Form 40NR — Nonresident Individual Income Tax Return Instructions

# PRSRT STD AUTO

U.S. POSTAGE PAID

# MONTGOMERY, AL

PERMIT NO. 109 Please use the return envelope if provided. Important! Use the taxpayer peel-off label located on this booklet for your return. Peel off the label and place it in the address area of the form you file. Make necessary corrections on the label. If someone else prepares your return, give the preparer the preaddressed label and ask the preparer to use it. Use of the peel-off label is necessary for prompt processing of your return. Lake Wheeler, Decatur County www.800alabama.com

# Alabama Department of Tourism and Travel

Photo by Decatur/Morgan County Convention & Visitors Bureau

Index Address Change … 13 Addresses of Taxpayer Service Centers … 2 Alimony or Separate Maintenance Amount paid … 12 Amount received … 11 Amended Return … 14 Amount You Owe … 9 Annuities … 11 Armed Forces, Members of … 4 Business income or (Loss) (Federal Schedule C) … 11 Business Use of Home … 18 Casualty and Theft Losses … 17 Corresponding With Alabama Department of Revenue … 13 Death of Taxpayer … 14 Dependents … 9 Dividend Income … 11 and 19 Domicile … 4 E-Check … 10 Educational Expenses … 18 Employee Business Expenses … 18 Employer-Sponsored Basic Skills Education Credit … 9 Estates and Trusts … 11 and 19 Estimated Tax … 9 and 14 Extension of Time to file … 14 Farm Income or (Loss) … 11 Federal Tax Deduction … 8 and 12 Figuring Your Income Tax … 9, 21 - 26 Filing Requirements - When To File … 4 Where To File … 10 Which Form To File … 5 Who Must File … 4 B F C E A D Filing Status - Which Box To Check … 6 Forms, How To Get … 31 Forms Order Blank … 31 Gains … 11 and 19 General Information … 13 Gifts to Charity … 16 Head of Family … 6 Income (Examples) - You Must Report … 6 You Do Not Report … 7 Income Tax Withheld (Alabama) … 7 Income Tax Deduction (Federal) … 8 and 12 Interest Income … 11 and 19 Interest - Late Payment of Tax … 13 Interest - Penalty on Early Withdrawal of Savings … 12 Individual Retirement Arrangement (IRA) … 12 Itemized Deductions … 8 and 15 Keogh Plan - Deduction For … 12 Losses … 11 and 17 Married Persons - Filing Joint or Separate Return … 6 Medical and Dental Expenses … 15 Military Personnel - Residents of Alabama … 4 Nonresidents of Alabama … 4 Moving Expenses … 12 Miscellaneous Itemized Deductions … 18 Mutual Funds … 19 Name and Address … 5 Nonresidents of Alabama - Which Form To File … 5 Who Must File … 4 Other Income … 8 and 10 O N M L K I H G Partnerships … 11 and 19 Payments - Check/Money Order … 9 Credit Card … 10 and 30 E-Check … 10 Penalty - Criminal Liability … 13 Late Filing … 13 Late Payment of Tax … 13 Other Penalties … 13 Pensions … 11 Personal Exemption … 6 Preparer, Tax Return … 10 Qualified Long-Term Care … 17 Records - How Long To Keep … 13 Refund, When Should I Receive? … 14 and 20 Rents and Royalties … 11 and 19 Requesting a Copy of Your Tax Return … 14 Rounding Off To Whole Dollars … 7 Rural Physician Credit … 9 S Corporations … 11 and 19 Salaries … 7 Schedules A, B, D, E, no Sch. CR on 40NR … 15 - 20 Self-employed Health Insurance Premiums … 12 and 15 Setoff Debt Collection … 14 Sign Your Return … 10 Single Person … 6 Social Security Number … 5 Standard Deduction … 8 Steps For Preparing Your Return … 5 Students and Dependents … 4 Substitute Forms … 13 Tax Assistance for Taxpayers … 2 Tax Tables … 21 - 26 What's New … 3 Q P W T S R Addresses of District Taxpayer Service Centers Alabama income tax assistance may be obtained by visiting or calling any of the Alabama Department of Revenue Taxpayer Service Centers listed below. Additional forms and instructions may also be obtained from these centers. For refund information, call (334) 353-2540. ■ AUBURN, ALABAMA 36831-2929 3300 Skyway Drive P . O. Box 2929 Phone - (334) 887-9549 ■ BIRMINGHAM, ALABAMA 35202-0128 2024 - 3rd Avenue North P .O. Box 10128 Phone - (205) 323-6387 ■ DOTHAN, ALABAMA 36302-5739 344 North Oates Street P .O. Box 5739 Phone - (334) 793-5803 ■ GADSDEN, ALABAMA 35902-1190 235 College Street P .O. Drawer 1190 Phone - (256) 547-0554 ■ HUNTSVILLE, ALABAMA 35814-1487 994 Explorer Boulevard P .O. Box 11487 Phone - (256) 922-1082 ■ MOBILE, ALABAMA 36616-1406 955 Downtowner Blvd. P .O. Drawer 160406 Phone - (251) 344-4737 ■ MONTGOMERY, ALABAMA 36132-7490 1021 Madison Avenue P .O. Box 327490 Phone - (334) 242-2677 ■ MUSCLE SHOALS, ALABAMA 35662-3148 874 Reservation Road P .O. Box 3148 Phone - (256) 383-4631 ■ TUSCALOOSA, ALABAMA 35403-2467 518 19th Avenue P .O. Box 2467 Phone - (205) 759-2571 Where To File

# Form 40NR

Use the envelope that came with your return. If you did not receive an envelope, mail your 2005 Form 40NR to: Alabama Department of Revenue, P.O. Box 327469, Montgomery, AL 36132-7469. ▲

From The Commissioner… "AN AFFIRMATIVE ACTION / EQUAL OPPORTUNITY EMPLOYER" Dear Taxpayer… This booklet is provided to you based on information from your 2005 return. Before you start, please check the "Which Form to File" section on page 5 of these instructions to see which form you should use this year. If you need additional forms, visit our Web site at www.revenue.alabama.gov or you may use the order blank on page 31 of this booklet. One of the primary goals of the Department of Revenue is to provide the most prompt and efficient service. We are continuing to update our processing methods to enable us to make progress toward this goal by using image technology to improve the processing of individual paper returns. This requires all documents/pages to be printed and signed in black ink. If you have documents that have been copied or faxed, please ensure that the resulting document is dark enough to be scanned. You may also file electronically, which will further expedite the processing of your return. The Department of Revenue continues to make improvements to our system. We offer extensions and estimated taxes that can be filed electronically at no charge to you . There are also a variety of ways that payments can be made online, including E-check and credit card payments. (Please refer to pages 10 and 14 for further information.) Please help us continue making improvements by mailing your return as early as possible. We welcome any comments and suggestions you may have for any of our forms or instructions. Be sure to include your name, address, and phone number should we have any questions for you. If you need help in completing your return or if you have a question about your tax return, please call or come by one of our Taxpayer Service Centers in your area. The addresses and phone numbers are listed for your convenience inside the front cover of this booklet. Thank you for your assistance. G. Thomas Surtees Commissioner State of Alabama Department of Revenue(www.revenue.alabama.gov) 50 North Ripley Street Montgomery, Alabama 36132 CYNTHIA UNDERWOODAssistant Commissioner LEWIS A. EASTERLYSecretary G. THOMAS SURTEESCommissioner What's New For 2006? Federal return - The Department now requests that all taxpayers filing Form 40NR attach a complete copy of their 2006 Federal return. E-check - Pay your tax liability using e-checks at no charge! (See instructions page 10.) Extensions - You may now request an extension for a single six (6) month period and extensions can be filed electronically through our Web site. (See instructions page 14.) Refund Status - For the most up-to-date information concerning that status of your current year refund, call (334) 353-2540 or check our Web site in the Individual Section. (See instructions page 20.) Web Site - Check out our updated Web site at www.revenue.alabama. gov for downloadable forms, fill-in-forms, instructions, and the most accurate up-to-date information available. Our Web site also hosts links to PC on-line filing providers supporting the Federal/State electronic filing program.

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Filing 1Information 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 6 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 Ala bama 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 Ala bama driver's license, does not intend to apply for U.S. Citizenship, and intends to ultimately return 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 of change in 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 his/her spouse unless proven otherwise. Military Personnel (Nonresidents). Non resi - dent military personnel merely having a duty station within Alabama (whose legal residence is not Ala - bama) 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 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. However, if a joint return is filed, income from both spouses must be included on the return. Dependent's and Student's Income.Depen - dents 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. If a return is required, the dependent or student can claim a personal exemption of $1,500 and his or her parents may claim a dependent exemption of $300 if they provided more than 50% of the total support. When To File You should file as soon as you can after January 1, 2007, but no later than April 15, 2007. If you file late you may have to pay penalties and interest. (See Penalties and Interest in these instructions.) If you know you cannot meet the April 15 deadline, you should ask for an extension using Form 4868A, Application for Ex ten sion of Time to File Alabama Income Tax Return. This form must be filed by April 15, 2007, or it will not be ap proved. The Department also allows the application for extension to be filed electronically at www.alabamainteractive.org/ How To Use This Instruction Booklet The instructions for Form 40NR 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 when you should receive your refund. • SECTION 5 contains instructions for completing most of the schedules that may be attached to Form 40NR. 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. Y ou Must File A Return If… You were a: and your marital status at the end of 2006 was: and your filing status is: and your gross income was at least: Full Year Single (including divorced and legally separated) Single or head of family $1,875 Resident Married and living with your spouse at the end Married, joint return $3,750 of 2006 (or on the date your spouse died) Married, separate return $1,875 Part Year Single (including divorced and legally separated) Singl e or head of family $1,875 (while an Alabama resident) Resident Married and living with your spouse at the end Married, joint return $3,750 (while an Alabama resident) of 2006 (or on the date your spouse died) Married, separate return $1,875 (while an Alabama resident) Nonresident Single (including divorced and legally separated) Single or head of family over the allowable prorated exemption:Married and living with your spouse at the end Married, joint return See above page for further instructions.of 2006 (or on the date your spouse died) Married, separate return

taxextension/. If April 15 falls on a Satur day, Sunday, or State holiday, the return will be due the following business day. 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 13.) Note: Form 4868A extends the time to file your return without being charged a failure to timely file penalty. However, you will be charged interest at the same rate as currently prescribed by the Internal Revenue Service on any additional tax due when your return is filed. 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 income, which cannot exceed $1500.00. • You are not claiming income or a loss from Schedules C, D, E, or F. • 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. • You are itemizing deductions. 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 sources exceeds the allowable prorated personal exemption. Non residents 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 non-resident during the same tax year. In this case, both the total personal exemption and the dependent exemption must be claimed in 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 incurred during the period of residency. The nonresident return should include only income and deductions incurred during the period of nonresidency.

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Steps for Preparing 2Your Return By following these six useful steps, and reading the specific instructions that follow, 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, even if your return is prepared incorrectly by someone else, you are still responsible. Itemized Deductions.If you itemize deductions (Forms 40 or 40NR), some of the records you need are: • Medical and dental payment records, • Real estate and personal property tax receipts, • Interest payment records for a home mortgage. Step 2 Obtain any forms or schedules you may need. In general, we mail forms and schedules based on the return filed last year. Before filling in your return, look it over to see if you need more forms or schedules. If you think you will need any other forms, get them before you start to prepare your return (see page 31, "How To Obtain Forms"). The fastest way to obtain forms is to download them from our Web site www.revenue.alabama.gov. Step 3 Check your return to make sure it is correct. See Common Mistakes on page 10. Step 4 Use the mailing label we sent you. The label helps us identify your account and saves processing time. Step 5 Sign and date your return. Form 40, 40A, or 40NR is not considered a return unless you sign it. Please sign 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 6 Attach all necessary forms and schedules. Attach the State copies 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 40NR. If you need more space on forms or schedules, attach separate sheets and use the same format as the 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 payment and Form 40V with your return.

