Alabama Form 40 Income Tax Instruction Booklet
Extracted from PDF file 2022-alabama-form-40-booklet.pdf, last modified December 2022
Form 40 Income Tax Instruction BookletForm 40 revenue.alabama.gov Booklet Long Return Residents and Part-Year Residents Forms and Instructions 2022 myalabamataxes.alabama.gov Index A Filing Status … 6 First-Time and Second Chance Home Buyer Savings Account ... 16 Forms, How To Get … 32 Address Change … 17 Addresses of Taxpayer Service Centers … 3 Adoption Expenses … 16 Alabama Election Campaign Fund … 11 Alimony or Separate Maintenance Amount paid … 16 Amount received … 12 Amended Return … 18 Amount You Owe … 11 Annuities … 14 Armed Forces, Members of … 5 B Business Income or (Loss) (Federal Schedule C and C-EZ) … 12 Business Use of Home … 21 C Casualty and Theft Losses … 20 Consumer Use Tax … 10 Contributions to Charity … 19 Corresponding With Alabama Department of Revenue … 12 and 17 G Gains … 13, 22 and 23 General Information … 17 H Head of Family … 6 I Income (Examples) — You Must Report … 7 You Do Not Report … 7 Income Tax Withheld (Alabama) … 8 and 11 Income Tax Deduction (Federal) … 8 and 31 Interest Income … 8 and 21 Interest — Late Payment of Tax … 17 Interest — Penalty on Early Withdrawal of Savings … 16 Individual Retirement Arrangement (IRA) … 13, 14 and 15 Itemized Deductions … 8, 18-21 K Keogh Plan — Deduction for … 15 D L Death of Taxpayer … 18 Dependents … 8 and 10 Direct Deposit … 17 Dividend Income … 8 and 21 Domicile … 4 Donation of Refunds … 12 and 22 E Educational Expenses … 20 and 21 Educational IRA … 13 Employee Business Expenses … 20 Estates and Trusts … 24 Estimated Tax … 11 and 18 Extension of Time to File … 18 M Married Persons — Filing Joint or Separate Return … 6 Medical and Dental Expenses … 18 and 19 Military Personnel — Residents of Alabama … 5 Nonresidents of Alabama … 5 Moving Expenses … 16 Miscellaneous Itemized Deductions … 20 and 21 Mutual Funds … 23 N Farm Income and Expenses … 15 Federal Tax Deduction … 8 and 31 Figuring Your Income Tax … 10, 25-30 Filing Requirements — When To File … 5 Which Form To File … 5 Who Must File … 5 Records — How Long To Keep … 17 Refund Status… 4 Refund, When Should I Receive? … 4 Rents and Royalties … 23 Requesting a Copy of Your Tax Return …17 and 18 Rollover Distributions … 14 Roth IRA … 13 Rounding Off to Whole Dollars … 7 Salaries … 7 Schedules A, B, CR, DC, D, and E Instructions… 18-24 SEP … 13, 14, and 15 Setoff Debt Collection … 4 and 18 Sign Your Return … 12 Single Person … 6 Social Security Number … 6 Standard Deduction … 8 Steps For Preparing Your Return … 6 Students and Dependents … 5 Tax Assistance for Taxpayers … 3 Tax Tables … 25-30 W O Wages … 7 Where To File Form 40 … 12 Other Income … 8 and 12 Website – Check out our updated website at www.revenue.alabama.gov for downloadable forms, fill-in-forms, instructions, and the most accurate up-to-date information available. Our website also hosts links to PC on-line filing providers supporting the Federal/State electronic filing program. Refund Status – For the most up-to-date information concerning the status of your current year refund, call 1-855-894-7391 or check our website. Identity Quiz – If you happen to receive a notice to complete an ID Confirmation Quiz, it is not because you are suspected of ID theft. The purpose of the quiz is to protect your identity as the filer and prevent loss of taxpayer dollars to thieves. Credits – Certain tax credits are now required to be pre-approved through My Alabama Taxes (MAT) at www.myalabamataxes.alabama.gov. Please see the credit instructions in this booklet and Schedule OC instructions for more information. R T Name and Address … 6 Nonresidents of Alabama — Which Form To File … 5 Who Must File … 5 What’s New For 2022 Part-year residents … 5 Partnerships … 23 Payments — Check/Money Order … 11 Credit Card… 11 ACH Debit (E-Check) … 12 Penalty — Criminal Liability … 17 Late Filing … 17 Late Payment of Tax … 17 Other Penalties … 17 Pensions … 14 and 15 Personal Exemption … 6 and 8 Preparer, Tax Return … 12 S Long Term Care … 21 Losses … 12, 13, 22, and 23 F P Standard Deduction and Dependent Exemption – Acts 2022-292 and 2022297 increases the standard deduction and changes the threshold for the dependent exemption. See page 9 for updated standard deduction chart and page 10 for updated dependent exemption chart. Storm Shelter Credit - Act 2021-540 provides for an income tax credit for eligible taxpayers in the lesser amount of $3,000 or 50% of the total cost associated with the construction, acquisition, and installation of a qualified storm shelter at their primary residence. See Schedule OC instructions for more information. AAA Scholarship Granting Organizations Credit - Act 2022-368 amends the tax credit provisions related to scholarship granting organizations (SGO). It raises the credit amount allowed from 50% to 100% of the taxpayer’s liability, not to exceed $100,000 annually (previously $50,000). See Schedule OC instructions for more information. Page 2 ★ ★ Huntsville Shoals ★ Gadsden Tuscaloosa ★ Jefferson/ ★ Shelby Auburn/Opelika ★ ★ Montgomery Dothan ★ Mobile ★ Physical Addresses of Taxpayer Service Centers Alabama income tax assistance may be obtained by calling or visiting any of the Alabama Department of Revenue Taxpayer Service Centers listed below. Additional forms and instructions may also be obtained from these centers. Montgomery Taxpayer Service Center Huntsville Taxpayer Service Center Auburn/Opelika Taxpayer Service Center 2545 Taylor Road 4920 Corporate Drive, Suite H 3300 Skyway Drive Montgomery, AL 36117 Huntsville, AL 35805 Auburn, AL 36830 Phone – (334) 242-2677 Phone – (256) 837-2319 Phone – (334) 887-9549 Shoals Taxpayer Service Center Jefferson/Shelby Taxpayer Service Center Dothan Taxpayer Service Center 201 South Court Street, Suite 200 2020 Valleydale Road, Suite 208 121 Adris Place Florence, AL 35630 Hoover, AL 35244 Dothan, AL 36303 Phone – (256) 383-4631 Phone – (205) 733-2740 Phone – (334) 793-5803 Tuscaloosa Taxpayer Service Center Mobile Taxpayer Service Center Gadsden Taxpayer Service Center 1434 22nd Avenue 851 E. I-65 Service Road South, Bel Air Tower, Suite 100 701 Forrest Avenue Tuscaloosa, AL 35401 Mobile, AL 36606 Gadsden, AL 35901 Phone – (205) 759-2571 Phone – (251) 344-4737 Phone – (256) 547-0554 Page 3 Other Reasons For Refund Delays Refund Status To check the status of your current year refund, go to our Website at www.revenue.alabama.gov, then click on “Where’s My Refund,” or call our 24-hour toll-free Refund Hotline at 1-855-894-7391. How To Use This Instruction Booklet The instructions for Form 40 are divided into five main sections. Section 1 contains information on who must file, how to choose the correct form, and when to file a return. Section 2 contains useful steps to help you prepare your return. Section 3 contains specific instructions for most of the lines on your return. Section 4 contains general information about such items as amending your tax return, how long to keep records, and filing a return for a deceased person. Section 5 contains instructions for completing Schedule A for those taxpayers itemizing their deductions. Also included are instructions for Schedules B, CR, DC, D, and E. If you follow the steps in Section 2 and the specific instructions in Section 3, you should be able to fill in your return quickly and accurately. When Should I Expect My Refund? Wait At Least 90 Days For Your Refund If you do not receive your refund within 90 days of mailing your return, go to www.revenue.alabama.gov, then click on “Where’s My Refund,” or complete Form IT:489. Form IT:489 may be obtained from the Department’s website under the Forms link or from any of our Alabama Taxpayer Service Centers listed on page 3 of this booklet. If you call about your refund, have a copy of your return with you or the Department may be unable to assist you. Each year the Alabama Department of Revenue receives over 1.8 million income tax returns. Of this number, over 1 million taxpayers receive refunds. The Department makes every effort to process your refund as quickly as possible, and there are several things you, the taxpayer, can do to help us accomplish this. The date you file your return and how you file determines when you can expect your