Alabama Department of Revenue Forms & Instructions
Form 20S — S Corporation Income Tax Return Instructions
preamble
Issues Concerning the Preparation of the 2015 Alabama S Corporation Income Tax Return Schedule PC. The Alabama Department of Revenue now requires the use of Schedule PC, Pass Through Credits, when claiming tax credits. The new schedule al - lows the taxpayer to compute the total amount of tax credits allowable. The amounts en - tered on the Schedule PC will carry over to the Form 20S, Schedule G, Line 1. This schedule must be submitted with the return to receive credit(s). See instructions for Schedule PC for additional information. Nexus. Act 2015-505 establishes a factor presence nexus standard for business activity. Substantial nexus in Alabama is established if any of the following thresholds are exceeded during the tax period: $50,000 of property, $50,000 of payroll, $500,000 of sales, or 25% of total property, total payroll or total sales.
General Instructions
REQUIRED ATTACHMENTS. To be considered a complete return and not subject to treatment as a delinquent return due to improper preparation, the following must be attached: 1. A complete copy of Federal Form 1120S including all Federal K-1s, statements, and attachments. Voluminous schedules may be omitted; however, a list of all omitted schedules must be attached and provided if requested. 2. Completed Alabama Schedule K-1 for each person or tax entity that was a share - holder at any time during the taxable year. PAID PREPARER AUTHORIZATION. The check box provided above the signature line on page 4 is used to authorize the Department to discuss Form 20S with the paid preparer. Checking this box can facilitate the process of resolving a problem with the return. PAID PREPARER INFORMATION. Paid preparers must sign and provide the in - formation requested in the Paid Preparer's section of the form. The signature can be made by hand, by rubber stamp, by mechanical device, or a computer program. The preparer must provide the entity with a copy of the prepared return. TIME AND PLACE FOR FILING . The Alabama Form 20S is due by the 15th day of the 3rd month after the end of the tax year. Returns or payments bearing a U.S. Postal Service cancellation no later than mid - night of the due date will be considered timely filed. EXTENSIONS. A six month extension of time for filing Form 20S is granted auto - matically. However, the extension of time for filing the return is not an extension of time for payment of tax. The amount of tax due must be paid on or before the due date of the return without regard to the extension of time to file the return. Make check payable to Alabama Department of Revenue and enclose completed Form PTE-V only if you are making a payment with Form 20S. Do not attach Form PTE- C or the Form PTE-C payment to the Form 20S. Mail returns with payments to: Pass Through Entity P.O. Box 327444 Montgomery, AL 36132-7444 Mail returns without payments to: Pass Through Entity P.O. Box 327441 Montgomery, AL 36132-7441 FORM PTE-V. The Pass Through Entity Payment Voucher (PTE-V) must accom - pany all payments. To obtain a PTE-V, visit our website at www.revenue.alabama.gov .
Specific Instructions
File the 2015 return for calendar year, fiscal year or short year that begins in 2015. Mark the appropriate box at the top of the form for a calendar, fiscal or short year. NOTE: A 52/53 week filer can only file a fiscal year or short year return. At the top, right-hand corner of page 1, check the appropriate box indicating a cal - endar year, fiscal year or short year return. A calendar tax year is 12 consecutive months, beginning January 1 and ending December 31. A fiscal tax year is 12 con - secutive months ending on the last day of any month except December. A short tax year is a tax year of less than 12 months. A 52/53 week tax year is a fiscal tax year that varies from 52 to 53 weeks that ends on a set day of the week but does not have to end on the last day of a month. Also, check the 52/53 week checkbox if the tax return is being filed by an entity with a 52/53 week filing election in place for the tax year. The fiscal year or short year checkbox must be selected for a 52/53 week filer. FILING STATUS. Check the appropriate filing status. ONLY ONE BOX can be checked for the company's filing status. Filing status 1, Corporation operating only in Ala - bama, should be used by taxpayers with 100% Alabama