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Specific 3Instructions Name and Address Please use the preprinted mailing label and enter your social security number. If you do not have a label, type or print your name, address, and social security number in the appropriate blocks. NOTE: Do not attach your label to the return until the return is completed. Please make sure the information on the label is correct. If your name has changed or if you were married or divorced during the year, please correct the name portion of the label. If you moved during the year and the label shows your old address, correct the label using your new address. Corrections should be made by drawing a line through the incorrect information and adding the new information on the label. 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 that a social security number is reported incorrectly: • failure to place number on return. • memorized wrong number. • copied number wrong. • gave an incorrect number to the tax preparer. • gave your employer an incorrect number. IMPORTANT: Check your W-2 forms. Your em ploy - er 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 name and social security number on line 5. If your spouse is a nonresident alien, has no income, does not have a social security number, and you file a separate return, write "NRA" in the block for your spouse's social security number. 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-5from a Social Security Administration (SSA) office. File it with your local SSA office early enough to get your number before April 15. IMPORTANT: Notify the Social Security Ad min is - tra tion (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 5 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 you were unmarried or separated from your spouse either by divorce or separate maintenance decree. If you check box 1, multiply $1,500 by the percentage on line 11, and enter the result on line 16. Married Joint or Separate Returns? Joint Returns. Most married couples pay less tax if they 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. The State of Alabama does recognize a common law marriage for income tax purposes. You and your spouse can file a joint return if you were living together on December 31, 2006 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 2006, you can file a joint return for 2006. You can also file a joint return if your spouse died in 2007 before filing a 2006 return. For details on how to file a joint return, see Death of Taxpayer on page 14. If you check box 2, multiply $3,000 by the percentage on line 11, and enter the result on line 16. 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 full name and social security number in the spaces on line 5. If your spouse does not file, attach a statement explaining why your spouse is not required to file. If you check box 3, multiply $1,500 by the percentage on line 11, and enter the result on line 16. 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, 2006, you were unmarried or legally separated and meet either test 1 or test 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 for 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, greatgrandchild, 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 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 a dependent on page 9.) 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. If you check box 4, multiply $3,000 by the percentage on line 11, and enter the result on line 16. If you claim "Head of Family" filing status, you must also complete line 5. Show on this line the name, social security number, and relationship of the person that qualifies you as "Head of Family." This person should also be listed in Part V, page 2, line 1a, if you provided over 50% of his or her support. 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 Form 40. If you are required to file both returns, the total personal exemption ($1,500 or $3,000) and the dependent exemption ($300) must be claimed on the part-year return (Form 40). No personal exemption or dependent exemption can then be claimed on the nonresident return (Form 40NR). Income A nonresident of Alabama is subject to tax on all income received within or for services performed in Alabama and amounts received from the sale of property located in Alabama unless specifically exempt. 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. You may need some of the forms and schedules listed below. • Wages including salaries, fringe benefits, bonuses, commissions, fees, and tips.

• Dividends (Schedule B). • Interest (Schedule B) on: bank deposits, bonds, notes, Federal Income Tax Refunds, mortgages on which you receive payments, accounts with saving and loan associations, mutual savings banks, credit unions, etc. • 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 received from and deductible by your spouse or former spouse. • Life insurance proceeds from a policy you cashed in 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). • Lump-sum distributions. • 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 previously de ducted in a prior year and resulted in a tax benefit. • Payments received as a member of a military service generally are taxable except for combat pay and certain allowances. • Jury duty pay. 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 Retire ment 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. • Death benefits received by a designated beneficiary of a peace officer or fireman killed in the line of duty. • 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, 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. • 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 Presi - dent of the United States. • An amount up to $25,000 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 Tuition Contracts (PACT). • All benefits from an Alabama 529 savings plan. 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. Lines 6a through 6c Wages, Salaries, Tips, Etc. Show the name and address of each employer on lines 6a through 6c. Alabama Income Tax Withheld. In column A, headed "Alabama tax withheld", enter the amount of Alabama income tax withheld by each of your employers. The amount withheld is shown on the state copy of your Form W-2 . This copy should be marked "To Be Filed With Your State 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 these taxes as Alabama income tax: • Federal income tax, • FICA tax (Social Security and Medicare), • Local, city, or occupational tax, or

• Taxes paid to another state. Amounts withheld should be listed on the same line with the employer's name and amount of income. Add the amounts in column A and enter the total on line 22. Income From ALL Sources. In Column B headed "All Sources" show the total amount of wages, salaries, fees, commissions, tips, bonuses, and other amounts you were paid before taxes, insurance, etc. were taken out. Be sure to show in column B the total income received from all sources. This includes the income earned in Alabama as well as the income earned outside of Alabama. Even though the income earned outside of Alabama is not taxable to Alabama, it must be included in order to determine the ratio of Alabama income to total income from all sources. This determines the personal exemption, dependent exemption, and itemized deductions or standard deduction you may claim in arriving at the income on which you figure the amount of tax you owe Alabama. The total income from all sources shown in Column B should be computed as if you were a resident of Alabama. (See "Examples of Income You Do Not Report" and "Examples of Income You Must Report" on page 7 for further information on the income which should be included in Column B.) Alabama Income. The amount shown in the box headed "State Wages" on your Alabama Form W-2 should be included in Column C headed "Alabama Income." The amount shown in this box may or may not be the same as the amount taxable for Federal purposes. Report all wages, salaries, fees, commissions, tips, bonuses, and other amounts of income that were earned in Alabama even if you do not have a Form W-2. (These amounts should also have been included in Column B.) 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. 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 and traveling salespeople, and certain homeworkers. If you are deducting business expenses as a statutory employee, report the amount shown in Box 1 of your W-2 form and your expenses on Schedule C. If you are not deducting business expenses, report your income on line 6.

# Line 7

Other Income All taxable income you received that is not reported on lines 6a through 6c should be entered on line 7. This includes interest income, dividends, rents, royalties, gains from sale of property, 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 Part I, page 2, and attach the appropriate schedule(s).

# Line 9

Adjustments to Income If you made payments to an Individual Retire - ment Arrangement (IRA), Keogh Retirement Plan, Self-Employed (SEP), paid self-employment health insurance premiums, incurred penalties for the early withdrawal of funds, or incurred deductible moving expenses, then these items should be shown as an adjustment to income. For more information on the above deductions see the instructions for Part II, page 2 on page 12. The adjustments to income from line 5, Part II should be entered on line 9, page 1.

Line 11

# Alabama Percentage of Adjusted

Total Income You must divide the amount on line 10, Column C, by the amount on line 10, Column B, to determine the ratio of Alabama Adjusted total income to the Adjusted total income from all sources. If the amount in Column C is larger than the amount in Column B, you should enter 100% on line 11. If the amount in Column C is a loss (less than 0) enter 0% on line 11.

# Line 12

Other Adjustments If you paid alimony and/or adoption expenses, you should show these amounts as other adjustments. The total other adjustments to income from line 5, Part III, page 2 should be entered on line 12, page 1. See instructions for Part III, page 2 on page 12 for more information.

# Line 13

Adjusted Gross Income If the amount on line 13, Column C, 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 file Form 40X and attach Form NOL-85 and/or Form NOL-85A. Use the Order Blank in this booklet to request these forms and instructions.

# Line 14

Itemized or Standard Deduction You may elect to itemize your deductions for medical expenses, interest, contributions, taxes, etc. OR you may claim the Standard Deduction, but you cannot claim both. If you elect to claim the Standard Deduction on your 2006 Alabama return and it becomes necessary to change to itemized deductions, you may do so by filing an amended return. You should figure your deduction both ways and claim the one that gives you the larger deduction. If you are married and filing separate Alabama returns, both spouses must itemize their deductions or both must claim the Standard Deduction. Each spouse may claim only the itemized deductions he/she actually paid. See the instructions for Schedule A for items that may be claimed as itemized deductions. Itemized Deductions. If you elect to itemize your deductions, you should check box a on line 14 and complete and attach Schedule A. The amount shown on line 29 of Schedule A should be entered on line 14. Standard Deduction. If you elect to claim the Standard Deduction, you should check box bon line 14, and complete the following worksheet to determine the Standard Deduction allowable on your return. A dependent or student may take the standard deduction even if claimed as a dependent by someone else.

# STANDARD DEDUCTION WORKSHEET

1. Enter the Adjusted Gross Income shown on line 13, column B, page 1, Form 40NR ......... 2. Multiply the amount on line 1 by 20% and enter result ............... 3. If you checked filing status 1, 3, or 4, enter $2,000. If you checked filing status 2, enter $4,000 .......................................... 4. Enter the smaller of line 2 or line 3............................................. 5. Enter the percentage from Form 40NR, page 1, line 11 ......... % 6. STANDARD DEDUCTION ALLOW ABLE. Multiply line 4 by the percentage on line 5. Enter the result here and on line 14, page 1, Form 40NR.... /c6097

# Line 15

Federal Income Tax Deduction A nonresident of Alabama may deduct from Alabama adjusted gross income a portion of the Federal income tax due on the 2006 Federal income tax return. In order to determine the amount deductible, you must complete Part IV, page 2, of Form 40NR. The instructions for completing Part IV are on page 12 of this booklet.

# Line 16

Personal Exemption Enter the personal exemption amount from line 1, 2, 3, or 4 multiplied by the percentage on line 11. A dependent or student may take the personal exemption even if claimed as a dependent by someone else.

# Line 17

Dependent Exemption 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: Son Stepfather Daughter Mother-in-law Stepson Father-in-law Stepdaughter Brother-in-law Legally adopted child Sister-in-law Parent Son-in-law Grandparent Daughter-in-law, or Grandchild if related by blood: Brother Uncle Sister Aunt Stepbrother Nephew Stepsister Niece Stepmother 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 2006 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 2006. 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. If you are married and filing a separate return, you must consider only the amounts you separately furnished out of your income in determining whether or not you provided over 50% of the dependent's support. Do not include any amounts your spouse furnished for the support of the dependent. In figuring total support, you must include money the 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 Part V on page 2. The total credit entered on line 4, Part V, page 2, should be entered on line 17, page 1.

# Line 20a

Figuring Your Tax You must figure your tax from the Tax Tableson pages 21-26 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 20b

Credits From Schedule OC Schedule OC.Schedule OC must be completed if you are claiming an employer-sponsored basic skills education credit, rural physician credit, coal credit, and/or a capital credit. • Basic Skills Education Credit is available to employers who provide basic skills education programs approved by the Alabama Depart ment of Education to its employees. • Rural Physician Credit is available to licensed physicians who practice and residein a small or rural Alabama community of less than 25,000 residents with admission privileges to a small or rural hospital having an emergency room. This credit is limited to 5 years. • Coal Credit is available for corporations producing coal mined in Alabama. See Code of Alabama 1975, §40-18-220. • Capital Credit is available to investing companies and their recipients involved in a project undertaken by certain new businesses to be located in the state and certain expansions of certain existing businesses. This capital credit was enacted by Act 95-187 of the Alabama Legislature and signed into law on June 15, 1995 as the "Capital Credit." For more information regarding the credits listed above and the necessary forms to claim these credits, you should contact: P.O. Box 327410 Montgomery, AL 36132-7410 (334) 242-1000

# Line 23

Amount Paid With Form 4868A (Extension of Time to File) If you filed Form 4868A for an extension of time to file Form 40NR, enter the amount you paid with that form.

# Line 24

2006 Estimated/Composite Tax Payments Enter on this line any payments you made on your estimated Alabama income tax ( Form 40ES) for 2006. Include any overpayments from your 2005 return that you applied to your 2006 estimated tax. (Do not include the balance you paid with your 2005 return in 2006 or any overpayment from 2005 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 during the year. If you are reporting income from a partnership or S corporation which filed Alabama Form PTE-C, any payment made on your behalf should be entered on line 24. The word "PTE-C" should be written on the dotted line. Also, complete the information requested on line 7, Part VI, page 2. 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 40NR explaining all the payments you and your spouse made in 2006 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, 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 26

Amount You Owe (If line 21 is larger than line 25) Subtract line 25 from line 21, and enter the amount on line 26 - this is the amount you owe the State of Alabama. Pay the full amount by check or money order payable to the "Alabama Department of Revenue."