refund. For example, electronically filed returns are received and processed significantly faster than returns that are mailed to the Department of Revenue. Also, if you mail in an error-free return in January or February, you can expect to receive your refund sooner than if you wait until March or April to file. Returns filed this close to the deadline may require 90 days to process. Common Mistakes Which Delay Refunds Incorrect Name. Your refund will be issued in the name(s) appearing on your return. If your name is illegible or misspelled, your refund may be issued in the wrong name. Incorrect Address. Last year the U.S. Postal Service was unable to deliver thousands of refunds due to incorrect addresses, or because the taxpayer moved and failed to leave a forwarding address. Incorrect Social Security Number. Last year approximately 80,000 returns were received with missing or incorrect social security numbers. Your social security number is very important; it is used for identification of your file. Please compare the number on your return with the number on your social security card. Show in the blocks provided the social security numbers in the same order as the first names. For example, the social security number of the first name listed should be entered in the box headed “Your social security number.” The social security number of the second name should be entered in the box headed “Spouse’s social security number.” If separate returns are filed, the person filing the return should enter his or her social security number in the box headed “Your social security number,” and enter the spouse’s social security number on line 3. It is very important that the social security numbers be listed in this order so your refund will be issued in the correct name. Legibility. On many returns, the name, address, or social security number is not readable. If this happens, the wrong information may be recorded, and your refund check may be delayed. Make sure that the information you enter on the return is readable. Missing Withholding Statement (W-2). Make certain the “State Copy” of all forms W-2 wage and tax statements are included, W-2s are frequently missing. The Department will consider the return incomplete if all required information is not included. Incorrect Computation. Many returns must be corrected each year by the Department due to simple math errors. Before mailing your return, double check the addition and subtraction to make sure the math is correct. This is a good idea even if someone else prepares your return. Misdirected Mailing. Each year thousands of returns are mailed to the Internal Revenue Service instead of the Alabama Department of Revenue. Filing More Than One Return. File only one Form 40, 40A, 40EZ, 40NR or electronic return for each tax year. If it is necessary to amend your original return, you must file a completed return with the “Amended Return” box checked. The amended return will be processed after your original return has been processed. Filing Copies. A copy of a return is not acceptable unless it has the taxpayer(s) original signature(s). Missing Signatures. Thousands of unsigned returns are received each year by the Department. Before we can process them, these returns must be returned to the taxpayers for signatures. If a joint return is filed, both spouses must sign the return. Page 4 You Have Not Paid All Taxes Due From a Previous Year. If you owe tax for a prior year, your refund will be applied to pay that deficiency. Any amount remaining will be refunded to you. This will generally delay your refund 12 weeks or more. Setoff Debt Collection. If the Alabama Department of Human Resources, the Alabama Department of Labor, the Administrative Office of Courts, the Alabama Medicaid Agency, Alabama League of Municipalities, or Association of County Commissions of Alabama has notified the Alabama Department of Revenue that your account is delinquent on a debt repayment, any public assistance program (including the Child Support Act of 1979, Chapter 10, Title 38), any Medicaid assistance program, or Local Government Entity your refund will be applied to that debt. Note: See Setoff Debt Collection on page 18 for further information. Federal Refund Offset Program. Your 2022 federal or state refund will be taken to satisfy any outstanding liabilities owed to the State of Alabama or to the Internal Revenue Service. SECTION 1 Filing Information First, be certain you need to file a tax return. Your marital status, filing status, and gross income determine whether you have to file a tax return. Gross income usually means money, goods, and property you received on which you must pay tax. It does not include nontaxable benefits. See page 7 of the instructions to find out which types of income you should include. Other Filing Requirements Refunds. Even if your gross income was less than the amounts shown, you must file a return to get a refund if Alabama income tax was withheld from any amounts paid to you. Domicile. Individuals who are domiciled in (or residents of) Alabama are subject to tax on their entire income whether earned within or without Alabama. This is true regardless of their physical presence within Alabama at any time during the taxable year. Domicile is where one lives, has a permanent home, and has the intention of returning when absent. Domicile may be by birth, choice, or operation of law. Each person has one and only one domicile which, once established, continues until a new one is established coupled with the abandonment of the old. Burden of proof regarding change of domicile is on the taxpayer even though he/she owns no property, earns no income, and has no place of abode in Alabama. If an Alabama resident accepts employment in a foreign country for a definite or indefinite period of time with the intent of returning to the United States, the individual remains an Alabama resident and all income, wherever earned, is subject to Alabama income tax. This is true even if the taxpayer leaves no property in Alabama. If a citizen of a foreign country comes to Alabama to work (no matter how long he stays), buys a home, secures an Alabama driver’s license, does not intend to apply for U.S. Citizenship, and intends to ultimately re- turn to the country of origin, the individual will be considered to have established domicile in Alabama. In other words, a foreign citizen domiciled in Alabama is liable for Alabama income tax on income earned from all sources. Military Personnel (Residents). Military personnel, whose legal residence is Alabama, are subject to Alabama income tax on all income regardless of the source or where earned unless specifically exempt by Alabama law. Military personnel (Army, Navy, Marine, Air Force, Merchant Marine, and Coast Guard) who were residents of Alabama upon entering military service remain residents of Alabama for income tax purposes, regardless of the period of absence or actual place of residence, until proof as to change of home of record has been made. The burden of proof is on the taxpayer though he owns no property, earns no income, or has no place of abode in Alabama. Under the provisions of the Soldiers’ and Sailors’ Civil Relief Act, military personnel are not deemed to have lost their permanent residence in any state solely because they are absent in compliance with military orders. In addition, persons are not deemed to have acquired permanent residence in another state when they are required to be absent from their home state by virtue of military orders. If the husband and wife are both in military service, each could be a resident of a different state under the Soldiers’ and Sailors’ Civil Relief Act. A spouse not in military service has the same domicile as the military spouse unless proven otherwise. Military Personnel (Nonresidents). Nonresident military personnel merely having a duty station within Alabama (whose legal residence is not Alabama) are not required to file an Alabama income tax return unless they have earned income from Alabama sources other than military pay. If they have earned income in Alabama other than military pay, they are required to file Alabama Form 40NR. A married nonresident military person with income earned in Alabama may file either a separate return claiming himself or herself