activities. Filing status 2, Multistate corporation, is available as an option to taxpayers whose business activity in Alabama is represented by the apportionment percentage (has operations in Alabama and one or more states). Filing status 3, Separate (Direct) Accounting, should only be used by taxpayers that are directly allocating income/loss and have received prior per - mission from the Alabama Commissioner of Revenue. SCHEDULE A - Computation of Separately Stated and Nonseparately Stated Income/Tax Line 1. Enter the ordinary business income (loss) from page 1 of the federal Form 1120S, U.S. Income Tax Return for an S corporation. Attach a copy of the complete fed - eral Form 1120S. Reconciliation to Alabama Basis - Lines 2 through 10 Line 2. Enter the net amount of short-term and long-term capital gains (losses). Line 3. Enter as a negative amount the amount that salaries and wages were re - duced on the federal return because of the different federal employment credits claimed on the federal return. Line 4. Enter the amount of state and local income taxes paid. Enter the amount of any state and local income tax refunds as a negative amount. Line 5. Enter the net amount of income or (loss) from rental real estate activities. Line 6. Enter the net amount of income or (loss) from other rental activities. Line 7. Enter the net amount of Internal Revenue Code Section 1231 gain or (loss), but do not include any amount for casualty losses. Line 8. Enter net adjustments due to the Federal Economic Stimulus Act. Sched - ule of adjustments must be attached to receive deductions. Line 9. If an S corporation makes interest/intangible payments to a related mem - ber, Schedule PAB should be completed and attached to the S corporation's return. Enter the net amount from Lines 12 and 13 of Schedule PAB on Line 9. Enter the total amount of other items required to reconcile the federal ordinary income (loss) to income on an Alabama basis (attach schedule/statement). Line 10. Net Reconciling Items . Enter the sum of Lines 2 through 9. Line 11. Net Alabama Nonseparately Stated Income or (Loss) . Enter the sum of Line 1 and Line 10. This amount is carried to Line 1, Schedule E. Separately Stated Items (Related to Business Income) Line 12. Contributions . Enter as a negative amount the amount of contributions. Enter the same amount on Line 2, Schedule K, in the Federal Amount column. Line 13. Oil and Gas Depletion . Enter as a negative amount the amount of oil and gas depletion. Enter the same amount on Line 3, Schedule K, in the Federal Amount col - umn. The amount of oil and gas depletion claimed must be computed in accordance with Section 40-18-16(b). Line 14. IRC §179 Expense Deduction . Enter as a negative amount the amount of Internal Revenue Code Section 179 expense deduction. Enter the same amount on line 4, Schedule K, in the Federal Amount column. Line 15. Casualty Losses . Enter as a negative amount the amount of casualty losses. Enter the same amount on Line 5, Schedule K, in the Federal Amount column. Line 16. Portfolio Income or (Loss) Less Expenses . Enter the net amount of in - come or (loss) resulting from reducing portfolio income by the related expenses. Com - plete Schedule K by entering the gross amount of portfolio income on Line 6 (in the Federal Amount column), the interest expense related to the portfolio income on Line 7 InstructIo ns Fo r the PreParatIo n o F alabama DePartment o F revenue s c orpor ation Inf ormation/tax return FORM 20S
INSTRUCTIONS
(in the Federal Amount column), and the remaining expenses related to the portfolio in - come on Line 8 (in the Federal Amount column). Please provide an explanation of the nature and amounts for the total amount entered on Schedule K, Line 8. Line 17. Other Separately Stated Items . Enter the net amount of other separately stated business items. Attach a statement providing the type and amount of each dif - ferent separately stated item. Also enter the amount from Line 17 on Line 9, Schedule K, in the Federal Amount column. Do not include Small Business Health Insurance Premiums. Line 18. Net Separately Stated Items . Enter the sum of Line 12 through Line 17. Line 19. Total Separately Stated and Nonseparately Stated Items . Enter the sum of Line 11 and Line 18. Line 20. Nonseparately Stated Income Allocated and Apportioned to Alabama . Enter the amount from Schedule E, Line 7. See also Schedule K, Line 1 (Alabama Amount column).