On your payment write your social security number, your daytime telephone number, and "2006 Form 40NR," and remit your payment with Form 40V. Electronic Bank Draft (E-Check): You can pay your taxes due electronically from your bank account online at https://www. officialpayments. com/ echeck/ec_template_standard.jsp. Enter Jurisdiction Code 1100. You will need to have your bank routing number and your checking account number to use this service. There is no charge for this service. Credit Card: You can also pay your taxes due by credit card online at https://www. officialpayments. com/ pc_template_standard .jspor by phone at 1- 800-272-9829. Enter Jurisdiction Code 1100. Discover/NOVUS®, Master Card®, Visa® and American Express® cards are currently being accepted. There is a convenience fee for this service. This fee is paid directly to Official Payments Corporation based on the amount of your tax payment. (See page 30 for more information.) If you are paying with funds on a foreign bank you must include an additional $15 exchange fee. If payment for the full amount of tax due is not paid by the due date of the return, you will be charged interest and will be subject to penalties. (See Penalties and Interest on page 13 of these instructions.) More importantly, if you submit your return without payment , a final assessment may be entered by the Department. A final assessment which is not appealed is as conclusive as a judgment of a circuit court. The Department may then proceed with collection by issuance of legal processes including recording of tax liens, garnishment of wages or bank accounts, levy, or a writ of seizure directed to the county sheriff as provided by Sections 40-1-2, 40-2-11(16), and 40-29-23, Code of Alabama 1975.

# Line 27

Estimated tax penalty If the amount you owe (line 26) exceeds $100.00, you may be subject to an estimate, or underestimation penalty. Page 13 of this booklet provides additional information on these penalties, or you can complete Form 2210AL. See page 31, "How To Obtain Forms".

# Line 28

Overpayment (If line 25 is larger than line 21) Subtract line 21 from line 25, and enter the amount on line 28 - this is the amount you overpaid.

# Line 29

Applied to 2007 Estimated Tax You may elect to credit all or part of the overpayment shown on line 28 to your 2007 estimated Tax. Once an election is made to apply this overpayment to your 2007 estimated tax, it cannot later be refunded to you or applied to pay additional tax for 2006.

# Line 30

Refunded to You Subtract the amount on line 29 from the amount on line 28. If your return is complete and contains no errors, you should receive your refund within 8 to 12 weeks after you mail it. See When Should I Receive My Refund?on page 14 of this booklet for further information about your refund. Sign Your Return Form 40NR is not considered a return unless you sign it. Please sign in black ink only. Your spouse must also sign if it is a joint return. If you are filing a joint return with your deceased spouse, see Death of Taxpayer on page 14. Did You Have Someone Else Prepare Your Return? If you fill in your own return, the Paid Preparer's Use Onlyarea should remain blank. Someone who prepares your return but does not charge you should not sign. Generally, anyone who is paid to prepare your tax return must sign your return and fill in the other blanks in the Paid Preparer's Use Onlyarea of the return. If you have questions about whether a preparer is required to sign a return, please contact an Alabama Taxpayer Service Center. The preparer required to sign your return MUST: • Sign, by hand, in the space provided for the preparer's signature. (Signature stamps or labels are not acceptable.) • Give you a copy of your return for your records in addition to the copy to be filed with the Alabama Department of Revenue. BEFORE signing and mailing your return,you should review it to make sure the preparer has entered the correct name(s), address, and social security number(s) in the spaces provided and reported all of your income. REMEMBER, you are responsible for the information on your return even if you pay someone else to prepare it. Please enter your daytime phone number. This will enable us to contact you and help speed your refund if there are any problems with processing your return. Common Mistakes Which Delay Refunds Errors delay your refund. This checklist should help you file your form correctly. 1. Is your address correct on the preprinted label? If not, did you correct the label? 2. If you took the standard deduction, did you use the worksheet on page 8? 3. Did you include your W-2 forms and any other forms? Did you assemble all forms and sche dules in the proper order? (See Step 6 on page 5.) 4. Is your math correct? (Note: Check your math carefully when figuring your refund or amount you owe.) 5. Did you find the correct tax in the Tax Table for your filing status and taxable income? 6. Did you write your social security number, daytime phone number, and "2006 Form 40NR" on your check or money order? 7. Did you sign and date your tax form? If you want the Department to contact your tax preparer, please give permission to do so by checking the box above the signature line. Where To File Use the envelope that came with your return. We encourage the use of this envelope since it will expedite the processing of your return. If you did not receive an envelope with your booklet, mail your return, payment and Form 40V to: P.O. Box 327469 Montgomery, AL 36132-7469 Mail only your 2006 Form 40NR to the above address. Prior year returns, amended returns, and any correspondence pertaining to your return should be mailed to: Individual and Corporate Tax Division P.O. Box 327464 Montgomery, AL 36132-7464 Part I, Page 2 Other Income All taxable income other than salaries, wages, commissions, etc. that is not reported on lines 6a through 6c on page 1 should be reported in Part I, page 2. The total other income from all sources should be reported in Column B under the heading "All Sources." The income reported in Column B should be the same as would be reported by a resident of Alabama. Example: You may be required to report interest income from obligations of the U.S. Government on your federal return, but since this income is not taxable to Alabama it should not be included in Column B. All income you listed in Column B earned in the State of Alabama should also be listed in Column C under the heading "Alabama Sources." Use only the lines and schedules applicable to your types of income.

# Line 1

Interest and Dividend Income Any interest or dividend income received in 2006 with Alabama business situs should be reported in Column C. All other interest or dividend items that would normally be taxable to an Alabama resident should be reported in Column B. Note: Interest or Dividend items received from pass through entities such as Partnerships or S-Corporations should not be reported as separate line items on Schedule B, but should be included in total on the Alabama Schedule E. If you received dividends and interest income of more than $1500 in 2006, you must complete and attach Schedule B . Enter the taxable amount shown in Schedule B on line 1, Part I.

# Line 2

Alimony Received Alimony and separate maintenance payments received by a nonresident of Alabama in 2006 are not taxable for Alabama purposes. However, any amounts you received in 2006 must be included in the total adjusted gross income from all sources to the same extent that it is includable on your 2006 Federal return. The amount received should be listed in Column B only. Do not include amounts you received which are child support.

# Line 3

Pensions and Annuities Pension and annuity payments received by a nonresident are not subject to Alabama tax. However, pension and annuity payments you received in 2006 that would be taxable to a resident of Alabama must be included in the total adjusted gross income from all sources in order to compute the ratio of Alabama adjusted gross income to total adjusted gross income from all sources. Payments you received from any of the following are not taxable and should not be included in the income reported on line 3. • State of Alabama Teachers' Retirement. • State of Alabama Employees' Retirement. • State of Alabama Judicial Retirement. • United States Civil Service Retirement. • Retirement systems created by the Federal Social Security Acts. • Railroad retirement benefits received under the Federal Railroad Retirement Acts of 1935 and 1937. • Military Retirement Pay. • TVA Pension System Benefits. • U.S. Foreign Service Retirement and Disability Fund Annuities. • U.S. Government Retirement Fund Benefits. • Any Defined Benefit Retirement Plan in accordance with IRC 414(j). (Contact your retirement plan administrator to determine if your plan qualifies.) Enter on line 3 the taxable portion of all pensions and/or annuities you received in 2006 that would be taxable to a resident of Alabama. The amount to be reported would be the same as reported on your Federal return except for income from those sources previously listed as exempt.

# Line 4

Business Income or (Loss) If you conducted a business or practiced a profession during the taxable year, you must complete and attach a copy of Federal Schedule C or C-EZ to your Alabama return. Generally, you may deduct the ordinary and necessary expenses of doing business - the cost of merchandise, salaries, interest, taxes, rent, repairs, and incidental supplies. In the case of capital investments and improvements in depreciable property such as buildings, machines, and similar items having a useful life of more than one year, Alabama law provides for a "reasonable allowance" for depreciation over the useful life of the property. If some of your expenses are part business and part personal, you can deduct ONLY the business portion. Adjustments to Federal Schedules C and F. Alabama law differs from federal law in the treatment of some of the expenses shown on Federal Schedules C and F and certain items may need adjusting for Alabama purposes. The expenses which may need adjusting are: • Percentage Depletion Gas and Oil.In the case of oil and gas wells, the allowance for depletion shall be 12 percent of the gross income from the property during the taxable year, excluding from such gross income an amount equal to any rents or royalties paid or incurred by the taxpayer in respect to the property. Such amounts shall not exceed 50 percent of the net income of the taxpayer, computed without allowance for depletion, from the property, except that in no case shall the depletion allowance be less than the amount allowable under federal income tax law. • Cost Depletion Natural Resources Other than Gas and Oil. Alabama law has no provision for percentage depletion of natural resources other than gas and oil, as currently allowed under federal law. For Alabama purposes, the depletion allowance shall be computed using the cost depletion method. • Depreciation. Alabama law allows IRC Section 179 Expense for all taxable years beginning after December 31, 1989. Adjustments may be necessary if assets were acquired and placed in service prior to tax years beginning January 1, 1990. • Targeted "Jobs Credit."You may have been allowed to take a portion of your payroll expense as a "Targeted Jobs Credit" on your federal return. This is an allowable expense for Alabama income tax purposes. • Passive Activity Losses. Alabama law has no provision, similar to current federal law, which limits the deduction of passive trade or business activity losses. If you have adjustments involving any of the previously described expenses, attach an explanation and show the adjustment as "Other Expenses" on Federal Schedule C or F. The net profit or (loss) from business, as shown on Federal Schedule C-EZ or C after above ad just - ments (if applicable), should be entered on line 4, Part I. The net profit or (loss) from all operations within and without Alabama, as shown on Federal Schedule C, after above adjustments (if applicable), should be entered on line 4, Part I, Column B. The net profit or (loss) from operations in Alabama should be entered in Column C.

# Line 5

Gain or (Loss) from Sale of Real Estate, Stocks, Bonds, Etc. If you sold real estate, stocks, bonds, or other assets in 2006 the net gain or (loss) should be entered in column B. The net gain or (loss) from the sale of property located in Alabama should also be entered in Column C. If you sold your personal residence, any gain realized is taxable to the same extent as reported on your federal return. Please see the instructions for Schedule D for further information.

# Line 6

Rents, Royalties, Partnerships, Estates, Trusts, S Corporations You must complete and attach Schedule E if you received income in 2006 from any of these sources. The instructions for completing Schedule E are on page 19 of this booklet.

# Line 7

Farm Income or (Loss) If you operated a farm during the year, you must attach Federal Schedule F to your return. Alabama law differs from Federal law in the treatment of some of the expenses shown on Federal Schedule F. These differences are discussed in the instructions for line 4, Part I. If any of these adjustments apply to your return, you should show the additional amounts as "Other Expenses" on Federal Schedule F.

The net profit or (loss) from farm operations, within and without Alabama, should be entered on line 7, Column B. The net profit or (loss) from farm operations in Alabama should also be entered in Column C.

# Line 8

Other Income Enter on line 8 any other income you cannot find a place for on your return or on another schedule. State the nature and source in the space provided, or attach a separate explanation. The total other income from all sources should be entered in Column B, and only the other income earned in Alabama should be entered in Column C. Note: Net operating losses are not allowed as a deduction on line 8 (Other Income). Net operating losses can only be claimed on Form NOL-85A.

Part II, Page 2 Adjustments To Income

# Line 1

Individual Retirement Arrangement (IRA), Keogh Retirement Plan, and SEP Deduction Contributions to Individual Retirement Ar range - ments, Keogh retirement plans, and self-employed SEP deduction are deductible as an adjustment to income from "All Sources" in Column B. The amount deductible in Column C is limited to the contributions made from income attributable to Alabama sources. The amount deductible in Columns B and C is subject to the same limitations as on your federal return. However, when figuring the limitation on the amount deductible you must use the adjusted gross income shown on line 13, Columns B and C and of your Alabama Return.

# Line 2

Penalty on Early Withdrawal of Savings The Form 1099-INTgiven to you by your bank or savings and loan association will show the amount of any penalty you were charged for withdrawing funds from your time savings deposit before its maturity. Enter this amount on line 2, Column B only. (Be sure to include the interest income on line 1, column B, Part I.) Note: Penalties on early withdrawal from retirement plans are not deductible.