only, or a joint return claiming the total allowable personal exemption. The “Military Spouses Residency Relief Act” (Public Law 11197) states that the income for services performed by the spouse of a service member shall not be deemed to be income for services performed or from sources within a tax jurisdiction of the United States if the spouse is not a resident of the jurisdiction in which the income is earned because the spouse is in the jurisdiction solely to be with the service member serving in compliance with military orders. Dependent’s and Student’s Income. Dependents who are residents of Alabama must file a return if they meet the requirements under You Must File A Return If… on this page. A student’s income is fully taxable to the same extent as other individuals who are required to file a return. The dependent or student can claim a personal exemption of $1,500, and his or her parents may claim a dependent exemption if they provided more than 50% of his or her total support. See Dependent Exemption on page 8. When To File come which cannot exceed $1,500, You are not claiming income or loss from Schedules C, D, E, or F, and You are not claiming credit for taxes paid to another state. You MUST Use Form 40 If: You were a full or part-year resident of Alabama and do not meet ALL of the requirements to file Form 40A, and You are itemizing deductions. Part-Year Residents You should file as soon as you can after January 1, 2023, but no later than the due date of the federal return. If you file late, you will have to pay penalties and interest. (See Penalties and Interest on page 17.) If you know you cannot file your return by the due date, you do not need to file for an extension. You will automatically be granted an extension until October 15, 2023. If you anticipate that you will owe additional tax on your return, you should submit your payment with a payment voucher (Form 40V) with the box “Automatic Extension Payment” checked by the due date of the federal return. Except in cases where taxpayers are abroad, no extension will be granted for more than 6 months. An extension means only that you will not be assessed a penalty for filing your return after the due date. Interest on the additional tax due from the due date of the return and any penalties will be assessed if applicable to your return. Original returns must be filed within two years of the date the taxes are paid to be eligible for a refund. Criminal Liability could result from a continued failure to file returns. (Refer to “Criminal Liability” on Page 17.) Which Form To File You MAY Use Form 40A If You Meet ALL The Following Conditions: You were a resident of Alabama for the entire year, You do not itemize deductions, You do not claim any adjustments to income, such as an IRA deduction, alimony paid, Federal income tax paid for a prior year, etc., You do not have income from sources other than salaries and wages except for interest and dividend in- Part-year residents of Alabama should only report income earned while a resident of Alabama. Itemized deductions must be prorated to reflect only those expenses incurred while a resident of Alabama. Federal Tax Liability must be prorated by applying a percentage of Alabama adjusted gross income to Federal adjusted gross income in order to calculate the amount deductible on line 12 of Form 40. Part-year residents are allowed to deduct the full standard deduction, personal, and dependent exemptions. You MUST Use Form 40NR If: You are not a resident of Alabama and you received taxable income from Alabama sources or for performing services within Alabama and your gross income from Alabama source exceeds the allowable prorated personal exemption, or filing Married Filing Joint under the “Military Spouses Residency Relief Act.” Nonresidents must prorate the personal exemption. If your Alabama gross income exceeds the prorated amount, a return must be filed. You MUST Use Both Form 40 and Form 40NR If: You had sufficient income to require the filing of a part-year return and also had income from Alabama sources while a nonresident during the same tax year. In this case, both the total personal exemption and the dependent exemption must be claimed on the part-year resident return. No exemption can be claimed on the nonresident return. The part year resident return should include only income and deductions during the period of residency, and the nonresident return should include only income and deductions during the period of nonresidency. You Must File A Return If… You were a: Full Year Resident Part Year Resident Nonresident and your marital status at the end of 2022 was: Single (including divorced and legally separated) Married and living with your spouse at the end of 2022 (or on the date your spouse died) Single (including divorced and legally separated) Married and living with your spouse at the end of 2022 (or on the date your spouse died) Single (including divorced and legally separated) Married and living with your spouse at the end of 2022 (or on the date your spouse died) and your filing status is: Single Head of family Married, joint return Married, separate return Single Head of family Married, joint return Married, separate return Single or head of family Married, joint return Married, separate return Page 5 and your gross income was at least: $ 4,500 $ 8,200 $11,500 $ 5,750 $ 4,500 (while an Alabama resident) $ 8,200 (while an Alabama resident) $11,500 (while an Alabama resident) $ 5,750 (while an Alabama resident) Over the allowable prorated exemption: SECTION 2 Steps for Preparing Your Return By following these four useful steps, and reading the specific instructions, you should be able to prepare your return quickly and accurately. Step 1 Collect all your necessary records. Income Records. These include any Forms W-2, W-2G, and 1099 that you have. If you do not receive a Form W-2 by February 1, or if the one you receive is incorrect, please contact your employer as soon as possible. Only your employer can give you a Form W-2, and only he or she can correct it. If you have someone prepare your return for you, make sure that person has all your income and expense records so he or she can fill in your return correctly. Remember, if someone else prepares your return incorrectly — you are still responsible. Step 2 Obtain any forms or schedules you may need. The fastest way to obtain forms is to download them from our website www.revenue.alabama.gov. Also see page 33 for more information. Step 3 Sign and date your return. Form 40, 40A, or 40NR is not considered a return unless you sign it. Please sign the return in black ink only. Your spouse must also sign if it is a joint return. Original signatures are required or the return will not be accepted. Step 4 Attach all necessary forms and schedules. Attach the state copy of all Forms W-2, W-2G, and 1099 to the front of your return. Attach schedules and forms in sequential order, starting with Form 40. If you need more space on forms or schedules, attach separate sheets and use the same format as printed forms, but show your totals on the printed forms. Please use sheets that are the same size as the forms and schedules. Be sure to put your name and social security number on these separate sheets and attach them at the end of the return. Before mailing your return, check to make sure you have retained an exact copy for your records. If you owe tax, be sure to include your payment and Form 40V with your return. SECTION 3 Specific Instructions Name and Address Please type or print your name, address, and social security number in the appropriate blocks. If you live in an apartment, please include your apartment number in the address. If the post office delivers mail to your P.O. box number rather than to your street address, write the P.O. box number instead of your street address. Social Security Number Each year thousands of taxpayers file returns using an incorrect social security number. Usually this number belongs to another taxpayer. It is very important that you file your return using the correct social security number. Failure to use your correct social security number(s) in the space(s) provided WILL DELAY the processing of your refund. Listed below are a few of the common reasons why a social security number is reported