TAX DUE, PAYMENTS, AND CREDITS
Line 21. DO NOT compute based on the amount shown on Line 11 or enter the Form PTE-C (composite) payment. Any amount on this line should include only the following: a. LIFO Recapture Tax. For additional information see §40-18-161 Code of Alabama 1975 if converted to an S corporation after December 31, 1989. b. Built-in Gains Tax. Corporations which became S corporations after De - cember 31, 1989 may be liable for this tax. For additional information see §40-18-174 Code of Alabama 1975 . c. Excess Net Passive Income Tax. If an S corporation has subchapter C earnings and profits, passive investment income in excess of 25% of gross receipts, and taxable income at year end, it must pay a tax on the excess net passive income. For ad - ditional information see §40-18-175 Code of Alabama 1975 and Rule 810-3-174-.02. NOTE: You are required to submit a computation schedule. Failure to submit the schedule may result in the assessment of penalties and additional filing requirements. Line 22. Tax Payments, Credits, and Deferrals a. Enter the amount of tax carried over from last year plus any estimated tax payments made with Form PTE-V (attach schedule). b. Enter the amount of tax paid prior to filing Form 20S. c. This line is only to be used if a taxpayer is filing an AMENDED RETURN. The amount shown should be any payments made with the original return and/or any payments made because of adjustments to the return by the Alabama Department of Revenue. d. Tax Credits. Enter the amount from Schedule G, Line 4. (see instructions for Schedule PC for the order in which these credits should be applied) e. Enter total payment and credits (add Lines 22a, 22b, 22c, and 22d). Line 23. Subtract Line 22e from Line 21. Enter as either a positive or negative number. Line 24. Calculation of any reductions of refund or additions to tax. a. If this return is not filed on or before the due date (with extension), enter a fail - ure to timely file penalty of 10% of the tax due on Line 21 or $50 whichever is greater. Tax amounts not paid by the due date will be subject to a failure to timely pay penalty of 1% per month up to a maximum of 25%. Estimated taxes not paid by each due date will be subject to an underpayment of estimated tax penalty in an amount determined by applying the underpayment rate established under 26 U.S.C. §6621, as provided in §40-2A-11. b. Enter the amount of interest due on the balance of tax due. This is to be computed from the due date (without extension) of this return to the date paid. The Ala - bama interest rate is the same as provided in 26 U.S.C. §6621. c. Enter the amount of the overpayment you wish to apply to next year's esti - mated tax. d. Enter the total of Lines 24a, 24b and 24c. Lines 25 and 26. Add Line 23 to Line 24d, if the result is a positive number, this is the amount you owe and it should be entered on Line 26. If the result is a negative num - ber, this is the amount of your refund which should be entered on Line 25. If paying by check or money order, Form PTE-V MUST ACCOMPANY PAYMENT. a. If the amount due is $750 or greater, it must be remitted by electronic funds transfer. Section 41-1-20, Code of Alabama 1975 requires the use of Electronic Funds Transfer (EFT) for all single business tax payments of $750 or more. SCHEDULE B - Allocation of Nonbusiness Income, Loss, and Expense Do not complete Schedule B if entity operates exclusively in Alabama. The purpose of Schedule B is to report nonbusiness income, nonbusiness losses, and nonbusiness expenses, as required. Enter under the Nonseparately Stated Items heading on Line 1a, Line 1b, and Line 1c a description of each nonseparately stated item. For each nonseparately stated item entered on Line 1a, Line 1b and Line 1c: 1. Enter on Column A the total gross income (from all states - everywhere) from the item. 2. Enter on Column B only the Alabama gross income from the item. 3. Enter on Column C the expenses related to the gross income (everywhere) en - tered in Column A. 4. Enter on Column D only the expenses related to the Alabama gross income en - tered in Column B. 5. Enter on Column E the amount resulting from subtracting the expense amount in Column C from the gross income (everywhere) amount in Column A. 6. Enter on Column F the amount resulting from subtracting the Alabama expense amount in Column D from the Alabama gross income amount in Column B. Enter on Column E, Line 1d, the sum of the amounts entered in Column E on Line 1a, Line 1b, and Line 1c. The amount entered in Column E, Line 1d is the net amount of nonseparately stated nonbusiness income items for all states (everywhere). The amount entered in Column E, Line 1d is also entered in Schedule E, Line 2. Please note that when an amount is entered in Schedule E, Line 2, income is entered as a negative amount and losses are entered as a positive amount. Enter on Column F, Line 1d, the sum of the amounts entered in Column F on Line 1a, Line 