# Line 3

Moving Expenses Employees and self-employed persons (including partners) may deduct certain moving expenses as an adjustment to gross incometo the same extent and subject to the same limitations as currently allowed under Federal rules with the following exception: - The new job location must be within the State of Alabama. This deduction may be taken if you moved in connection with your job or business and your new workplace in Alabama is at least 50 miles farther from your old residence than your old workplace was from your former residence. If you had no former workplace, your new workplace must be at least 50 miles from your old residence. Only expenses incurred in the moving of household goods and personal effects from the former residence to the new residence and traveling expenses, including lodging while en route to the new location, are deductible. Expenses which are no longer deductible include the cost of meals while en route to the new location, pre-move house hunting trips, temporary living expenses, closing costs of selling the old house, costs of purchasing a new house, and costs incurred in settling an unexpired lease. If you meet the requirements, complete and attach Federal Form 3903 to figure the amount of moving expenses. Enter the total and the new job location as indicated on line 3.

# Line 4

Self-employed Health Insurance Deduction Premiums paid for self-employed health insurance are deductible as an adjustment to income from "ALL SOURCES" in Column B to the same extent as determined in accordance with the Internal Revenue Code Section 162. The amount deductible in Column C is limited to premiums paid based on the percentage of Ala bama self-employment income to total self-employment income.

Part III, Page 2 Other Adjustments

# Line 1

Alimony Enter the total amount of alimony paid as shown on your federal return. You can deduct payments of alimony or separate maintenance made under a court decree to the same extent allowed for federal income tax purposes. Do not deduct lump-sum cash or property settlements, voluntary payments not made under a court order or a written separation agreement or amounts specified as child support.

# Line 2

Adoption Expenses Enter the total amount of adoption expenses you paid or incurred. The reasonable medical and legal expenses paid or incurred by a nonresident taxpayer in connection with the adoption of a minor may be deducted. The term "medical expenses" include any medical and hospital expenses of the adoptee and the adoptee's biological mother which are incident to the adoptee's birth, and subsequent medical care and which, in the case of the adoptee, are paid or incurred before the petition is granted. Adoption agency fees are not deductible. The expenses allowed in your 2006 return are limited to those expenses paid or incurred on or after January 1, 2006, even though adoption proceedings may have begun before this date.

# Part IV, Page 2

Federal Income Tax Deduction The Federal Income Tax allowed as a deduction to a nonresident of Alabama is the total Federal Income Tax shown on the 2006 Federal Return reduced by any Self-Employment Tax. The balance is then prorated by the percentage of income earned in Alabama to the total income from all sources. Selfemployment, social security, and Medicare taxes can only be claimed if you itemize deductions on Schedule A. If you filed a joint Federal Return and have elected to file a separate Alabama Return, you must complete all lines in Part IV to determine your allowable deduction. If you are single or married and filing a joint Alabama Return with your spouse, you should skip lines 1 through 4. If you are a nonresident alien with income earned in Alabama, the deduction for Federal Income Tax should be computed by applying the ratio of Alabama source income to total income received from sources within the United States. In other words, in the case of a nonresident alien, total income from all sources does not include foreign source income that is not required to be reported for Federal Income Tax purposes. Alabama income is determined for nonresident aliens in the same manner as for other nonresidents.

Line 1 Enter your Adjusted total income from page 1, line 10, Columns B and C.

# Line 2

Enter on line 2, Column B, your spouse's total Adjusted Gross Income not included in line 1 above but included on your joint Federal Income Tax Return.

# Line 3

Add lines 1 and 2 to obtain the total adjusted gross income from all sources of both spouses.

# Line 4

Divide the amount on line 1, Column C, by the

amount on line 3, Column B. Enter the percentage on line 4 and line 6.

# Line 5

Enter the Federal income tax liability shown on your 2006 Federal income tax return. (1) Form 1040EZ - enter the amount from line 11. (2) Form 1040A - enter the amount from line 37. (3) Form 1040 - enter the amount from line 57. (The amount on line 57 should be in creased by any amount on line 60.) (4) Form 1040NR- enter the amount from line 52. (The amount on line 52 should be increased by any amount on line 55.) 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 2.

# Line 6

If you completed lines 1 through 4, enter the percentage from line 4. If you were not required to complete lines 1 through 4, enter the percentage shown on line 11, page 1, Form 40NR.

# Line 7

Multiply the amount on line 5 by the percentage on line 6. This is your Federal income tax deduction. Enter the amount on this line and on line 15, page 1, Form 40NR. Part V, Page 2 Dependents Before completing this section, see page 9 of these instructions for the definition of a dependent. Please follow the line-by-line instructions on Form 40NR to complete this section.

Part VI, Page 2

General Information

# ALL TAXPAYERS MUST COMPLETE THIS SECTION

Please follow the line-by-line instructions on Form 40NR to complete this section.

# SECTION

General 4Information This section contains general information about items such as amending your tax return, how long to keep records, filing a return for a deceased person, and when you should receive your refund. Substitute Tax Forms You may not use your own version of a tax form unless it meets the requirements of the Alabama Department of Revenue. All privately designed and printed substitute tax forms must be approved by the Alabama Department of Revenue.

# Penalties and Interest

Interest. Interest is charged on taxes not paid by their due date even if an extension of time is granted. If your return is not filed by the due date and you owe additional tax, you should add interest from April 15, 2007 to date of payment. Submit payment of the tax and interest with your return. Alabama law provides that the same rate of interest shall be collected as currently prescribed by the Internal Revenue Service. Any of the Alabama Taxpayer Service Centers listed in this booklet will provide you the current rate of interest in effect at the time your return is filed. Failure To Timely File Return. You can avoid this penalty by filing your return by the due date. Alabama law provides a penalty of 10% of the tax due or $50, whichever is greater, if the return is filed late. Attach a full explanation to the return if you can show reasonable cause for filing a delinquent return. Failure To Timely Pay Tax. The penalty for not paying the tax when due is 1% of the unpaid amount for each month or fraction of a month that the tax remains unpaid. The maximum penalty is 25%. Estimate Tax Penalty. Failure to file quarterly estimated tax will result in a penalty equal to 10% of any additional tax to be paid or $50 whichever is greater. (See Estimated Tax on the following page for more information.) Underestimation Tax Penalty. If 90% of the tax, in the case of individuals other than farmers (exercising an election under Section 40-18-82) exceeds the estimated tax paid there shall be added to the tax an amount equal to such excess or equal to 6% of the amount by which such tax exceeds the estimated tax, whichever is lesser. Note: If you include interest, a failure to timely file, or a failure to timely pay penalty with your payment, identify and enter these amounts in the bottom margin of Form 40NR, page 1. The only penalties to be included on lines 26 and 27 of Form 40NR are the estimate or underestimation penalties. Refer to form 2210AL for instructions on how to calculate the estimate and underestimation penalty. Other Penalties.There are also penalties for underpayment due to negligence, underpayment due to fraud, and filing a frivolous return. Any person failing to file a return as required by Alabama law or rendering a false or fraudulent return will be assessed. The assessment will be based on the best information obtainable by the Department with respect to the income of the taxpayer. In the case of a willfully false or fraudulent return having been rendered, the Department shall add a penalty of not more than 50% of such tax. This penalty is in addition to any interest due as described above. Criminal Liability. Section 40-29-112, Code of Alabama 1975, as amended, provides for a more severe penalty for not filing tax returns. Any person required to file a return under this title who willfully fails to make such return shall be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $25,000 or imprisoned not more than 1 year, or both. Section 40-29-110 provides that any person who willfully attempts to evade any tax imposed by this title or the payment thereof shall be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 or imprisoned for not more than 5 years, or both. These penalties are in addition to any other penalties provided for by Alabama law. Address Change If you move after filing your return and expect a refund, you should notify the Department of Revenue and send a change of address notice to:

# Alabama Department of Revenue, Individual and

Corporate Tax Division, P.O. Box 327410, Mont - gom ery, AL 36132-7410 . This will help us forward your check to you as soon as possible and allow us to mail next year's forms to your new address. Corresponding With

# Alabama Department of

Revenue Be sure to include your social security number and phone number in any correspondence with the Alabama Department of Revenue. How Long Should Records Be Kept? Keep records of income, deductions, and credits shown on your return, as well as any worksheets used to figure them, until the statute of limitations runs out for that return. Usually this is 3 years from the date the return was filed. If income that should have been reported was not reported and the income omitted is in excess of 25% of the stated income, the period of limitation does not expire until six (6) years after the due date of the return or six (6) years after the date the return was filed, whichever is later. There is no period of limitation when a return is false or fraudulent, or when no return is filed.

Also keep copies of your filed tax returns as part of your records. You should keep some records longer than the period of limitation. For example, keep property records (including those on your own home) as long as they are needed to figure the basis of the original or replacement property. Copies of your tax returns will help in preparing future returns, and they are necessary if you file an amended return. Copies of your returns and your other records may be helpful to your survivor, or the executor or administrator of your estate. Requesting a Copy of Your Tax Return If you need a copy of your tax return or tax account information use Form 4506-A , Request for Copy of Tax Form or Income Tax Account Information. The charge for a copy of a return is $5. There is no charge for tax account information. Amended Return If you have already filed a return and become aware of any changes to income, deductions, or credits, you should file Form 40X, Amended Alabama Individual Income Tax Return, to change that return. Note: If your State return is changed for any reason, it may affect your federal income tax liability. This includes changes made as a result of an examination of your return by the Alabama De part ment of Revenue. Contact the Internal Revenue Serv ice for more information. Death of Taxpayer If the taxpayer died before filing a return for 2006, the taxpayer's spouse or personal representative must file a return for the person who died if the deceased was required to file a return. A personal representative can be an executor, administrator, or anyone who is in charge of the taxpayer's property. The person who files the return should write "DE- CEASED" after the decedent's name. Also write "DECEASED," the decedent's full name, and date of death across the top of the tax return. If the taxpayer did not have to file a return but had tax withheld, a return must be filed to receive a refund. If your spouse died in 2006, you can file a joint return even if you did not remarry in 2006. You can also file a joint return if your spouse died in 2007 before filing a 2006 return. A joint return should show your spouse's 2006 income before death and your income for all of 2006. Also write "Filing as surviving spouse" in the area where you sign the return. If someone else is the personal representative, he or she must also sign. If you are claiming a refund as a surviving spouse filing a joint return with the deceased and you follow the above instructions, no other form is needed to have the refund issued to you. Please note: An Alabama refund of a de - ceased taxpayer cannot be issued to a third party. Payment of Estimated Tax Every individual who reasonably expects to have net income in 2007 from sources other than salaries and wages in excess of the following amounts is required to file Form 40ES and remit payment of Estimated Tax: (1) $1,875 - if a single person (including head of family), or a married person filing a separate return, or (2) $3,750 - if a married person and filing a joint return. Note: If the TOTAL ESTIMATED TAX for 2007 is less than one hundred dollars ($100), an estimate is not required to be paid. Income from other sources includes interest income, dividends, self-employment income, etc. The procedures for filing and paying estimated tax and the due dates are similar to Federal Income Tax Law. Do not include payment of your estimated tax with the payment for tax due on your individual return because the quarterly voucher and remittance MUST be mailed separately. Additional instructions for filing your estimate are on the back of Form 40ES. No refund will be made for any estimated taxes paid except when such amount is taken as a credit on an income tax return filed at the end of the taxable year by the payor or his authorized representative, or on an amended income tax return if the full amount paid is not claimed on the original income tax return. Application for Extension (Form 4868A) If you know you cannot file your return by the due date, you should file Form 4868A, Application for Extension of Time to File Alabama Income Tax Return. Your application for extension can be filed electronically at www.alabamainteractive.org/ taxextension/. Except in cases where taxpayers are abroad, no extension will be granted for more than 6 months. Applications for extension must be filed electronically or filed on Form 4868A in time for consideration by the Department before the due date of the return. An approved extension means only that you will not be assessed a penalty for failure to timely file a return. Interest is due on any additional tax not paid by the original due date. Other penalties such as the underpayment due to negligence and the under - payment due to fraud will be assessed, if applicable, even if you have an approved extension. Note: The Department will notaccept Federal Form 4868 "Automatic Extension of Time to File Your Federal Return" in lieu of Alabama Form 4868A "Application for Extension of Time to File Your Alabama Return." Setoff Debt Collection If you owe money or have a delinquent account under any of the following public assistance programs, your refund may be applied to offset that debt. • Any and all of the public assistance programs administered by the Alabama Department of Human Resources including the Child Support Act of 1979, Chapter 10 of Title 38. • Any and all of the assistance programs administered by the Alabama Medicaid Agency. • Overpayment of unemployment compensation. • Any and all court fees/fines owed to the Administrative Office of Courts. If the Alabama Department of Human Re - sources, the Alabama Department of Industrial Relations, the Administrative Office of Courts, or the Alabama Medicaid Agency notifies the Alabama Department of Revenue that you have a delinquent account in excess of $25, part or all of your refund may be applied to offset that debt. If you are married and filing a joint return, the joint refund may be applied to offset any of these debts. IMPORTANT: If you have been assessed taxes from a prior year, your current year refund will be applied to that debt even if the liability resulted from a jointly filed return. Federal Refund Offset Program Your 2006 federal or state refund will be taken to satisfy any outstanding liabilities owed to the State of Alabama or to the Internal Revenue Service. When Should I Receive My Refund? If you are due a refund, it will be mailed to you at the earliest possible date. Normally, it takes from 8 to 12 weeksto process your return and get your refund to you. The earlier you file your return the sooner you will receive your refund. If you do not receive your refund within 90 days of the due date or within 90 days after you file your return, whichever is later, the State will pay you interest and include it with your refund. It may take longer than 12 weeks to process your refund if it is incomplete or incorrect. Your refund may be delayed for the following reasons: • Your name and/or address is incorrect. • Your social security number is incorrect or not shown in the space provided. • You failed to attach all of your withholding statements (W-2 Forms).