incorrectly: failed to enter number on return, memorized wrong number, copied number wrong, gave an incorrect number to the tax preparer, or gave your employer an incorrect number. IMPORTANT: Check your W-2 forms. Your employer may be reporting an incorrect number for you. If you are married and filing a joint return, write both social security numbers in the blocks provided. If you are married and filing separate Alabama returns, write your spouse’s social security number on line 3. If your spouse is a nonresident alien, has no income, does not have a social security number, and you file a separate return, check the "NRA" box and leave the block for your spouse's social security number blank. If you and your spouse file a joint return, your spouse must have a social security number. If you or your spouse do not have a social security number, please get Form SS-5 from a Social Security Administration (SSA) office. File it with your local SSA office early enough to get your number before April 15. IMPORTANT: Please notify the Social Security Administration (SSA) immediately in the event you have changed your name because of marriage, divorce, etc., so the name on your tax return is the same as the name the SSA has on record. This helps prevent delays in processing your return. Filing Status and Personal Exemption Lines 1 through 4 You should check only the box that describes your filing status. The personal exemption will be determined by your filing status on the last day of the tax year. Single Consider yourself single if on December 31, 2022, you were unmarried or separated from your spouse either by divorce or separate maintenance decree. If you check box 1, enter $1,500 on line 13. Page 6 Married – Joint or Separate Returns? Joint Returns. Most married couples pay less tax if they file a joint return. If you file a joint return, you must report all income, exemptions, deductions, and credits for you and your spouse. Both of you must sign the return even if only one of you had income. Common law marriages entered into before January 1, 2017, are recognized by the State of Alabama for income tax purposes. CAUTION: You cannot file a joint return if you are a resident of Alabama and your spouse is a resident of another state. You should file as “married filing separate.” You and your spouse can file a joint return if you were living together on December 31, 2022, even if you did not live together for the entire year. Both of you are responsible for any tax due on a joint return, so if one of you does not pay the other may have to. NOTE: If you file a joint return, you may not, after the due date of the return, choose to file separate returns for that year. If your spouse died in 2022, you can file a joint return for 2022. You can also file a joint return if your spouse died in 2023 before filing a 2022 return. For details on how to file a joint return, see Death of Taxpayer on page 18. If you check box 2, enter $3,000 on line 13. Separate Returns. You can file separate returns if both you and your spouse had income, or if only one of you had income. If you file a separate return, report only your own income, exemptions, deductions, and credits. You are responsible only for the tax due on your return. NOTE: Alabama is not a community property state. If you file a separate return, write your spouse’s social security number on line 3. If your spouse is not required to file, attach a statement explaining why. If you check box 3, enter $1,500 on line 13. Head of Family An individual shall be considered “Head of Family” if, and only if, such individual is not married at the close of their tax year, is not a surviving spouse and their qualifying dependent is not a foster child. You may check the box on line 4 ONLY IF on December 31, 2022, you were unmarried or legally separated and meet either test 1 or 2 below. Test 1. You paid more than half the cost of keeping up a home for the entire year provided that the home was the main home of your parent whom you can claim as a dependent. Your parent did not have to live with you in your home, OR Test 2. You paid more than half the cost of keeping up a home in which you lived and in which one of the following also lived for more than 6 months of the year (temporary absences, such as for vacation or school, are counted as time lived in the home): a. Your unmarried child, grandchild, great-grandchild, etc., adopted child, or stepchild. This child does not have to be your dependent. b. Your married child, grandchild, great-grandchild, etc., adopted child, or stepchild. This child must be your dependent. But if your married child’s other parent claims him or her as a dependent under the Federal rules for “Children of Divorced or Separated Parents,” this child does not have to be your dependent. c. Any relative whom you can claim as a dependent. (See definition of dependent on page 8.) If the person for whom you kept up a home was born or died during the year, you may still file as “Head of Family” if the home was that person’s main home for the part of the year he or she was alive. Special Rules A nonresident taxpayer who receives income from Alabama sources or for performing services within Alabama and who also had income while a resident of Alabama during the same tax year must file both the Alabama Nonresident Form 40NR and the Alabama Part-year resident Form 40. If you are required to file both returns, the total personal exemption and the dependent exemption must be claimed on the partyear return (Form 40). No personal exemption or dependent exemption can then be claimed on the nonresident return (Form 40NR). Income All income is subject to Alabama income tax unless specifically exempted by state law. The term “income” includes, but is not limited to, salaries, wages, commissions, income from business or professions, alimony, rents, royalties, interest, dividends, and profits from sales of real estate, stocks, or bonds. Military pay is taxable income except for compensation received for active service in a designated combat zone. Examples of Income You MUST Report The following kinds of income should be reported on Forms 40, 40A, or 40NR and related forms and schedules: Wages including salaries, fringe benefits, bonuses, commissions, fees, and tips. Dividends (Schedule B). Interest on: bank deposits, bonds, notes, federal income tax refunds, mortgages on which you receive payments, accounts with savings and loan associations, mutual savings banks, credit unions, etc. (Schedule B). Original Issue Discount (Schedule B). Distributions from an Individual Retirement Arrangement (IRA) including SEPs and DECs, if you excluded these amounts in a prior year. Bartering income (fair market value of goods or services you received in return for your services). Business expense reimbursements you received that are more than you spent for the expenses. Amounts received in place of wages from accident and health plans (including sick pay and disability pensions) if your employer paid for the policy. Alimony or separate maintenance payments received from and deductible by your spouse or former spouse. Life insurance proceeds from a policy you cashed if the proceeds are more than the premium you paid. Profits from businesses and professions (Federal Schedule C or C-EZ). Your share of profits from partnerships and S Corporations (Schedule E). Profits from farming (Federal Schedule F). Pensions and annuities other than those listed in “Examples of Income You DO NOT Report.” Lump-sum distributions, endowments. Gains from the sale or exchange (including barter) of real estate, securities, coins, gold, silver, gems, or other property (Schedule D). Gains from the sale of your personal residence as reported on your Federal return. Rents and Royalties (Schedule E). Your share of estate or trust income (Schedule E). Prizes and awards (contests, lotteries, and gambling winnings). Income from sources outside the United States. Director’s fees. Fees received as an executor or administrator of an estate. Embezzled or other illegal income. Refunds of federal income tax if deducted in a prior year and resulted in a tax benefit. Payments received as a member of a military service are taxable except for combat pay and certain allowances. Property transferred in conjunction with performance