If the corporation is a member of an affiliated group which files a consolidated

Alabama using the following steps:

federal return, check the appropriate block to indicate the election made under 26

(1) If the total refund received or accrued results from a carryback to more

U.S.C. §1552. For taxpayers utilizing 1552(a)(1) and 1552(a)(2), provide a copy

than one previous year, identify each of the years to which the carryback is ap-

of the corporation's federal income tax workpapers showing the members of the

plied and designate the amount attributable to each year.

consolidated federal group. For corporations using 1552(a)(1), the workpapers

(2) Multiply the amount of refund attributable to each year by the same per-

should include the member's share of federal taxable income (line 30 of Form

centage used to apportion income to Alabama on that year's return as last re-

1120), positive amounts only. Losses should be entered as a $0.00. For cor-

ported or audited.

porations using 1552(a)(2), the workpapers should include the member's federal

(3) Add the results obtained in Step 2 for all years.

income tax as computed utilizing the current year tax rates and taking into account

(4) Enter the total on line 11.

any federal income tax credits attributable to each member of the federal group.

A multi state taxpayer filing its federal return as a member of a consolidated

The total (taxable income or federal income tax) from this workpaper should be

group must apportion the refund to each member of the group at the same ratio

the amount reported on Line 2 of this schedule.

that the tax deduction being refunded was originally apportioned. See Reg. 810-

Taxpayers utilizing method 1552(a)(3) must attach a copy of the corpo-

3-35-.01(1)(b)4.

ration's federal income tax deduction workpapers. Even if the taxpayer is

After the amount of refund attributable to the separate corporation has been

filing as part of a consolidated federal return, taxpayers utilizing method

determined for each year, the four (4) steps provided above for corporations fil-

1552(a)(3) must skip to line 6. Lines 1-5 of this schedule apply only to those

ing separate federal returns may be followed in determining the amount of fed-

taxpayers using methods 1552(a)(1) or 1552(a)(2).

eral income tax refund to be entered on line 11.

LINE 1. Enter the corporation's separate federal (taxable income/tax) from

LINE 12. Subtract line 11 from line 10. If line l0 is larger than line 11, enter

line 30 or 31 of the proforma 1120.

the net federal income tax deduction on line 12 and carry to line 11 of page 1.

LINE 2. Enter the group's total positive federal (taxable income/tax) – See

If line 11 is larger than line 10, enter the net federal income tax refund on line

Reg. 810-3-35-.01(1)(b)3.

12 and carry to line 11 of page 1.

LINE 3. Divide the corporation's separate federal (taxable income/tax) as

shown on line 1 by the group's total positive federal taxable (income/tax) as shown

Instructions for Schedule F

on line 2. Enter the result.

LINE 1. Alabama Enterprise Zone Credit/Exemption: Certain tax incen-

LINE 4. Enter the consolidated federal income tax (liability/payments).

tives are available to qualifying businesses which locate or expand within a des-

Accrual-basis taxpayers should enter the amount of the corporation's

ignated enterprise zone. These tax incentives are available under the provisions

consolidated federal income tax. The federal liability should correspond with Fed-

of Section 41-23-24.

eral Form 1120, Schedule J.

Business entities eligible for the tax credit must be approved by the Alabama

Cash-basis taxpayers should enter the actual tax payment forwarded to

Department of Economic and Community Affairs (ADECA) and must also receive

the Internal Revenue Service during the tax period.

certification annually from ADECA. Each corporation qualified for and receiving

Real estate investment trusts should not include the tax imposed by

an Alabama Enterprise Zone Credit is required to complete and attach Schedule

IRC §857(b)(6) on prohibited transactions as part of the federal tax deduction.

EZ and the certificate of Certification with the Form 20C return. If a C corpora-

LINE 5. Multiply the percentage from line 3 by the consolidated federal in-

tion is a member or partner of a pass-through entity that is eligible for the enter-

come tax (liability/payment) as shown on line 4. Enter the result.

prise zone credit, the credit is distributed to each partner or member based on the

LINE 6. Enter the taxpayer's federal income tax (or share of the consolidated

percentage of ownership; Schedule EZ-K1 is required to be attached to the C

federal income tax, if included in a consolidated return, as computed on lines 1-

corporation's Form 20C return.

5 above) – See Reg. 810-3-35-.01.

Accrual-basis taxpayers should enter the amount of the corporation's

Business entities eligible for the tax exemption must have entered into a con-

tract with the Governor of Alabama and ADECA and must also receive certifica-

federal income tax. The federal liability should correspond with Federal Form

1120, Schedule J.

tion annually from ADECA. A taxpayer must compute their income tax exemption

under the provisions of their specific contract. The certificate of Certification and

Cash-basis taxpayers should enter the actual tax payment forwarded to

computations must be attached to Form 20C to claim exemption.

the Internal Revenue Service during the tax period.

Real estate investment trusts should not include the tax imposed by

For additional information on the Alabama Enterprise Zone Credit/Exemption,

IRC §857(b)(6) on prohibited transactions as part of the federal tax deduction.

contact ADECA at Technical Assistance Section, 401 Adams Avenue, P.O. Box

LINE 7. Enter the amount of Alabama income from line 10, page 1.

5690, Montgomery, AL 36103-5690, 334-242-5370. Questions pertaining to the

LINE 8. Enter the amount of federal taxable income adjusted to Alabama

application of the tax credit should be addressed to Alabama Department of Rev-

basis from line 4, page 1.

enue, P.O. Box 327001, Montgomery, AL 36132-7001, 334-242-1175.

Form 20c Instructions - Corporation Income Tax Return - 2011 Page 7

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