• You failed to attach one or more of the supporting schedules. • You made an error in figuring your return. • You mailed your return to the wrong address. • You filed more than one return. • You submitted a copy instead of the original return. • You have not paid all taxes due for a prior year. • The Department needs additional information to explain the income or deductions reported on your return. • The Alabama Department of Human Re sources has notified the Alabama Department of Revenue that your account is delinquent on a debt repayment, or any public assistance program (including the Child Support Act of 1979, Chapter 10, Title 38). ( Note: See Setoff Debt Collection on this page for further information.) • Your return was not properly signed. If you are due a refund and discover, after mailing your return, that you failed to attach your withholding statement(s) or supporting sched ule(s) to your return, do notmail this information until the Department requests it. If you mail it before the Department notifies you, your refund may be further delayed. The Department requests that you wait 12 weeks before inquiring about your refund.If you do not receive it within 12 weeks, call our Refund Hotline at (334) 353-2540, or complete Form IT:489. This form can be obtained at our web site generalforms. htm or at any of our Alabama Taxpayer service Centers listed on page 2 of this booklet. If you find it necessary to call about your refund, you should have a copy of your return in front of you.

SECTION Instructions for 5Schedules to

Form 40NR Instructions For

# Schedule A Itemized Deductions

Changes You Should Note The itemized deductions you may claim on your Alabama return are similar to the deductions allowed for federal purposes; however, certain items may be treated differently. Please see the instructions which follow for an explanation of these differences. Purpose of Schedule Some taxpayers should itemize their deductions because they will save money. See Itemized or Standard Deduction on page 8. If you itemize, you can deduct part of your medical and dental expenses, certain taxes, contributions, and certain miscellaneous deductions. A nonresident of Alabama must prorate these deductions by the ratio of Alabama adjusted gross income to total adjusted gross income from all sources. Unreimbursed business expenses may be deducted if the business expenses were incurred while earning Alabama income. Married, Filing Separate Returns. If you are married and filing separate Alabama returns, both spouses may itemize their deductions or both may claim the standard deduction. One spouse cannot itemize and the other claim the standard deduction. Each spouse may claim only the itemized deductions he/she actually paid. Part-year Residents and Part-year Non resi - dents. If you were a resident of Alabama for a part of 2006 and you are required to file Form 40, you may claim only the itemized deductions you actually paid while a resident of Alabama. If you had income from Alabama sources during the period you were not a resident of Alabama you should also file Form 40NR. You should claim on your nonresident return only the itemized deductions actually paid during the period you were a nonresident. Lines 1 through 4 Medical and Dental Expenses Before you can figure your total medical and dental expenses, you must complete your Form 40NR, page 1, lines 1-13. Medical and dental expenses are allowed as itemized deductions to the same extent as allowed for federal purposes with the following exception: • You may deduct only that part of your medical and dental expenses that is more than 4% of the amount on Form 40NR, line 13, Column B. Do not include in medical and dental expenses insurance premiums paid by an employer-sponsored health insurance plan (cafeteria plan). You can deduct self-employment health insurance premiums to the same extent as federal purposes.

# Line 1

Enter the total of your medical and dental expenses after reducing these expenses by any payments received from insurance or other sources. Include amounts you paid for doctors, dentists, nurses, hospitals, prescription medicine and drugs, or insulin. Also include the total amount you paid for insurance premiums for medical and dental care, amounts paid for transportation and lodging, and other expenses such as hearing aids, dentures, eyeglasses, and contact lenses. If your insurance company paid your doctor or dentist directly for part of your medical expenses, and you paid only the amount that remained, include in your medical expenses ONLY the amount you paid. If you received a reimbursement in 2006 of prior year medical or dental expenses, do not reduce your 2006 expenses by this amount. You must include the reimbursement in income on Form 40NR, line 8, Part I, page 2 if you deducted the medical expense in the earlier year and the deduction reduced your tax. Federal Pub. 502 tells you how to figure the amount to include in income. When figuring the deduction, you may include medical and dental bills you paid for: • Yourself. • Your spouse. • All dependents claimed on your return. • Your child whom you do not claim as a dependent because of the federal rules explained for Children of Divorced or Separated Parents. Examples of Medical and Dental Payments You CAN Deduct To the extent you were not reimbursed, you can deduct what you paid for: • Medicare Part B insurance. • Prescription medicines and drugs, or insulin. • Premiums paid to private insurers for additional Medicare coverage. • Medical doctors, dentists, eye doctors, chiropractors, osteopaths, podiatrists, psychiatrists, psychologists, physical therapists, acupuncturists, and psychoanalysts (medical care only). • Medical examinations, X-ray and laboratory services, insulin treatment, and whirlpool baths the doctor ordered. • Nursing help. If you pay someone to do both nursing and housework, you can deduct only the cost of the nursing help. • Hospital care (including meals and lodging), clinic costs, and lab fees. • Medical treatment at a center for drug addicts or alcoholics. • Cost of a weight-loss program for the purpose of treating diagnosed obesity or another recognized disease. Cost must be out-of-pocket and uncompensated. • Medical aids such as hearing aid batteries, braces, crutches, wheelchairs, guide dogs, and the cost of maintaining them. • Lodging expenses (but not meals) paid while away from home to receive medical care in a hospital or a medical care facility that is related to a hospital. Do not include more than $50 a night for each eligible person.

• Ambulance service and other travel costs to get medical care. If you used your own car, you can claim what you spent for gas and oil to go to and from the place you received medical care, or you can claim 18 cents a mile. Add parking and tolls to the amount you claim under either method. Examples of Medical and Dental Payments You CANNOT Deduct • Premiums paid by an employer-sponsored health insurance plan (cafeteria plan). • The basic cost of Medicare Insurance (Medi care A). Note: If you were 65 or older but not entitled to social security benefits, you may deduct premiums you voluntarily paid for Medicare A coverage. • Life insurance or income protection policies. • The 1.45% Medicare (hospital insurance benefits) tax withheld from your pay as part of the social security tax, or the Medicare tax paid as part of social security self-employment tax. • Nursing care for a healthy baby. • Illegal operations or drugs. • Nonprescription medicines or drugs. • Travel your doctor told you to take for rest or change. • Funeral, burial, or cremation costs. Federal Pub. 502has a discussion of expenses that may and may not be deducted. It also explains when you may deduct capital expenditures and special care for handicapped persons. Lines 5 through 9 Taxes (Other than Federal Income Tax) You CAN Deduct If deductions are itemized, you CAN DEDUCT the following taxes: • Real estate taxes (line 5). Include taxes you paid on property you own in any state that was not used for business. If you pay real estate taxes as part of your mortgage payments do not take a deduction for that amount. Deduct the taxes in the year the mortgage company actually paid them to the taxing authority. • FICA tax (Social Security and Medicare) (line 6). You can deduct the FICA tax (Social Security and Medicare) withheld on your income by your employer. If you worked for more than one employer resulting in more than the maximum FICA tax being withheld, the excess amount claimed as Federal Income Tax Withheld on your federal return cannot be claimed as an itemized deduction on your Alabama return. • Federal Self-Employment taxes (line 6). You can deduct the federal self-employment tax you paid during the year 2006 for the tax year 2005 and/or prior years. • Railroad Retirement tax (line 7). You can deduct the railroad retirement tax you paid in 2006. Only your contribution to tier one railroad retirement is deductible as an itemized deduction. • Other taxes (line 8). In addition to the above taxes, you can also deduct: (a) City, County, and Occupational Tax as shown on your W-2. (b) State Unemployment Insurance Tax (S.U.I.). Employees were not required to pay S.U.I. Tax in 2006 since the full amount was paid by their employer. However, if S.U.I. Tax was paid to a state other than Alabama, it may be deducted. (c) Federal gift taxes.Federal gift taxes are deductible only if you are the person making the gift and you paid the tax. (The person receiving the gift cannot claim this deduction even though he paid the tax.) (d) Personal property taxes. This tax must be based on the value alone. For example, if part of the fee you paid for the registration of your car was based on the car's value and part was based on its weight, you can deduct only the part based on value. (e) Generation-Skipping Transfer (GST) taxes. Generation-Skipping transfer taxes imposed on income distributions by 26 U.S.C. 2601 are deductible if you paid or accrued the taxes within the taxable year. Taxes You CANNOT Deduct include but are not limited to • State income taxes. (If you owe taxes to the State of Alabama, you may be entitled to a credit against the taxes you owe to the state of which you are a legal resident. See instructions for that state.) • State and local sales taxes. • Income tax you paid to a foreign country. • Taxes you paid for another person. • License fees (marriage, driver's, dog, hunting, pistol, etc.). • Civil Service Retirement contributions (State or Federal). • Federal excise tax on personal property, transportation, telephone, and gasoline. • Customs duties. • Gasoline tax. • State utility taxes. • Tax on liquor, beer, wine, cigarettes, and tobacco. • Car inspection fees. • Taxes you paid for your business or profession. (Use Schedule C, E, or F to deduct these business expenses.) • Assessments for sidewalks or other im prove - ments to your property. Lines 10a through 13 Interest You Paid The interest you paid that can be claimed as an itemized deduction is limited in most cases to the same amount as currently allowable for federal purposes. You should show on Schedule A interest you paid on nonbusiness items only. Whether your interest expense is treated as investment interest, personal interest, or business interest depends on how and when you used the loan proceeds. Note: Personal interest is no longer deductible. Complete and attach Alabama Form 4952A if you are claiming investment interest as an itemized deduction. If you qualify for the Mortgage Interest Credit on your Federal return, the total interest you paid (before the credit) is deductible for Alabama purposes. For further information describing the interest you may deduct, refer to federal instructions and publications. Lines 14 through 17 Gifts to Charity Contributions are allowable as itemized deductions to the same extent as currently allowed for federal purposes. However, when determining the 50% and special 20% and 30% limitations, you must use adjusted gross income from Column B, line 13. You can deduct what you gave to organizations that are religious, charitable, educational, scientific, or literary in purpose. You can also deduct what you gave to organizations that work to prevent cruelty to children or animals. Examples of these organizations are: • Churches, temples, synagogues, Salvation Army, Red Cross, CARE, Goodwill Industries, United Way, Boy Scouts, Girl Scouts, Boys and Girls Clubs of America, etc. • Fraternal orders if the gifts will be used for the purposes listed above. • Veteran's and certain cultural groups. • Nonprofit schools, hospitals, and organizations with the purpose of finding a cure for or helping people who have arthritis, asthma, birth defects, cancer, cerebral palsy, cystic fibrosis, diabetes, heart disease, hemophilia, mental illness or retardation, multiple sclerosis, muscular dystrophy, tuberculosis, etc. • Federal, state, and local governments if the gifts are solely for public purposes. If you contributed to a charitable organization