of services. Jury duty pay. Nonqualified Withdrawal from Alabama College Counts 529 Fund. Examples of Income You DO NOT Report Do not include these amounts when deciding if you must file a return. United States Retirement System benefits. State of Alabama Teachers’ Retirement System benefits. State of Alabama Employees’ Retirement System benefits. State of Alabama Judicial Retirement System benefits. Military retirement pay. Tennessee Valley Authority Pension System benefits. United States Government Retirement Fund benefits. Payments from a “Defined Benefit Retirement Plan” in accordance with IRC 414(j). Contact your retirement plan administrator to determine if your plan qualifies. Federal Railroad Retirement benefits. Federal Social Security benefits. State income tax refunds. Unemployment compensation. Welfare benefits. Disability retirement payments (and other benefits) paid by the Veteran’s Administration. Workman’s compensation benefits, insurance damages, etc., for injury or sickness. Child support. Gifts, money, or other property you inherit or that was willed to you. Dividends on veteran’s life insurance. Life insurance proceeds received because of a person’s death. Interest on obligations of the State of Alabama or any county, city, or municipality of Alabama. Interest on obligations of the United States or any of its possessions. Amounts you received from insurance because you lost the use of your home due to fire or other casualty to the extent the amounts were more than the cost of your normal expenses while living in your home. (You must report as income reimbursements for normal living expenses.) Military allowances paid to active duty military, Page 7 National Guard, and active reserves for quarters, subsistence, uniforms, and travel. Subsistence allowance received by law enforcement and corrections officers of the State of Alabama. All retirement compensation received by an eligible fire fighter or a designated beneficiary from any Alabama firefighting agency. All retirement compensation received by an eligible peace officer or a designated beneficiary from any Alabama police retirement system. Death benefits received by a designated beneficiary of a peace officer or fireman killed in the line of duty. Income earned while serving as a foreign missionary after first serving 24 months as a missionary in a foreign country. Compensation received from the United States for active service as a member of the Armed Forces in a combat zone designated by the President of the United States. An amount up to $50,000 for Tax Years 2020 and forward and $25,000 for Tax Years 2019 and prior received as severance, unemployment compensation or termination pay, or as income from a supplemental income plan, or both, by an employee who, as a result of administrative downsizing, is terminated, laid-off, fired, or displaced from his or her employment, shall be exempt from state income tax. If the exempt severance pay is included in your state wages, contact your employer for a corrected W-2. Beginning January 1, 1998, all benefits received from Alabama Prepaid Affordable College Tuition Contracts (PACT). Qualified Withdrawal from Alabama College Counts 529 fund. Income received from the Department of Defense as a result of a member of the military killed in action in a designated combat zone. Any income earned by the spouse in the year of death of a member of the Military who has been killed in action in a designated combat zone. Beginning January 1, 2016, all income, interest, dividends, gains or benefits of any kind received from an ABLE (Achieving Better Life Experience) savings account. Effective with tax year 2020, insurance benefits received by a certified firefighter as a result of a cancer diagnosis to any extent the amounts are included in the federal adjusted gross income of the taxpayer and are not exempt under any other law. For more information please see Act 2019-361. Rounding Off to Whole Dollars Round off cents to the nearest whole dollar on your return and schedules. You can drop amounts under 50 cents. Increase amounts from 50 to 99 cents to the next dollar. For example: $1.39 becomes $1.00, and $2.69 becomes $3.00. Line 5 Wages, Salaries, Tips, Etc. Report all W-2 information on Schedule W-2. See Schedule W-2 instructions for more information. On column B – “Income,” enter the amount from Schedule W2, Line 18, Column I plus Column J. NOTE: If you are a resident of Alabama and you earn wages in more than one state, include the total “State Wages” from all states. NOTE: State of Alabama employees will find that the amount taxable for state purposes is, in most cases, more than the amount taxable for federal purposes. This is due to the fact that amounts deducted from their wages as “Contributions to the Alabama State Retirement System” qualify for deferral on the Federal return, but do not qualify for deferral on the Alabama return. Part-year Residents. If you were a resident of Alabama for only a part of the year, enter only the income earned during the period of residence in Alabama. Statutory Employees. If you were a statutory employee, the “Statutory Employee” box of your W-2 form should be checked. Statutory employees include full time life insurance salespeople, certain agent or commission drivers, traveling salespeople, and certain homeworkers. Please see the Schedule W-2 instructions for information on how to report your “Statutory Employee” wages. Alabama Income Tax Withheld Alabama tax withheld information must be reported on Schedule W-2. (See Schedule W-2 instructions for more information.) The amount withheld is shown on the state copy of your Form W-2. This copy should be marked “To Be Filed With Your Alabama Income Tax Return.” NOTE: Do not change or alter the amount of tax withheld or wages reported on your Form W-2. If any amount is incorrect or illegible, you should contact your employer and request a corrected statement. Do not include the following as Alabama income tax: Federal income tax, FICA tax (Social Security and Medicare), Local, city, or occupational tax, or Taxes paid to another state. In Column A – “Alabama tax withheld,” enter the total amount from Schedule W-2, Line 18, Column G. Line 6 Interest and Dividend Income Enter your TOTAL taxable income from interest and dividends. If the total taxable and nontaxable interest and dividends you received in 2022 is $1,500 or more, you must complete and attach Schedule B. Part-year residents enter only the amount of interest and dividend income earned during the period of residency. The payer should send you a Form 1099-INT, Form 1099-OID, or 1099-DIV, if applicable, showing interest or dividends you must report. To see what interest and dividends are taxable, read the instructions for Schedule B in this booklet. Line 7 Other Income All taxable income you received that is not reported on lines 5 and 6 should be entered on line 7. This includes rents, royalties, gains from sale of property, items not included in “State wages” box on W-2 forms, etc. See Examples of Income You DO NOT Report and Examples of Income You MUST Report on page 7 of these instructions for further details on income which should be included on this line. If you have income from other sources, you must complete page 2, Part I, and attach the appropriate schedule(s). Line 9 Adjustments to Income If you made payments to a traditional Individual Retirement Arrangement (IRA) or to a Keogh plan, you may be entitled to claim these payments as an adjustment to income. Also deductible as an adjustment to income are penalties you incurred for the early withdrawal of interest before maturity. You can deduct payments of alimony or separate maintenance made under a court decree to the same extent allowed for federal income tax purposes. Certain legal and medical expenses paid or incurred in the adoption of a minor are deductible as an adjustment to income. Certain active duty Armed Forces members may deduct certain moving expenses. The new job location must be within the State of Alabama. Self-employed persons may deduct health insurance premiums to the same extent as allowed for federal purposes. For more information on the above exclusions, please see the instructions for Part II on page 15. The total adjustments to income from page 2, Part II, line 