1b, and Line 1c. The amount entered in Column F, Line 1d is the net amount of nonseparately stated nonbusiness income items to be allocated only to Alabama. The amount entered in Column F, Line 1d is also entered in Schedule E, Line 6. Enter under the Separately Stated Items heading on Line 1e, Line 1f, and Line 1g a description of each separately stated item. For each separately stated item entered on Line 1e, Line 1f and Line 1g: 1. Enter on Column A the total gross income (from all states - everywhere) from the item. 2. Enter on Column B only the Alabama gross income from the item. 3. Enter on Column C the expenses related to the gross income (everywhere) en - tered in Column A. 4. Enter on Column D only the expenses related to the Alabama gross income en - tered in Column B. 5. Enter on Column E the amount resulting from subtracting the expense amount in Column C from the gross income (everywhere) amount in Column A. 6. Enter on Column F the amount resulting from subtracting the Alabama expense amount in Column D from the Alabama gross income amount in Column B. Enter on Column E, Line 1h, the sum of the amounts entered in Column E on Line 1e, Line 1f, and Line 1g. The amount entered in Column E, Line 1h is the net amount of separately stated nonbusiness income items for all states (everywhere). The amount entered in Column E, Line 1h is also entered in Schedule K, Line 11 (Federal Amount column). Enter on Column F, Line 1h, the sum of the amounts entered in Column F on Line 1e, Line 1f, and Line 1g. The amount entered in Column F, Line 1h is the net amount of separately stated nonbusiness income items to be allocated only to Alabama . The amount entered in Column F, Line 1h is also entered in Schedule K, Line 11 (Appor - tioned Amount column). The amount entered in Column F, Line 1h is also entered on Schedule D, Line 4. SCHEDULE C - Apportionment Factor Schedule Do not complete Schedule C if entity operates exclusively in Alabama. Enter 100% on Schedule C, Line 27. The Alabama business activity of a multi-state Alabama S corporation is represented by its Alabama apportionment factor. If any factor is not utilized in the production of busi - ness income it shall be eliminated and the denominator reduced. The use of separate or direct accounting must be approved in writing by the Department.
PROPERTY FACTOR
In the appropriate columns, enter the amounts (at cost, unless stated otherwise) of property available for use in the production of business (apportionable) income. Line 1. Inventories Line 2. Land Line 3. Furniture and fixtures Line 4. Machinery and equipment
Line 5. Buildings and leasehold improvements Line 6. Property financed through industrial development boards or by industrial rev - enue bonds issued by municipalities. All Industrial Development Board property uti - lized by the taxpayer will be included at its original cost basis. Line 7. Government Property. All government property (whether local, state, or federal), when such property is made available for use by the taxpayer, will be reported at its current fair market value. Line 8. Any other real or tangible personal property used in production of business income. Line 9. Less construction in progress (if included in the amounts on Lines 1 through 8). Line 10. Enter in each column the totals of Lines 1 through 9. Line 11. Enter in the appropriate column the average value of property in Alabama and Everywhere. See Alabama Department of Revenue regulation number 810-27-1- 4-.12 for rules regarding computations other than beginning and end of year values. Line 12. In the Beginning of Year columns, enter the amount of expense for the rental of real or tangible personal property used in the production of business income in Alabama and Everywhere. Annualize for short-period returns. Multiply the annual rent expense by 8, and enter the result in the End of Year column. This is the capitalized rental value. Line 13a. Add the amounts on Lines 11 and 12 in the End of Year column for Alabama. Line 13b. Add the amounts on Lines 11 and 12 in the End of Year column for Every - where. Line 14. Divide the amount on Line 13a by the amount on Line 13b. Compute the percentage to at least 4 decimal places, for example, 12.3456%, and enter the per - centage on Line 14. This percentage entered on Line 14 is the ALABAMA PROPERTY FACTOR.
PAYROLL FACTOR
Line 15a. Enter the amount of wages or other compensation paid to employees for the production of business income in Alabama. NOTE: Only amounts paid directly to em - ployees are included in the payroll factor computations for Line 15a and Line 15b. Line 15b. Enter the amount of wages or other compensation paid to employees for the production of business income everywhere. (Include officers' salaries.) Line 15c. Divide the amount on Line 15a by the amount on Line 15b, and enter the number on Line 15c as a four decimal place percentage. The percentage entered on Line 15c is the ALABAMA PAYROLL FACTOR.