and also received a benefit from it, you can deduct only the amount that is more than the benefit you received. If you do not know whether you can deduct what you gave to an organization, check with that organization or with the IRS. Contributions You MAY Deduct Contributions may be in cash (keep canceled checks, receipts, or other reliable written records showing the name of the organization and the date and amount given), property, or out-of-pocket expenses you paid to do volunteer work for the kinds of organizations described above. If you drove to and from the volunteer work, you may take 14 cents a mile or the actual cost of gas and oil. Add parking and tolls to the amount you claim under either method. (But don't deduct any amounts that were repaid to you.) Limit on the amount you may deduct Get Federal Pub. 526 to figure the amount of your deduction if any of the following applies: • Your cash contributions or contributions of ordinary income property to certain organizations are more than 30% of Form 40NR, page 1, line 13, Column B. • Your gifts of capital gain property to certain organizations are more than 20% of Form 40NR, page 1, line 13, Column B. • You gave gifts of property that increased in value or gave the use of property as gifts. You MAY NOT Deduct as Contributions • Travel expenses (including meals and lodging) while away from home unless there was no significant element of personal pleasure, recreation, or vacation in the travel. • Political contributions. • Dues, fees, or bills paid to country clubs, lodges, fraternal orders, or similar groups. • Value of any benefit, such as food, entertainment, or merchandise that you received in connection with a contribution to a charitable or gan i zation. Example. You paid $100 to a charitable organization to attend a fund-raising dinner. To figure the amount of your deductible charitable contribution, subtract the value of the dinner from the total amount you paid. If the value of the dinner was $40, your deductible contribution is $60. • Cost of raffle, bingo, or lottery tickets. • Cost of tuition. • Value of your time or services. • Value of blood given to a blood bank. • The transfer of a future interest in tangible personal property (generally, until the entire interest has been transferred). • Gifts to: a. Individuals. b. Foreign organizations. c. Groups that are run for personal profit. d. Groups with the purpose of lobbying for changes in the laws. e. Civic leagues, social and sports clubs, labor unions, and chambers of commerce. Record Keeping. If you gave property, you should keep a receipt or written statement from the organization you gave the property to, or a reliable written record that shows the organization's name and address, the date and location of the gift, and a description of the property. You should also keep reliable written records for each gift of property that include the following information: a. How you figured the property's value at the time it was given. (If the value was determined by an appraisal, you should also keep a signed copy of the appraisal.) b. The cost or other basis of the property if you must reduce it by any ordinary income or capital gain that would have resulted if the property had been sold at its fair market value. c. How you figured your deduction if you chose to reduce your deduction for gifts of capital gain property. d. Any conditions attached to the gift. Note: If your total deduction for gifts of property is over $500, or if you gave less than your entire interest in the property, or you made a "qualified conservation contribution" under Federal Section 170(h), your records should contain additional information. See Federal Pub. 526 for details.

# Line 14

Enter the total contributions you made in cash or by check (including out-of-pocket expenses).

# Line 15

Enter the contributions of property. If you gave used items such as clothing or furniture, deduct their fair market value at the time you gave them. Fair market value is what a willing buyer would pay a willing seller when neither has to buy or sell and both are aware of the conditions of the sale. If the amount of your deduction is more than $500, you must complete and attach Federal Form 8283 , Noncash Charitable Contributions. If your total deduction is over $5,000, you may also need appraisals of the values of the donated property. For this purpose, the "amount of your deduction" means your deduction BEFORE applying any income limitations that could result in a carryover of contributions. See Federal Form 8283 and its instructions for details.

# Line 16

Enter on line 16 any carryover of contributions that you were unable to deduct in an earlier year because it exceeded your adjusted gross income limit.

# Line 18

Qualified Long-term Care Coverage Premiums paid pursuant to a qualifying insurance contract for qualified long term care coverage paid by the taxpayer may be deducted on line 18. Qualified long-term care services include care for necessary diagnostic, preventive, therapeutic, and rehabilitative services and maintenance or personal care services which are required by a chronically ill individual in a qualified facility or services which are provided pursuant to a place of care prescribed by a licensed health care practitioner.

# Line 19

Miscellaneous Deductions Expenses NOT Subject to the 2% Limit Most miscellaneous deductions cannot be deducted in full, but must be reduced by 2% of the Alabama adjusted gross income. The deductions which may be claimed on line 19 that are NOT subject to the 2% limit are as follows: • Gambling losses to the extent of gambling winnings. Report gambling winnings on Form 40NR, line 8, Part I, page 2. • Deduction for repayment of amounts under a claim of right if more than $3,000. See Federal Pub. 525. • Unrecovered investment in a pension. • Impairment-related work expenses of a disabled person. List the type and amount of each expense. Enter one total in the amount space for line 19.

# Line 20

Proration of Above Amounts The amounts shown in lines 1 through 19 should be the amounts for the entire period that the return covers. In most cases, these amounts will be the same as shown on your Federal return. Follow the instructions on lines 20 through 22 to determine the portion of these expenses that apply to your Alabama income. Lines 23a, b, and c Casualty and Theft Losses A casualty or theft loss is determined in the same manner as determined on your federal return with the following exceptions: • A nonresident of Alabama may deduct only those losses where the property was located in Alabama at the time of loss. • The loss may be claimed only in the year during which the loss occurred or the theft was discovered. • The loss on personal property must be reduced

by 10% of the Alabama adjusted gross income as shown on Form 40NR, page 1, line 13, column C. Use lines 23a, b, and c to report casualty or theft losses of Alabama property that is not a trade or business, income-producing, or rent or royalty property. Complete and attach Federal Form 4684 to figure your loss. Enter on line 23a of Alabama Schedule A the amount of loss as shown on line 16 (Section A) of Form 4684. Losses You MAY Deduct You may be able to deduct all or part of each loss caused by theft, vandalism, fire, storm, and car, boat, and other accidents or similar causes. You may also be able to deduct money you had in a financial institution but lost because of the insolvency or bankruptcy of the institution. You may deduct nonbusiness casualty or theft losses only to the extent that - a. the amount of EACH separate casualty or theft loss is more than $100, and b. the total amount of ALL Alabama losses during the year is more than 10% of your adjusted gross income on Form 40NR, page 1, line 13, column C. Special rules apply if you had both gains and losses from nonbusiness casualties or thefts. Get Federal Form 4684 for details. Losses You MAY NOT Deduct • Money or property misplaced or lost. • Breakage of china, glassware, furniture, and similar items under normal conditions. • Progressive damage to property (buildings, clothes, trees, etc.) caused by termites, moths, other insects, or disease. Use line 25 of Schedule A to deduct the costs of proving that you had a property loss. (Examples of these costs are appraisal fees and photographs used to establish the amount of your loss.) For more details, refer to federal instructions and publications. Lines 24 through 28 Miscellaneous Deductions Expenses Subject to the 2% Limit Most miscellaneous deductions cannot be deducted in full. You must subtract 2% of your Alabama adjusted gross income from the total. You figure the 2% limit on line 27. A nonresident of Alabama should show on lines 24 through 28 only those expenses incurred in earning Alabama income. Generally, the 2% limit applies to job expenses you paid for which you were not reimbursed (line 24). The limit also applies to certain expenses you paid to produce or collect taxable income (line 25). See the instructions for lines 24 and 25 for examples of expenses to deduct on these lines. The 2% limit does not apply to certain other miscellaneous expenses that you may deduct. See the instructions for line 19 for examples of these expenses.

# Line 24

Use this line to report Alabama job expenses you paid for which you were not reimbursed. In some cases you must first fill out Federal Form 2106, Employee Business Expenses. Fill out Form 2106 if: 1. You claim any travel, transportation, meal, or entertainment expenses for your job; OR 2. Your employer paid you for any of your job expenses reportable on line 24. If 1 or 2 above applies, enter the net deductible amount from Federal Form 2106 on line 24 of Schedule A. Caution: Federal Form 2106 must be adjusted to include only job expenses related to your Alabama source income. If you do not have to fill out Form 2106, just list the type and amount of your expenses on the space provided on line 24. If you need more space, attach a statement showing the type and amount of the expense. Enter one total in the amount space on line 24. Examples of expenses to include on line 24 are: • Travel, transportation, meal, or entertainment expense. (Note: If you have any of these expenses, you must use Federal Form 2106for all your job expenses.) • Union dues. • Safety equipment, small tools, and supplies you used in your job. • Uniforms your employer said you must have and which you may not usually wear away from work. • Protective clothing required in your work such as hard hats, safety shoes, and glasses. • Physical examinations your employer said you must have. • Dues to professional organizations and chambers of commerce. • Subscriptions to professional journals. • Fees to employment agencies and other costs to look for a new job in your present occupation even if you do not get a new job. • Education expenses you paid that were required by your employer, or by law or regulations, to keep your salary or job. In general, you may include the cost of keeping or improving skills you must have in your job. For more details, see Federal Pub. 508, Educational Expenses. Some educational expenses are not deductible. See Expenses You MAY NOT Deduct. • Business use of part of your home, but ONLY if you use that part exclusively and on a regular basis in your work and for the convenience of your employer. For details, including limits that apply, see Federal Pub. 587 , Business Use of Your Home. • Deduction for repayment of amounts under a claim of right if $3,000 or less.

# Line 25

Use this line for amounts you paid for the production or collection of taxable income; for the management, conservation, or maintenance of property held for the production of taxable income; or in connection with the determination, collection, or refund of any tax. List the type and amount of each expense in the space provided on line 25. If you need more space, attach a statement showing the type and amount of each expense. Enter one total in the amount space for line 25. Examples of these expenses are: • Tax return preparation fee. • Safe deposit box rental. • Certain legal and accounting fees. • Clerical help and office rent. • Custodial (e.g., trust account) fees. • Your share of the investment expenses of a regulated investment company. • Certain losses on nonfederally insured deposits in an insolvent or bankrupt financial institution. For more information (including limits on the amount you can deduct). Expenses You MAY NOT Deduct Some expenses are not deductible at all. Examples are: • Political contributions. • Personal legal expenses. • Lost or misplaced cash or property (but see Casualty and Theft Losses). • Expenses for meals during regular or extra work hours. • The cost of entertaining friends. • Expenses of going to or from work. • Education that you need to meet minimum requirements for your job or that will qualify you for a new occupation. • Expenses of: a. Travel as a form of education. b. Attending a seminar, convention, or similar meeting unless it is related to your employment. • Fines and penalties.

Instructions For

# Schedule B Interest and Dividend Income

Purpose of Schedule Use Schedule B if you are filing Form 40NR and had more than $1500 in interest and dividend income in 2005. Mutual Fund. If you received a 1099-DIV, or 1099-INT, or Substitute Statement from a mutual fund or brokerage firm, you must include the total interest or dividends shown on that form on Schedule B, line 1. Nonresidents are required to report interest or dividend income with an Alabama business situs in Column C of Schedule B (Regulation 810-3-14-.05). All other personal interest or dividend income received in 2006 that would be taxable to a resident of Alabama should be included in the total adjusted gross income from all sources.