16 should be entered on page 1, line 9. Line 10 worksheet on page 31 to determine your federal income tax deduction. If claiming a deduction on line 12, you must attach page 1, 2 and Schedule 1 of your Federal Return, if applicable. PLEASE NOTE: The Federal line references were correct at the time these forms and instructions were printed. However, there may have been changes to Federal forms after our print deadline and the line numbers referenced for our forms may have changed. If you have questions as to the correct line number on the Federal return, please feel free to call one of our taxpayer service centers listed on page 3. Joint Federal and Separate Alabama Returns, or Part Year Residents. If a married couple elects to file a joint federal return and separate Alabama returns, the federal income tax liability must be determined by a ratio of each spouse’s federal adjusted gross income to total joint federal adjusted gross income, or if filing as a part year resident, the ratio of Alabama adjusted gross income to federal adjusted gross income. This calculation is required regardless of the method used in claiming other deductions. Line 13 Personal Exemption Enter the personal exemption from line 1, 2, 3, or 4. Adjusted Gross Income If the amount on line 10 is less than zero, you may have a net operating loss that you can carry to another tax year. If you carry the loss back to earlier years, you should check the amended return box on your Form 40 and attach Form NOL-85 and/or Form NOL-85A. Note: Part year residents are allowed the full exemption amount. A dependent or student may take the personal exemption even if claimed as a dependent by someone else. Line 14 Line 11 Dependent Exemption Itemized or Standard Deduction A “dependent” as defined under Alabama law is an individual other than the taxpayer and his or her spouse who received over 50% of his or her support from the taxpayer during the tax year and is also related to the taxpayer in one of the following relationships: You have the option to either itemize your deductions or you may claim the optional Standard Deduction. You should compute your deduction both ways to determine the option that gives you the larger deduction. If you elect to claim the Standard Deduction on your return and it later becomes necessary to change to itemized deductions, you may do so by filing an amended return. If married and filing separate returns, both spouses must claim the same deduction unless the spouses have lived apart for the entire year, in which case each spouse may claim either deduction. However, neither spouse may claim a deduction for expenses paid by the other. See the instructions for Schedule A for items that may be claimed as an itemized deduction. Part-year residents of Alabama may claim only the itemized deductions actually paid during the period of Alabama residency. Itemized Deductions. If you elect to itemize your deductions, you should check box a on line 11 and complete and attach Schedule A. Standard Deduction. If you elect to claim the Standard Deduction, you must check box b on line 11 and use the Standard Deduction chart on page 9 to determine your allowable deduction. A dependent or student may take the standard deduction even if claimed as a dependent by someone else. Line 12 Federal Income Tax Deduction Use your 2022 federal income tax return and the Page 8 Son Daughter Stepson Stepdaughter Legally adopted child Parent Grandparent Grandchild Brother Sister Stepbrother Stepsister Stepmother Stepfather Mother-in-law Father-in-law Brother-in-law Sister-in-law Son-in-law Daughter-in-law If related by blood: Uncle Aunt Nephew Niece NOTE: You cannot claim a foster child, friend, cousin, yourself, or your spouse as a dependent under Alabama law. Birth or Death of Dependent. You can take an exemption for a dependent who was born or who died during 2022 if he or she met the qualifications for a dependent while alive. Support. You must have provided over 50% of the dependent’s support in 2022. If you file a joint return, the support can be from you or your spouse. You cannot claim credit on an Alabama return for a dependent if you provided less than 50% of the support under Alabama law as you can under federal law in certain conditions. In figuring total support, you must include money the Standard Deduction Married Filing Joint ____________________________ AL Adjusted Gross Standard Income (AL Line 10) Deduction $8,500 $ 0 – $25,999 $8,325 $26,000 – $26,499 $8,150 $25,500 – $26,999 $7,975 $27,000 – $27,499 $7,800 $27,500 – $27,999 $7,625 $28,000 – $28,499 $7,450 $28,500 – $28,999 $7,275 $29,000 – $29,499 $7,100 $29,500 – $29,999 $6,925 $30,000 – $30,499 $6,750 $30,500 – $30,999 $6,575 $31,000 – $31,499 $6,400 $31,500 – $31,999 $6,225 $32,000 – $32,499 $6,050 $32,500 – $32,999 $5,875 $33,000 – $33,499 $5,700 $33,500 – $33,999 $5,525 $34,000 – $34,499 $5,350 $34,500 – $34,999 $5,175 $35,000 – $35,499 $5,000 $35,500 and above Married Filing Separate ____________________________ AL Adjusted Gross Standard Income (AL Line 10) Deduction $4,250 $ 0 – $12,999 $4,162 $13,000 – $13,249 $4,074 $13,250 – $13,499 $3,986 $13,500 – $13,749 $3,898 $13,750 – $13,999 $3,810 $14,000 – $14,249 $3,722 $14,250 – $14,499 $3,634 $14,500 – $14,749 $3,546 $14,750 – $14,999 $3,458 $15,000 – $15,249 $3,370 $15,250 – $15,499 $3,282 $15,500 – $15,749 $3,194 $15,750 – $15,999 $3,106 $16,000 – $16,249 $3,018 $16,250 – $16,499 $2,930 $16,500 – $16,749 $2,842 $16,750 – $16,999 $2,754 $17,000 – $17,249 $2,666 $17,250 – $17,499 $2,578 $17,500 – $17,749 $2,500 $17,750 and above Head of Family ____________________________ AL Adjusted Gross Standard Income (AL Line 10) Deduction $5,200 $ 0 – $25,999 $5,065 $26,000 – $26,499 $4,930 $26,500 – $26,999 $4,795 $27,000 – $27,499 $4,660 $27,500 – $27,999 $4,525 $28,000 – $28,499 $4,390 $28,500 – $28,999 $4,255 $29,000 – $29,499 $4,120 $29,500 – $29,999 $3,985 $30,000 – $30,499 $3,850 $30,500 – $30,999 $3,715 $31,000 – $31,499 $3,580 $31,500 – $31,999 $3,445 $32,000 – $32,499 $3,310 $32,500 – $32,999 $3,175 $33,000 – $33,499 $3,040 $33,500 – $33,999 $2,905 $34,000 – $34,499 $2,770 $34,500 – $34,999 $2,635 $35,000 – $35,499 $2,500 $35,500 and above Alabama Use Tax Worksheet Column A Report 2022 purchases for use in Alabama from out-of-state sellers on which tax was not collected by the seller. Total Purchase Price Single ____________________________ AL Adjusted Gross Standard Income (AL Line 10) Deduction $3,000 $ 0 – $25,999 $2,975 $26,000 – $26,499 $2,950 $26,500 – $26,999 $2,925 $27,000 – $27,499 $2,900 $27,500 – $27,999 $2,875 $28,000 – $28,499 $2,850 $28,500 – $28,999 $2,825 $29,000 – $29,499 $2,800 $29,500 – $29,999 $2,775 $30,000 – $30,499 $2,750 $30,500 – $30,999 $2,725 $31,000 – $31,499 $2,700 $31,500 – $31,999 $2,675 $32,000 – $32,499 $2,650 $32,500 – $32,999 $2,625 $33,000 – $33,499 $2,600 $33,500 – $33,999 $2,575 $34,000 – $34,499 $2,550 $34,500 – $34,999 $2,525 $35,000 – $35,499 $2,500 $35,500 and above Column B Column C Tax Rate Tax Due – (Multiply Col. A by Col. B) 1. All purchases EXCEPT automotive vehicles and farm machinery . . . . . . . . . . . . . . 2. ATVs, off-road motorcycles, riding lawnmowers, self-propelled construction equipment and other automotive vehicles that are not titled or registered by the county licensing official . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .04 3. Farm machinery or equipment and replacement parts thereof . . . . . . . . . . . . . . . . . . .015 .02 4. TOTAL TAX DUE (Total of Column C). Carry this amount to Schedule ATP, Part I, line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 9 dependent used for his or her own support even if this money was not taxable (for example: gifts, savings, welfare benefits). If your child was a student, do not include amounts he or she received as scholarships. Support includes items such as food, a place to live, clothes, medical and dental care, recreation, and education. In figuring support, use the actual cost of these items. However, the cost of a place to live is figured at its fair rental value. In figuring support, do not include items such as income taxes, social security taxes, premiums for life insurance, or funeral expenses. If you qualify to claim your child and/or other individuals as your dependent, you must complete on page 2 Part III. The amount entered on page 2, Part III, line 2, should be entered on page 1, line 14. Use the following chart to determine the per-dependent exemption amount. Amount on Page 1, Line 10 0 - 50,000 50,001 - 100,000 Over 100,000 Dependent Exemption 1,000 500 300 Line 17 Figuring Your Tax You must figure your tax from the Tax Tables unless you are claiming a carryover or carryback Net Operating Loss from another year. Indicate the method you are using by checking the appropriate box. If you are claiming a Net Operating Loss from another year, you must complete and attach Form NOL-85A. Line 18 Net Tax Due Alabama If you are using tax credits to reduce your tax liability, Schedule OC must be completed in order to compute your net tax due. You must check the box to indicate you are using Schedule OC to compute your net tax due. If you do not have any tax credits, enter the amount from line 17. Credits - Schedule OC Schedule OC must be completed for a credit claim and Individual taxpayers must register to set up an account in My Alabama Taxes (MAT) at www.myalabamataxes.alabama.gov for approval before claiming certain credits on their tax return. Once logged into MAT, a taxpayer will need to locate the “Individual Income Tax” account type, then select “Submit a Credit Claim” from the “Tax Incentives” section on the right margin of the page and follow a short series of steps to reserve their credit. For individuals who do not have a MAT account or are unable to set up a MAT account, go to the MAT homepage, select “Submit an Individual Credit Claim” from the “Individuals” section on the main page and follow a short series of steps to reserve your credit. If the credit claimed on an individual income tax return is from a Schedule K-1 issued by a pass through entity, the credit claim will be submitted by the entity and no action is required by the individual. Supporting documentation for certain credits is required to be uploaded in MAT. Taxpayers needing assistance with reserving a tax credit may call (334) 353-9770 or (334) 353-0602. While all tax credits are reported on Schedule OC, some require a separate schedule to be completed be- fore entering the results on Schedule OC and some require a MAT account to reserve their credit approval before submission on Schedule OC. Please visit the Department’s website for more information on the Schedule OC and Schedule OC instructions for each of the following tax credits: Credit for Taxes Paid to Other States, Alabama Enterprise Zone Credit, Basic Skills Education Credit, Rural Physician Credit, Coal Credit, Full Employment Act of 2011 Credit, Veterans Employment Act – Employers Credit, Veterans Employment Act- Business Start Up Expense Credit, Credit For Taxes Paid to a Foreign Country, Qualified Irrigation System/Reservoir System tax Credit, Alabama Accountability Tax Credit- School Transfer Credit, Alabama Accountability Act Credit – Scholarship Granting Organization (SGO) credit, Alabama Adoption Credit, 2013 Alabama Historic Rehabilitation Tax Credit , Career Technical Dual Enrollment Credit, Investment Credit – Alabama Jobs Act, Alabama Renewal Act – Port Credit, Alabama Renewal Act – Growing Alabama Credit, Apprenticeship Tax Credit, 2017 Alabama Historic Tax Rehabilitation Credit, Railroad Modernization Act of 2019 Credit, Storm Shelter Credit, and the Income Tax Capital Credit. For more information on credits see Schedule OC. Credit for Taxes Paid to Another State. You must complete Schedule CR and you must attach a copy of other state’s return or W-2G’s if the taxing state does not allow a return to be filed for gambling winnings. The credit is provided to prevent the double taxation of income and is only available to legal residents of Alabama filing Form 40 who have income from sources outside of Alabama that is being taxed by Alabama and another state (or territory of the United States) in the same tax year. Residents of Alabama for only a part of the tax year can claim this credit only if the returns filed with Alabama and the other state cover the same periods. If the state for which you are claiming a credit allows for credits instead of personal exemptions, call (334) 242-1170 for further information in converting this credit for Alabama purposes. No credit is allowable when the income from sources outside of Alabama is totally offset by a corresponding deduction. However, income from sources outside of Alabama that is reported on the return and not totally offset by a corresponding deduction may result in a credit. In such cases the credit is limited to the lesser of the tax actually due to the other state or territory or the amount that would be due on the same income computed at the income tax rate in Alabama. An example of this situation is shown in the booklet in the instructions for Schedule CR on page 21. The Schedule CR calculation should not be used by a taxpayer who paid income tax to a foreign country. Taxpayers who paid taxes to a foreign country should use Section B, Part I of Schedule OC. Please see rule 810-3-21-.03 for calculation of credit when tax was paid to a foreign country. For further information for Schedule CR see page 21. Line 19 Additional Taxes Please complete Schedule ATP to report consumer use tax and Catastrophe savings tax, enter amount from Schedule ATP, Part I, Line 3. Consumer Use Tax: Review the purchases you made during 2022. If you purchased items for use in Alabama from out-of-state sellers who did not charge sales or use tax, you owe consumers use tax on the items. If Page 10 you made no purchases from out-of-state sellers, enter 0 (zero) on Schedule ATP, Part I, line 1 and check the box. Use tax is the counterpart of the sales tax. State use tax is imposed at the same rate and on the same type of transactions as sales tax and is due from the consumer when the sales tax is not collected. When you purchase merchandise from a retail store or other business establishment in Alabama, the seller is required to collect sales tax on the purchase. When you purchase merchandise from a business located outside of Alabama the seller might collect use tax on the purchase. However, not all out-of-state businesses are registered and required to collect Alabama tax. As the consumer, you are responsible for ensuring that sales or use tax is paid on your purchases. When you purchase merchandise for storage, use or consumption in Alabama and the retail seller does not collect tax on the purchase, you must report and pay consumer use tax on the purchase price. Usually, these purchases are made from catalogs, over the internet, or by telephone and include items such as: Clothing Books Computers Computer Software Furniture Magazine Subscriptions Sporting Goods Jewelry Electronic Equipment CDs, DVDs, Audio & Video Cassettes Photographic Equipment Musical Equipment Automotive Accessories and Parts ATVs Lawn and Garden Equipment Applicable State Use Tax Rates The general use tax rate of 4% applies to all purchases of merchandise, except where a different rate of tax is expressly provided. The automotive use tax rate of 2% applies to purchases of automotive vehicles. Where any used vehicle is traded-in on the purchase of a new or used vehicle, the tax is due on the trade difference, that is, the price of the new or used vehicle purchased less the credit for the used vehicle taken in trade. The county licensing official will collect the tax due on purchases of automotive vehicles that are required to be titled or registered including purchases of automobiles, trucks, trailers, mobile homes, and motor boats. Do not include purchases of vehicles that are titled or registered in the calculation on the worksheet on page 9. You must report and pay the use tax due on other purchases of automotive vehicles including ATVs, off-road motorcycles, riding lawnmowers, self-propelled construction equipment, and other self-propelled instruments of conveyance. The agriculture use tax rate of 1.5% applies to purchases of machinery or equipment used in connection with the production of agricultural products, livestock, or poultry on farms and the replacement parts for such machinery or equipment. Where any used farm machinery or equipment is traded-in on the purchase of new or used farm machinery or equipment, the