SALES FACTOR
Amounts entered in this schedule cannot be negative. Line 16. Enter gross receipts from Alabama destination sales except sales to the U.S. government. This includes total gross receipts from sales of tangible property shipped to Alabama from locations both within and without Alabama (See Alabama De - partment of Revenue regulation number 810-27-1-4-.16). Line 17. Enter the amount of sales shipped from an Alabama origin to any state or foreign country where this company is not taxable. Also enter total sales to the U.S. government shipped from Alabama (See Alabama Department of Revenue regulation number 810-27-1-4-.16). Line 18. In the Alabama column enter the total of Lines 16 and 17. In the Every - where column enter total sales for everywhere. If this amount does not correspond with Line 1 of federal Form 1120S, attach an explanation and reconciliation. Line 19. Enter in the appropriate columns gross business dividends. Line 20. Enter in the appropriate columns the gross business interest income. Line 21. Enter in the appropriate columns the gross business income from rents. Line 22. Enter in the appropriate columns gross business income from royalties. Line 23. Enter in the appropriate columns the gross receipts from the sale or dis - position of assets used in the business. See Alabama Department of Revenue regula - tion number 810-27-1-4-.15 for exclusion of amounts which would distort the factor. Line 24. Enter in the appropriate columns the amounts of other business gross re - ceipts, and identify the nature of such receipts and their location on the federal return. Line 25a. Total the Alabama column for Lines 18 through 24. Line 25b. Total the Everywhere columns for Lines 18 through 24. Line 25c. Divide the amount on Line 25a by the amount on Line 25b, and enter the percentage on Line 25c, as a four decimal place percentage. The percentage entered on Line 25c is the ALABAMA GROSS RECEIPTS FACTOR. Line 26. Enter amount from line 25c. Line 27. Add Lines 14, 15c, 25c and 26. Divide by 4 (except as noted below). Enter here and on Line 3b, Schedule D and on Line 4, Schedule E. Note: If any factor is not utilized in the production of income (there is a zero amount in both Alabama and Everywhere columns), it shall be eliminated and the denomina - tor reduced accordingly. If the entity only has a sales factor then divide by 2. SCHEDULE D - Apportionment of Federal Income Tax Line 1. Enter the amount of federal income tax, if any, from the federal Form 1120S. Enter the same amount on Schedule K, Line 13 (Federal Amount column). If the corporation operated only in Alabama, completion of the remainder of Schedule D is not required and the amount from Line 1 should also be entered on Schedule K, Line 13 (Alabama Amount column). Line 2. Enter the amount of Nonseparately Stated Income Allocated and Appor - tioned to Alabama from Schedule E, Line 7. Line 3a. Enter the amount of Net Separately Stated Items from Schedule A, Line 18. Line 3b. Enter the Alabama Apportionment Factor from Schedule C, Line 27. Line 3c. Multiply the amount on Line 3a by the percentage on Line 3b, and enter on Line 3c. Line 4. Enter the amount of Separately Stated Items Allocated to Alabama from Schedule B, Line 1h, Column F. Line 5. Enter the total of Line 2, Line 3c, and Line 4. Line 6. Adjusted Total Income . Add the Total Separately Stated and Nonseparately Stated Items (Schedule A, Line 19) to the Net Amount of Separately Stated Nonbusi - ness Income Items for All States (Schedule B, Column E, Line 1h), and enter the total on Line 6. Line 7. Federal Income Tax Apportionment Factor . Divide the amount on Line 5 by the Adjusted Total Income on Line 6, and enter the resulting amount as a percentage on Line 7. Enter the amount from Line 7 on Schedule K, Line 13 (Apportionment Fac - tor column). Line 8. Federal Income Tax Apportioned to Alabama . Multiply the amount of fed - eral income tax on Line 1 by the Federal Income Tax Apportionment Factor on Line 7, and enter the resulting amount on Line 8. Enter the amount on Line 8 also on Sched - ule K, Line 13 (Alabama Amount column). SCHEDULE E - Apportionment and Allocation of Income to Alabama Line 1. Enter the Net Alabama Nonseparately Stated Income or (Loss) from Sched - ule A, Line 11. Line 2. Enter the amount of Nonseparately Stated (Income) or Loss Treated as Nonbusiness Income from Schedule B, Column E, Line 1d. Enter a loss amount as a positive amount and an income amount as a negative amount. Line 3. Enter the sum of the amounts entered in Line 1 and Line 2. Line 4. Enter the apportionment factor from Schedule C, Line 27. Line 5. Income or (Loss) Apportioned to Alabama . Multiply the amount in Line 3 by the percentage in Line 4. Line 6. Nonseparately