Form Et-1 Instructions - Financial Institution Excise Tax

LINE 8b – Total Average Property Everywhere. Add the amounts on lines 6 and

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

7 in the Everywhere End of Year column.

to compute the amount of the consolidated federal tax attributable to the com-

pany filing Form ET-1.

LINE 9 – Alabama Property Factor. Divide the amount on line 8a (Total Aver-

age Property for Alabama) by the amount on line 8b (Total Average Property Every-

If the financial institution is a member of an affiliated group which files a consoli-

where), and enter the percentage on line 9.

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

Payroll Factor:

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

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

In computing the payroll factor include wages, salaries, commissions and any

solidated federal group. For financial institutions using 1552(a)(1), the workpapers

other form of remuneration paid to employees (including officers of corporations) for

personal services that are included in such employee’s gross income under the fed-

should include the member's share of federal taxable income (line 30 of Form 1120),

eral Internal Revenue Code. In the case of employees not subject to the federal In-

positive amounts only. Losses should be entered as a $0.00. For financial institu-

ternal Revenue Code (e.g., those employed in foreign countries), the determination

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

of whether such payments would constitute gross income to such employees under

tax as computed utilizing the current year tax rates and taking into account any fed-

eral income tax credits attributable to each member of the federal group. The total

the federal Internal Revenue Code shall be made as though such employees were

(taxable income or federal income tax) from this workpaper should be the amount

subject to the federal Internal Revenue Code.

LINE 10a. Enter in the Alabama column, the amount of wages, salaries and other

reported on Line 2 of this schedule.

compensation paid to employees for the production of business income in Alabama.

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

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

LINE 10b. Enter in the Everywhere column, the total amount of wages, salaries,

as part of a consolidated federal return, taxpayers utilizing method 1552(a)(3)

and other compensation the taxpayer paid to employees for the production of busi-

ness income.

should skip to line 6. Lines 1-5 of this schedule only apply to those taxpayers

LINE 10c – Alabama Payroll Factor. Divide the amount on line 10a by the

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

amount in line 10b and enter the percentage on line 10c.

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

line 30 or 31 of the proforma 1120.

Receipts Factor:

LINE 11. Enter in the appropriate columns the receipts from lease or rental of real

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

property.

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

LINE 12. Enter in the appropriate columns the receipts from lease or rental of tan-

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

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

gible personal property.

line 2. Enter the result.

LINE 13. Enter in the appropriate columns the amounts of interest from loans se-

cured by real property.

LINE 4. Enter the consolidated federal income tax (paid).

LINE 14. Enter in the appropriate columns the amounts of interest from loans not

Taxpayers should enter the actual tax payment forwarded to the Internal Rev-

enue Service during the tax period.

secured by real property.

LINE 15. Enter in the appropriate columns the net gains from the sale of loans.

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

LINE 16. Enter in the appropriate columns the amounts of interest from credit card

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

receivables and fees charged to card holders.

LINE 6. Federal Income Tax Deduction to be Apportioned. Enter the tax-

LINE 17. Enter in the appropriate columns the net gains from the sale of credit

payer's actual tax payment made to the Internal Revenue Service (or share of the pay-

card receivables.

ment forwarded to the Internal Revenue Service if included in a consolidated return).

LINE 18. Enter in the appropriate columns the amounts of credit card issuer’s re-

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

imbursement fees.

line 27.

LINE 19. Enter in the appropriate columns receipts from merchant discount.

LINE 8. Adjusted Total Income. Enter the amount of total net income adjusted

LINE 20. Enter in the appropriate columns the amounts of loan servicing fees

to Alabama basis from page 1, line 21.

from loans secured by real property.

LINE 9. Federal Income Tax Apportionment Factor. If the amounts on line 7

LINE 21. Enter in the appropriate columns the amounts of loan servicing fees

and line 8 are greater than zero, divide the amount on line 7 by the amount on line

8. If the amounts on line 7 and/or line 8 are zero or less than zero, enter zero. This

from loans not secured by real property.

LINE 22. Enter in the appropriate columns the amounts of interest, dividends, net

is the federal income tax ratio.

gains, and other income from investment and trading assets and activities.

LINE 10. Federal Income Tax Deduction Apportioned to Alabama. Multiply

LINE 23. Enter in the appropriate columns the receipts of sales of tangible per-

the amount of federal income tax attributed to this corporation as shown on line 6 by

the federal income tax ratio as shown on line 9. Enter the result.

sonal property.

LINE 24. Enter in the appropriate columns the amounts of other business re-

LINE 11. Refund of Federal Income Tax Deducted in Prior Year. If a corpo-

ceipts, identify the nature and amounts of the different types of receipts, and provide

ration takes a deduction for federal income tax on its Alabama return and in a later

how the receipts are reported on the federal income tax return.

year all or a portion of the tax claimed as a deduction is refunded by the Internal Rev-

enue Service, the taxpayer is required to recognize the refund on its Alabama return

LINE 25a – Total Alabama Receipts. Total the amounts entered in the Alabama

to the extent of the benefit received in the year the deduction was taken.

column for lines 11 through 24.

LINE 25b – Total Receipts Everywhere. Total the amounts entered in the Every-

Taxpayers recognize refunds in the year they are issued by the Internal Revenue

where column for lines 11 through 24.

Service.

Multistate taxpayers filing separate federal returns (not requiring allocation of the

LINE 25c – Alabama Receipts Factor. Divide the amount on line 25a (Total Ala-

refund among members of a consolidation) should apportion any refund received

bama Receipts) by the amount on line 25b (Total Receipts Everywhere), and enter

the percentage on line 25c.

from the Internal Revenue Service using the apportionment factor for the tax year in

LINE 26 – Alabama Apportionment Factor. Divide by 3 (if all 3 factors are uti-

which a deduction the deduction was claimed for the federal income tax paid.

lized) the sum of percentages on line 9 (Alabama Property Factor), line 10c (Ala-

A multistate taxpayer filing a federal return as a member of a consolidated group

bama Payroll Factor), and line 25c (Alabama Receipts Factor). Enter the resulting

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

percentage here and on line 24, page 1.

that the tax deduction being refunded was originally apportioned. See Reg. 810-3-35-

Schedule M – Federal Income Tax. This schedule should be used to compute

.01(1)(b)4.

the amount of the financial institution's federal income tax deduction allowable for

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

(apportioned to) Alabama and to offset that deduction with the amount of any refund

termined, apply the apportionment rate from the tax year in which the deduction for

received in the taxable year.

the federal income tax paid was claimed.

Financial Institutions filing a consolidated federal return must complete

LINE 12. Net Federal Income Tax Deduction or (Refund). Subtract line 11

lines 1-12 of this schedule. Financial Institution's filing separate company fed-

from line 10. If line 10 is larger than line 11, enter the net federal income tax deduc-

Form Et-1 Instructions - Financial Institution Excise Tax - 2012 Page 5

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