tax is due on the trade difference, that is, the price of the new or used machinery or equipment less the credit for the used machinery or equipment taken in trade. Local Use Tax: City and County use tax may also be due and should be reported and paid to the appropriate local tax authority. For information about reporting local use tax please see the department’s web page at www.revenue.alabama.gov. You can use either the Alabama Use Tax Table on page 11 or the worksheet on page 9 if you only have Internet or catalog purchases that do not include automotive vehicles, farm machinery, or farm machinery replacement parts; otherwise use the worksheet on page 9 to compute Alabama Use Tax. For more information regarding consumers use tax call (334) 242-1490. Catastrophe Savings Tax: Withdrawals that exceed the qualified catastrophe expenses during the taxable year, must be included in income. This amount is taxed at an additional 2.5% under Section 40-18-312 (d)(1) unless: (1) the taxpayer no longer owns a legal residence that qualifies pursuant to Chapter 7, or (2) the distribution is made on or after the date on which the taxpayer attains the age of seventy (70) years old and is a self-insured individual who chooses not to obtain insurance on his or her legal residence. Enter the additional tax on Schedule ATP, Part I, line 2. Line 20 Alabama Election Campaign Fund If you wish to make a voluntary contribution to Alabama’s Democratic Party or Republican Party indicate the amount and party by checking the proper box(es) on lines 20a or 20b. Each individual may contribute $1 to either party. If a joint return is filed, each spouse may contribute $1 to either party. If you make a voluntary contribution to this fund it WILL INCREASE your tax by the amount of the contribution. The total amount entered on line 20a or 20b cannot exceed $2 for a married couple filing a joint return or $1 for all other filers. Line 22 Alabama Income Tax Withheld Enter the total Alabama income tax withheld as shown on line 5A. Line 23 2022 Estimated Tax Payments/ Automatic Extension Payment Enter on this line any payments you made on your estimated Alabama income tax (Form 40ES) for 2022 or automatic extension (Form 40V). CAUTION — DO NOT INCLUDE: The amount shown on line 29 of your 2021 Form 40. This is the balance you owed for the tax year 2021, and cannot be claimed as paid on your 2022 estimated tax even though you paid it in 2022. Any overpayment from 2021 that was refunded to you. If you and your spouse paid joint estimated tax but are now filing separate Alabama income tax returns, either of you may claim all of the amount paid, or you can each claim a part of it. Please be sure to show both social security numbers on the separate returns. If you and your spouse paid separate estimated tax but are now filing a joint income tax return, add the amounts you each paid. These instructions also apply if your spouse died dur- ing the year. Name Change. If you changed your name because of marriage, divorce, etc., and you made estimated tax payments using your former name, attach a statement to Form 40 explaining all the payments you and your spouse made in 2022 and the name(s) and social security number(s) under which you made the payments. Caution: It is very important that the social security numbers be the same on your current return, your last year’s return, and all of your estimate vouchers. The Department will be unable to allow you proper credit for your payments unless the numbers are the same. If the Department is unable to verify the amount claimed, you may be requested to submit copies of all your canceled checks substantiating the amount claimed. This will cause considerable delay in processing your return. Line 24 Previous Payments This line is for amended returns only. Enter the amount of your previous payment made with your original return and/or billing notices and amended return(s). Line 25 Refundable Credit This line is only for the refundable portion of Alabama Accountability Act, Adoption Credit, or Historic Tax Rehabilitation Act of 2017 Credit. Enter the amount from Schedule OC, Section F, line F4. Line 26 Alabama Use Tax Table for General Internet and Catalog Purchases Purchases Subject to Use Tax At least But less than Use Tax Due 0 ........ 50 . . . . . . . . 1 50 . . . . . . . . 100 . . . . . . . . 3 100 . . . . . . . . 150 . . . . . . . . 5 150 . . . . . . . . 200 . . . . . . . . 7 200 . . . . . . . . 250 . . . . . . . . 9 250 . . . . . . . . 300 . . . . . . . . 11 300 . . . . . . . . 350 . . . . . . . . 13 350 . . . . . . . . 400 . . . . . . . . 15 400 . . . . . . . . 450 . . . . . . . . 17 450 . . . . . . . . 500 . . . . . . . . 19 500 . . . . . . . . 550 . . . . . . . . 21 550 . . . . . . . . 600 . . . . . . . . 23 600 . . . . . . . . 650 . . . . . . . . 25 650 . . . . . . . . 700 . . . . . . . . 27 700 . . . . . . . . 750 . . . . . . . . 29 750 . . . . . . . . 800 . . . . . . . . 31 800 . . . . . . . . 850 . . . . . . . . 33 850 . . . . . . . . 900 . . . . . . . . 35 900 . . . . . . . . 950 . . . . . . . . 37 950 . . . . . . . . 1,000 . . . . . . . . 39 1,000 . . . . . . . . 1,050 . . . . . . . . 41 1,050 . . . . . . . . 1,100 . . . . . . . . 43 1,100 . . . . . . . . 1,150 . . . . . . . . 45 1,150 . . . . . . . . 1,200 . . . . . . . . 47 1,200 . . . . . . . . 1,250 . . . . . . . . 49 Purchases Subject to Use Tax At least But less than Use Tax Due 1,250 . . . . . . . . 1,300 . . . . . . . . 51 1,300 . . . . . . . . 1,350 . . . . . . . . 53 1,350 . . . . . . . . 1,400 . . . . . . . . 55 1,400 . . . . . . . . 1,450 . . . . . . . . 57 1,450 . . . . . . . . 1,500 . . . . . . . . 59 1,500 . . . . . . . . 1,550 . . . . . . . . 61 1,550 . . . . . . . . 1,600 . . . . . . . . 63 1,600 . . . . . . . . 1,650 . . . . . . . . 65 1,650 . . . . . . . . 1,700 . . . . . . . . 67 1,700 . . . . . . . . 1,750 . . . . . . . . 69 1,750 . . . . . . . . 1,800 . . . . . . . . 71 1,800 . . . . . . . . 1,850 . . . . . . . . 73 1,850 . . . . . . . . 1,900 . . . . . . . . 75 1,900 . . . . . . . . 1,950 . . . . . . . . 77 1,950 . . . . . . . . 2,000 . . . . . . . .
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More about the Alabama Form 40 Booklet Individual Income Tax TY 2022
Form 40 Booklet requires you to list multiple forms of income, such as wages, interest, or alimony .
We last updated the Form 40 Income Tax Instruction Booklet in March 2023, so this is the latest version of Form 40 Booklet, fully updated for tax year 2022. You can download or print current or past-year PDFs of Form 40 Booklet directly from TaxFormFinder. You can print other Alabama tax forms here.
Other Alabama Individual Income Tax Forms:
|Form Code||Form Name|
|Form 40||Alabama Individual Income Tax Return|
|Form 40 Booklet||Form 40 Income Tax Instruction Booklet|
|Form 40NR||Individual Nonresident Income Tax Return|
|Form 40-V||Individual Income Tax Payment Voucher|
|Form 40A||Individual Income Tax Return (Short Form)|
Alabama usually releases forms for the current tax year between January and April. We last updated Alabama Form 40 Booklet from the Department of Revenue in March 2023.
About the Individual Income Tax
The IRS and most states collect a personal income tax, which is paid throughout the year via tax withholding or estimated income tax payments.
Most taxpayers are required to file a yearly income tax return in April to both the Internal Revenue Service and their state's revenue department, which will result in either a tax refund of excess withheld income or a tax payment if the withholding does not cover the taxpayer's entire liability. Every taxpayer's situation is different - please consult a CPA or licensed tax preparer to ensure that you are filing the correct tax forms!
Historical Past-Year Versions of Alabama Form 40 Booklet
We have a total of four past-year versions of Form 40 Booklet in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:
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Form 40 TY 2021
40 Booklet TY 2020.qxp
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While we do our best to keep our list of Alabama Income Tax Forms up to date and complete, we cannot be held liable for errors or omissions. Is the form on this page out-of-date or not working? Please let us know and we will fix it ASAP.