Stated Income or (Loss) Allocated to Alabama as Nonbusi - ness Income . Enter the amount from Schedule B, Column F, Line 1d. Line 7. Nonseparately Stated Income Allocated and Apportioned to Alabama . Enter the sum of the amounts entered in Line 5 and Line 6. The amount in Line 7 should also be entered on Schedule A, Line 20; on Schedule D, Line 2; and, on Schedule K, Line 1 (Alabama Amount column). SCHEDULE F - Alabama Accumulated Adjustments Account This schedule computes the Accumulated Adjustments Account for Alabama (AAAA). The AAAA may not equal the Accumulated Adjustments Account of federal Form 1120S. Adjustments to the AAAA should include the entire earnings, profits, losses, gains and deductions of the S corporation. See also §40-18-166, Code of Alabama 1975. If an item of income is subject to allocation and apportionment, the adjustment is an amount that is in proportion to the amount of the income reportable on the share - holder's return that bears to the amount of income allocated and apportioned to Alabama and is required to be included in the shareholder's return. SCHEDULE G - Tax Credits Line 1. Enter total credits allowable from Schedule PC, Part N, Line 1. Line 2. Enter tax due from Schedule A, Line 21. Line 3. Enter the credit and the amount of the credit used on Schedule A, Line 22d.(see instructions for Schedule PC for the order in which these credits should be applied) Line 4. Enter the total of Lines 3a, 3b, and 3c. Line 5. Subtract Line 4 from Line 1. Enter here and on Schedule K, Line 15. SCHEDULE H - Additional Information Required All S corporations must complete Schedule H providing the required information. SCHEDULE DE - Q-Sub/Disregarded Entity Schedule List all qualified subchapter S subsidiaries (Q-Sub)/disregarded entities in which the
entity holds full ownership interest of 100%. For each entity, provide the name, FEIN, income from all sources, and Alabama source Income. Attach additional schedules as necessary. SCHEDULE K - Distributive Share Items Line 1. Alabama Nonseparately Stated Income . Enter on the Alabama Amount column the Nonseparately Stated Income or (Loss) Allocated and Apportioned to Ala - bama from Schedule E, Line 7. Line 2. Contributions . Enter in the Federal Amount column (as a positive amount) the contributions entered on Schedule A, Line 12. Enter in the Apportionment Factor col - umn the apportionment factor from Schedule C, Line 27. Enter in the Apportioned Amount column the amount that results from multiplying the apportionment factor by the amount of contributions entered in the Federal Amount column. Line 3. Oil and Gas Depletion . Enter in the Federal Amount column (as a positive amount) the oil and gas depletion entered on Schedule A, Line 13 (please also see the form instructions for Schedule A, Line 13). Enter in the Apportionment Factor column the apportionment factor from Schedule C, Line 27. Enter in the Apportioned Amount col - umn the amount that results from multiplying the apportionment factor by the amount of oil and gas depletion entered in the Federal Amount column. Line 4. IRC §179 Expense Deduction . Enter in the Federal Amount column (as a positive amount) the IRC §179 expense deduction entered on Schedule A, line 13. Enter in the Apportionment Factor column the apportionment factor from Schedule C, Line 27. Enter in the Alabama Amount column the amount that results from multiplying the apportionment factor by the amount of IRC §179 expense deduction entered in the Fed - eral Amount column. Line 5. Casualty Losses . Enter in the Federal Amount column (as a positive amount) the casualty losses entered on Schedule A, Line 15. Enter in the Apportionment Factor column the apportionment factor from Schedule C, Line 27. Enter in the Appor - tioned Amount column the amount that results from multiplying the apportionment fac - tor by the amount of casualty losses entered in the Federal Amount column. Line 6. Portfolio Income . Enter in the Federal Amount column the gross amount of portfolio income related to the net amount entered on Schedule A, Line 16. Enter in the Apportionment Factor column the apportionment factor from Schedule C, Line 27. Enter in the Apportioned Amount column the amount that results from multiplying the ap - portionment factor by the amount of portfolio income entered in the Federal Amount column. Line 7. Interest Expense Related to Portfolio Income . Enter in the Federal Amount column the interest expense related to the portfolio income entered on Line 6. Enter in the Apportionment Factor column the apportionment factor from Schedule C, Line 27. Enter in the Apportioned Amount column the amount that results from multiplying the ap - portionment factor by the amount of interest expense entered in