# Line 1

Report on line 1 the total interest and dividends you received in 2006. This does not include interest reported on your Schedule K. Lines 2 and 3 A resident of Alabama is not taxed on interest received from the following sources: (1) Obligations of the United States or any of its possessions. (2) Obligations of the State of Alabama. (3) Obligations of county, municipality or other subdivision of Alabama. If you received income from any of these sources, list the source and amount(s) on lines 2a through 2d. Add the amounts on these lines and enter the total on line 3. Instructions For Schedule D Gain or (Loss) From Sale of Real Estate, Stocks, Bonds, Etc. Purpose of Schedule Use Schedule D (Form 40NR) to report the sale or exchange of real estate, stocks, bonds, and other assets. Mutual Fund. If you received a mutual fund or brokerage statement reporting capital or ordinary gains, you must include these amounts on Schedule D, on line 1. The gain or profit from any sale, exchange, or other disposition by a nonresident of real or tangible property located in Alabama is taxable even though it is not connected with a business carried on in this State. The gain or (loss) realized from the disposition of property located outside of Alabama is not taxable to a nonresident, but the gain or (loss) must be included in the total adjusted gross income from all sources in order to compute the ratio of Alabama adjusted gross income to total adjusted gross income from all sources. The gain or profit of a nonresident from the sale, exchange, or other disposition of intangible personal property including stocks, bonds, and other securities, is ordinarily not taxable and should not be included in gross income except to the extent that such intangible personal property has acquired a business situs in Alabama. Likewise, losses sustained from the sale, ex change, or other disposition of such property are not deductible except to the extent that they are losses incurred in a business carried on within Alabama by the nonresident taxpayer. Gain from Sale of Personal Residence. If you sold your personal residence, any gain realized is taxable to the same extent as reported on your federal return. If the personal residence was not located in Alabama, the gain should be reported in column B only. If the personal residence was located in Alabama, the gain should be reported in Columns B and C. A loss sustained on the sale of a personal residence is NOT deductible. If a taxpayer elects to determine gain under 26 USC 1033 (relating to involuntary conversions), the amount of gain recognized for Alabama purposes shall be determined in accordance with the same federal statute.

# Line 1

Enter on line 1, the total gain or (loss) from the sale of all assets not subject to Alabama tax.

# Line 2

The gain from the sale of all Alabama assets should be reported in detail in columns a through f. If more space is needed, use separate sheets with identical column headings. Instructions For

# Schedule E Supplemental Income

Part I (Lines 1 through 5) Rents and Royalties If you received rent from property owned or controlled by you, or royalties from copyrights, mineral leases and similar rights, report the total amount received on lines 1 through 5 of Schedule E. If property other than cash was received as rent, its fair market value should be reported. A reasonable allowance for the exhaustion, wear and tear, and obsolescence of property used in a trade or business, or of property held by the taxpayer for the production of income, shall be allowable as a depreciation deduction. The allowance does not apply to inventories or stock-in-trade nor to land apart from the improvements or physical development added to it. Federal 179 Depreciation Expense allowed by 26 U.S.C § 179 is allowable depreciation for Alabama purposes. The total net gain from all rents and royalties from sources outside Alabama should be shown on line 1. Income from rents and royalties from property located in Alabama should be detailed in columns 2a through 2e. If more space is needed, use separate sheets with identical column headings. The net gain or (loss) from all items listed in lines 1 through 4 should be entered on line 5. Part II (Lines 6 and 7) Partnerships, Estates, Trusts, S Corporations Use lines 6 and 7 to report income you re ceived from partnerships, estates, trusts, and S corporations. Alabama taxes income from these sources only to the extent the income was earned in Alabama. List the income you received from these sources on lines 6a through 6e. Show the name, address, and FEIN of each partnership, estate, trust, etc. Report the total income received from these sources in Column B and only the income earned from Alabama sources in Column C. Partnerships. If you are a partner of a partnership doing business in Alabama, you should receive an Alabama Schedule K-1 from the partnership. Report your share of the income (whether you received it or not) or net loss (not to exceed your basis) of the partnership in Part II. A nonresident must pay tax on his share of Alabama income from the partnership. Beginning with the 2001 tax year, Alabama law required composite filing for all partnerships with nonresident members. In addition to reporting your share of the partnership's profit or loss on Alabama Schedule E, any composite payments made on your behalf should be claimed on line 24 of Form 40NR and write "PTE-C" on the dotted line. Include on page 2, Part VI, line 7 the name and FEIN of any partnership that has made a composite payment on your behalf. For the 2006 tax year, partnerships are given the option to opt out of the composite requirement. in order to opt out, the partnership must obtain an affidavit from nonresident partners stating the nonresident partner will file and pay their own tax on the partnerships income. Estates and Trusts.Nonresidents are taxed on income from estates and trusts only to the extent that the income was earned in Alabama. The administrator, executor, or trustee should advise you of the

There are two automated ways to check the status of your current year refund. 1. Check our Web site. Go to www.revenue.alabama.gov, then click on "Individual" and then "Where's My Refund." 2. The Alabama Department of Revenue's Voice Refund Inquiry System (VRIS) is a 24 hour a day Refund Hotline. The Department installed the Refund Hotline to serve the taxpayers of Alabama more efficiently and effectively. The Refund Hotline is a simple, easy way for individuals to check on their Alabama income tax refund. To access the hotline, all the taxpayer needs is a touchtone phone, and a copy of their current year tax return. How does it work? The individual, with a copy of their return in hand, calls the Refund Hotline, (334) 353-AL40 (2540). The individual is asked to enter the following information by pressing the numbers on their phone keypad:

# Step 1: The Form Type

Press 1 for Form 40A Press 2 for Form 40 Press 3 for Form 40NR Press 4 for an electronically filed return Step 2: The first taxpayer's social security number (all nine digits). Step 3: The filing status from the return. Press 1 for Single Press 2 for Married Filing Joint Press 3 for Married Filing Separate Press 4 for Head of Family Step 4: The whole dollar amount of the refund. After this information is entered and verified, a message will inform the individual of the status of the refund. Simple, quick, and easy! NOTE: INCORRECT INFORMATION MEANS AN INCORRECT ANSWER. All of the information you enter by phone must match all the information on the Revenue Depart ment's computer system exactly, or you will be told that your return is not in our system. If you are told that the Department does not have your return, DO NOT PANIC! Did you enter the information correctly? If you are not sure, try again. If you did enter the information correctly, has your return been mailed long enough for it to be entered into the Department's computer system? Please allow enough time for your return to be entered into the system before calling back. The Department monitors the time it takes for a return to be entered into the Department's computer system and adjusts the time in the messages accordingly. The closer to April fifteenth that you file your return, the longer it will take to be entered into the system. Remember, make sure you obtain a copy of your return from your tax preparer because the Refund Hotline is not just the quickest and easiest way to check on your refund, it is the best way to check on your refund. Refund Status amount to report. S Corporations. An "Alabama S Corporation" means any domestic corporation or foreign corporation qualified to do business or doing business in Alabama which has in effect an election to be an S corporation under 26 U.S.C. Section 1362. If you are a shareholder of an Alabama S corporation, you should receive an

# Alabama Schedule

K-1 (Form 20S) from the S corporation. Report your share of the income (whether you received it or not) or net loss (not to exceed your basis)of the corporation in Part II. A nonresident must pay tax on his share of an Alabama S corporation's income. If you claim credit for taxes paid by an S Cor po - ra tion on your behalf, enter this amount on line 24 of Form 40NR, and write "PTE-C" on the dotted line. Also complete the information requested on page 2, Part VI, line 7. The net gain or (loss) from all items listed in lines 6a through 6e should be entered on line 7. Also include these amounts in summary on line 8 of Part III.

If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - Under $1,000 05 000 50 100 1 1 100 200 3 3 200 300 5 5 300 400 7 7 400 500 9 9 500 600 12 11 600 700 16 13 700 800 20 15 800 900 24 17 900 1,000 28 19 1,000 1,000 1,100 32 22 1,100 1,200 36 26 1,200 1,300 40 30 1,300 1,400 44 34 1,400 1,500 48 38 1,500 1,600 52 42 1,600 1,700 56 46 1,700 1,800 60 50 1,800 1,900 64 54 1,900 2,000 68 58 2,000 2,000 2,100 72 62 2,100 2,200 76 66 2,200 2,300 80 70 2,300 2,400 84 74 2,400 2,500 88 78 2,500 2,600 92 82 2,600 2,700 96 86 2,700 2,800 100 90 2,800 2,900 104 94 2,900 3,000 108 98 3,000 3,000 3,100 113 102 3,100 3,200 118 106 3,200 3,300 123 110 3,300 3,400 128 114 3,400 3,500 133 118 3,500 3,600 138 122 3,600 3,700 143 126 3,700 3,800 148 130 3,800 3,900 153 134 3,900 4,000 158 138 If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 4,000 4,000 4,100 163 142 4,100 4,200 168 146 4,200 4,300 173 150 4,300 4,400 178 154 4,400 4,500 183 158 4,500 4,600 188 162 4,600 4,700 193 166 4,700 4,800 198 170 4,800 4,900 203 174 4,900 5,000 208 178 5,000 5,000 5,100 213 182 5,100 5,200 218 186 5,200 5,300 223 190 5,300 5,400 228 194 5,400 5,500 233 198 5,500 5,600 238 202 5,600 5,700 243 206 5,700 5,800 248 210 5,800 5,900 253 214 5,900 6,000 258 218 6,000 6,000 6,100 263 223 6,100 6,200 268 228 6,200 6,300 273 233 6,300 6,400 278 238 6,400 6,500 283 243 6,500 6,600 288 248 6,600 6,700 293 253 6,700 6,800 298 258 6,800 6,900 303 263 6,900 7,000 308 268 7,000 7,000 7,100 313 273 7,100 7,200 318 278 7,200 7,300 323 283 7,300 7,400 328 288 7,400 7,500 333 293 7,500 7,600 338 298 7,600 7,700 343 303 7,700 7,800 348 308 7,800 7,900 353 313 7,900 8,000 358 318 If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 8,000 8,000 8,100 363 323 8,100 8,200 368 328 8,200 8,300 373 333 8,300 8,400 378 338 8,400 8,500 383 343 8,500 8,600 388 348 8,600 8,700 393 353 8,700 8,800 398 358 8,800 8,900 403 363 8,900 9,000 408 368 9,000 9,000 9,100 413 373 9,100 9,200 418 378 9,200 9,300 423 383 9,300 9,400 428 388 9,400 9,500 433 393 9,500 9,600 438 398 9,600 9,700 443 403 9,700 9,800 448 408 9,800 9,900 453 413 9,900 10,000 458 418 10,000 10,000 10,100 463 423 10,100 10,200 468 428 10,200 10,300 473 433 10,300 10,400 478 438 10,400 10,500 483 443 10,500 10,600 488 448 10,600 10,700 493 453 10,700 10,800 498 458 10,800 10,900 503 463 10,900 11,000 508 468 11,000 11,000 11,100 513 473 11,100 11,200 518 478 11,200 11,300 523 483 11,300 11,400 528 488 11,400 11,500 533 493 11,500 11,600 538 498 11,600 11,700 543 503 11,700 11,800 548 508 11,800 11,900 553 513 11,900 12,000 558 518 If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 12,000 12,000 12,100 563 523 12,100 12,200 568 528 12,200 12,300 573 533 12,300 12,400 578 538 12,400 12,500 583 543 12,500 12,600 588 548 12,600 12,700 593 553 12,700 12,800 598 558 12,800 12,900 603 563 12,900 13,000 608 568 13,000 13,000 13,100 613 573 13,100 13,200 618 578 13,200 13,300 623 583 13,300 13,400 628 588 13,400 13,500 633 593 13,500 13,600 638 598 13,600 13,700 643 603 13,700 13,800 648 608 13,800 13,900 653 613 13,900 14,000 658 618 14,000 14,000 14,100 663 623 14,100 14,200 668 628 14,200 14,300 673 633 14,300 14,400 678 638 14,400 14,500 683 643 14,500 14,600 688 648 14,600 14,700 693 653 14,700 14,800 698 658 14,800 14,900 703 663 14,900 15,000 708 668 15,000 15,000 15,100 713 673 15,100 15,200 718 678 15,200 15,300 723 683 15,300 15,400 728 688 15,400 15,500 733 693 15,500 15,600 738 698 15,600 15,700 743 703 15,700 15,800 748 708 15,800 15,900 753 713 15,900 16,000 758 718 At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is- $23,000 23,000 23,100 1,113 1,073 23,100 23,200 1,118 1,078 23,200 23,300 1,123 1,083 23,300 23,400 1,128 1,088 23,400 23,500 1,133 1,093 EXAMPLE: Mr. and Mrs. Brown are filing a joint return and checked box 2 on their return. Their taxable income on line 14 of Form 40NR is $23,360. First, they find the $23,300 - $23,400 income line. Next, they find the column for married filing jointly and read down the column. The amount shown where the income line and the filing status column meet is $1,088. This is the amount they must write on line 20a of Form 40NR. Tax Table (Form 40NR) Based on Taxable Income This tax table is based on the taxable income shown on line 19 of Form 40NR and the filing status you checked on lines 1, 2, 3, or 4 of your return.