the Federal Amount column. Line 8. Other Expenses Related to Portfolio Income . Enter in the Federal Amount column the expenses (other than interest expense) related to the portfolio income en - tered on Line 6 - attach a statement identifying the nature and amounts of the other ex - penses. Enter in the Apportionment Factor column the apportionment factor from Schedule C, Line 27. Enter in the Apportioned Amount column the amount that results from multiplying the apportionment factor by the amount of other expenses entered in the Federal Amount column. Line 9. Other Separately Stated Business Items . Enter in the Federal Amount col - umn the amount entered on Schedule A, Line 17. Enter in the Apportionment Factor column the apportionment factor from Schedule C, Line 27. Enter in the Apportioned Amount column the amount that results from multiplying the apportionment factor by the amount of other separately stated business items entered in the Federal Amount column. Small business health insurance premiums should not be reported here but on Line 10. Line 10. Small Business Health Insurance Premiums. Enter nothing in the Federal Amount column. Enter nothing in the Apportionment Factor column. Enter in the Ap - portioned Amount column 100% of the health insurance premiums paid during the tax - able year that qualify. Attach a computation of the amount entered on Line 10 as an attachment to the return. Line 11. Separately Stated Nonbusiness Items . Enter in the Federal Amount col - umn the amount entered on Schedule B, Column E, Line 1h. Enter nothing in the Ap - portionment Factor column. Enter in the Apportioned Amount column the amount en - tered on Schedule B, Column F, Line 1h. Attach a statement identifying the nature and amounts of the separately stated nonbusiness items. Line 12. Composite Payment Made on Behalf of Owner. Enter nothing in the Fed - eral Amount column and the Apportionment Factor column. Enter in the Apportioned Amount column the amount of total composite payments made on behalf of the owners. Line 13. U.S. Taxes Paid . Enter the amount of U.S. income taxes paid, from Sched - ule D, Line 1, in the Federal Amount column. Enter in the Apportionment Factor column the Federal Income Tax Apportionment Factor from Schedule D, Line 7 (enter 100% if the corporation operated only in Alabama). Enter in the Apportioned Amount column the amount of Federal Income Tax Apportioned to Alabama from Schedule D, Line 8 (if the corporation operated only in Alabama enter the amount from the Federal Amount column). Line 14. Alabama Exempt Income . Enter the total amount of Alabama exempt in - come in the Federal Amount column. Enter in the Apportionment Factor column the ap - portionment factor from Schedule C, Line 27. Enter in the Apportioned Amount column the amount that results from multiplying the apportionment factor by the amount of Ala - bama exempt income entered in the Federal Amount column. Line 15. Total Credits . Enter nothing in the Federal Amount column and the Ap - portionment Factor column. Enter in the Apportioned Amount column total credits from Schedule G, Line 5. Line 16. Property Distributions to Owners . Enter in the Federal Amount column the amount of property distributed to owners. Enter in the Apportionment Factor column the apportionment factor from Schedule C, line 27. Enter in the Apportioned Amount column the amount that results from multiplying the apportionment factor by the amount of prop - erty distributions entered in the Federal Amount column. ALABAMA SCHEDULE K-1 - Owner's Share of Alabama Income, Deductions, Credits, etc. Please note: The term "gross income," in the case of a resident individual, includes income from sources within and outside Alabama, and in the case of a nonresident in - dividual, includes only income from property owned or business transacted in Alabama. The Alabama K-1 has two columns in some boxes of Part III. The first column of Part III is income allocated and apportioned to Alabama. This column should be completed for both residents and nonresident shareholders. The second column of Part III should be completed for resident shareholders only. This column should include the resident shareholder's share of income (loss) from all sources, including income (loss) earned from other states. To be considered a complete return, the Alabama Form 20S must be accompanied by a properly completed Alabama Schedule K-1 for each tax entity that was a share - holder of the Alabama S corporation at any time during the taxable year. Visit the Ala - bama Department of Revenue's website ( www.revenue. alabama.gov ) to obtain a copy of the Alabama Schedule K-1 and the form preparation instructions for the Alabama Schedule K-1.
Source: official text