If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 16,000 16,000 16,100 763 723 16,100 16,200 768 728 16,200 16,300 773 733 16,300 16,400 778 738 16,400 16,500 783 743 16,500 16,600 788 748 16,600 16,700 793 753 16,700 16,800 798 758 16,800 16,900 803 763 16,900 17,000 808 768 17,000 17,000 17,100 813 773 17,100 17,200 818 778 17,200 17,300 823 783 17,300 17,400 828 788 17,400 17,500 833 793 17,500 17,600 838 798 17,600 17,700 843 803 17,700 17,800 848 808 17,800 17,900 853 813 17,900 18,000 858 818 18,000 18,000 18,100 863 823 18,100 18,200 868 828 18,200 18,300 873 833 18,300 18,400 878 838 18,400 18,500 883 843 18,500 18,600 888 848 18,600 18,700 893 853 18,700 18,800 898 858 18,800 18,900 903 863 18,900 19,000 908 868 19,000 19,000 19,100 913 873 19,100 19,200 918 878 19,200 19,300 923 883 19,300 19,400 928 888 19,400 19,500 933 893 19,500 19,600 938 898 19,600 19,700 943 903 19,700 19,800 948 908 19,800 19,900 953 913 19,900 20,000 958 918 20,000 20,000 20,100 963 923 20,100 20,200 968 928 20,200 20,300 973 933 20,300 20,400 978 938 20,400 20,500 983 943 20,500 20,600 988 948 20,600 20,700 993 953 20,700 20,800 998 958 20,800 20,900 1,003 963 20,900 21,000 1,008 968 If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 21,000 21,000 21,100 1,013 973 21,100 21,200 1,018 978 21,200 21,300 1,023 983 21,300 21,400 1,028 988 21,400 21,500 1,033 993 21,500 21,600 1,038 998 21,600 21,700 1,043 1,003 21,700 21,800 1,048 1,008 21,800 21,900 1,053 1,013 21,900 22,000 1,058 1,018 22,000 22,000 22,100 1,063 1,023 22,100 22,200 1,068 1,028 22,200 22,300 1,073 1,033 22,300 22,400 1,078 1,038 22,400 22,500 1,083 1,043 22,500 22,600 1,088 1,048 22,600 22,700 1,093 1,053 22,700 22,800 1,098 1,058 22,800 22,900 1,103 1,063 22,900 23,000 1,108 1,068 23,000 23,000 23,100 1,113 1,073 23,100 23,200 1,118 1,078 23,200 23,300 1,123 1,083 23,300 23,400 1,128 1,088 23,400 23,500 1,133 1,093 23,500 23,600 1,138 1,098 23,600 23,700 1,143 1,103 23,700 23,800 1,148 1,108 23,800 23,900 1,153 1,113 23,900 24,000 1,158 1,118 24,000 24,000 24,100 1,163 1,123 24,100 24,200 1,168 1,128 24,200 24,300 1,173 1,133 24,300 24,400 1,178 1,138 24,400 24,500 1,183 1,143 24,500 24,600 1,188 1,148 24,600 24,700 1,193 1,153 24,700 24,800 1,198 1,158 24,800 24,900 1,203 1,163 24,900 25,000 1,208 1,168 25,000 25,000 25,100 1,213 1,173 25,100 25,200 1,218 1,178 25,200 25,300 1,223 1,183 25,300 25,400 1,228 1,188 25,400 25,500 1,233 1,193 25,500 25,600 1,238 1,198 25,600 25,700 1,243 1,203 25,700 25,800 1,248 1,208 25,800 25,900 1,253 1,213 25,900 26,000 1,258 1,218 If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 26,000 26,000 26,100 1,263 1,223 26,100 26,200 1,268 1,228 26,200 26,300 1,273 1,233 26,300 26,400 1,278 1,238 26,400 26,500 1,283 1,243 26,500 26,600 1,288 1,248 26,600 26,700 1,293 1,253 26,700 26,800 1,298 1,258 26,800 26,900 1,303 1,263 26,900 27,000 1,308 1,268 27,000 27,000 27,100 1,313 1,273 27,100 27,200 1,318 1,278 27,200 27,300 1,323 1,283 27,300 27,400 1,328 1,288 27,400 27,500 1,333 1,293 27,500 27,600 1,338 1,298 27,600 27,700 1,343 1,303 27,700 27,800 1,348 1,308 27,800 27,900 1,353 1,313 27,900 28,000 1,358 1,318 28,000 28,000 28,100 1,363 1,323 28,100 28,200 1,368 1,328 28,200 28,300 1,373 1,333 28,300 28,400 1,378 1,338 28,400 28,500 1,383 1,343 28,500 28,600 1,388 1,348 28,600 28,700 1,393 1,353 28,700 28,800 1,398 1,358 28,800 28,900 1,403 1,363 28,900 29,000 1,408 1,368 29,000 29,000 29,100 1,413 1,373 29,100 29,200 1,418 1,378 29,200 29,300 1,423 1,383 29,300 29,400 1,428 1,388 29,400 29,500 1,433 1,393 29,500 29,600 1,438 1,398 29,600 29,700 1,443 1,403 29,700 29,800 1,448 1,408 29,800 29,900 1,453 1,413 29,900 30,000 1,458 1,418 30,000 30,000 30,100 1,463 1,423 30,100 30,200 1,468 1,428 30,200 30,300 1,473 1,433 30,300 30,400 1,478 1,438 30,400 30,500 1,483 1,443 30,500 30,600 1,488 1,448 30,600 30,700 1,493 1,453 30,700 30,800 1,498 1,458 30,800 30,900 1,503 1,463 30,900 31,000 1,508 1,468 If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 31,000 31,000 31,100 1,513 1,473 31,100 31,200 1,518 1,478 31,200 31,300 1,523 1,483 31,300 31,400 1,528 1,488 31,400 31,500 1,533 1,493 31,500 31,600 1,538 1,498 31,600 31,700 1,543 1,503 31,700 31,800 1,548 1,508 31,800 31,900 1,553 1,513 31,900 32,000 1,558 1,518 32,000 32,000 32,100 1,563 1,523 32,100 32,200 1,568 1,528 32,200 32,300 1,573 1,533 32,300 32,400 1,578 1,538 32,400 32,500 1,583 1,543 32,500 32,600 1,588 1,548 32,600 32,700 1,593 1,553 32,700 32,800 1,598 1,558 32,800 32,900 1,603 1,563 32,900 33,000 1,608 1,568 33,000 33,000 33,100 1,613 1,573 33,100 33,200 1,618 1,578 33,200 33,300 1,623 1,583 33,300 33,400 1,628 1,588 33,400 33,500 1,633 1,593 33,500 33,600 1,638 1,598 33,600 33,700 1,643 1,603 33,700 33,800 1,648 1,608 33,800 33,900 1,653 1,613 33,900 34,000 1,658 1,618 34,000 34,000 34,100 1,663 1,623 34,100 34,200 1,668 1,628 34,200 34,300 1,673 1,633 34,300 34,400 1,678 1,638 34,400 34,500 1,683 1,643 34,500 34,600 1,688 1,648 34,600 34,700 1,693 1,653 34,700 34,800 1,698 1,658 34,800 34,900 1,703 1,663 34,900 35,000 1,708 1,668 35,000 35,000 35,100 1,713 1,673 35,100 35,200 1,718 1,678 35,200 35,300 1,723 1,683 35,300 35,400 1,728 1,688 35,400 35,500 1,733 1,693 35,500 35,600 1,738 1,698 35,600 35,700 1,743 1,703 35,700 35,800 1,748 1,708 35,800 35,900 1,753 1,713 35,900 36,000 1,758 1,718 Tax Table - Continued

If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 36,000 36,000 36,100 1,763 1,723 36,100 36,200 1,768 1,728 36,200 36,300 1,773 1,733 36,300 36,400 1,778 1,738 36,400 36,500 1,783 1,743 36,500 36,600 1,788 1,748 36,600 36,700 1,793 1,753 36,700 36,800 1,798 1,758 36,800 36,900 1,803 1,763 36,900 37,000 1,808 1,768 37,000 37,000 37,100 1,813 1,773 37,100 37,200 1,818 1,778 37,200 37,300 1,823 1,783 37,300 37,400 1,828 1,788 37,400 37,500 1,833 1,793 37,500 37,600 1,838 1,798 37,600 37,700 1,843 1,803 37,700 37,800 1,848 1,808 37,800 37,900 1,853 1,813 37,900 38,000 1,858 1,818 38,000 38,000 38,100 1,863 1,823 38,100 38,200 1,868 1,828 38,200 38,300 1,873 1,833 38,300 38,400 1,878 1,838 38,400 38,500 1,883 1,843 38,500 38,600 1,888 1,848 38,600 38,700 1,893 1,853 38,700 38,800 1,898 1,858 38,800 38,900 1,903 1,863 38,900 39,000 1,908 1,868 39,000 39,000 39,100 1,913 1,873 39,100 39,200 1,918 1,878 39,200 39,300 1,923 1,883 39,300 39,400 1,928 1,888 39,400 39,500 1,933 1,893 39,500 39,600 1,938 1,898 39,600 39,700 1,943 1,903 39,700 39,800 1,948 1,908 39,800 39,900 1,953 1,913 39,900 40,000 1,958 1,918 40,000 40,000 40,100 1,963 1,923 40,100 40,200 1,968 1,928 40,200 40,300 1,973 1,933 40,300 40,400 1,978 1,938 40,400 40,500 1,983 1,943 40,500 40,600 1,988 1,948 40,600 40,700 1,993 1,953 40,700 40,800 1,998 1,958 40,800 40,900 2,003 1,963 40,900 41,000 2,008 1,968 If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 41,000 41,000 41,100 2,013 1,973 41,100 41,200 2,018 1,978 41,200 41,300 2,023 1,983 41,300 41,400 2,028 1,988 41,400 41,500 2,033 1,993 41,500 41,600 2,038 1,998 41,600 41,700 2,043 2,003 41,700 41,800 2,048 2,008 41,800 41,900 2,053 2,013 41,900 42,000 2,058 2,018 42,000 42,000 42,100 2,063 2,023 42,100 42,200 2,068 2,028 42,200 42,300 2,073 2,033 42,300 42,400 2,078 2,038 42,400 42,500 2,083 2,043 42,500 42,600 2,088 2,048 42,600 42,700 2,093 2,053 42,700 42,800 2,098 2,058 42,800 42,900 2,103 2,063 42,900 43,000 2,108 2,068 43,000 43,000 43,100 2,113 2,073 43,100 43,200 2,118 2,078 43,200 43,300 2,123 2,083 43,300 43,400 2,128 2,088 43,400 43,500 2,133 2,093 43,500 43,600 2,138 2,098 43,600 43,700 2,143 2,103 43,700 43,800 2,148 2,108 43,800 43,900 2,153 2,113 43,900 44,000 2,158 2,118 44,000 44,000 44,100 2,163 2,123 44,100 44,200 2,168 2,128 44,200 44,300 2,173 2,133 44,300 44,400 2,178 2,138 44,400 44,500 2,183 2,143 44,500 44,600 2,188 2,148 44,600 44,700 2,193 2,153 44,700 44,800 2,198 2,158 44,800 44,900 2,203 2,163 44,900 45,000 2,208 2,168 45,000 45,000 45,100 2,213 2,173 45,100 45,200 2,218 2,178 45,200 45,300 2,223 2,183 45,300 45,400 2,228 2,188 45,400 45,500 2,233 2,193 45,500 45,600 2,238 2,198 45,600 45,700 2,243 2,203 45,700 45,800 2,248 2,208 45,800 45,900 2,253 2,213 45,900 46,000 2,258 2,218 If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 46,000 46,000 46,100 2,263 2,223 46,100 46,200 2,268 2,228 46,200 46,300 2,273 2,233 46,300 46,400 2,278 2,238 46,400 46,500 2,283 2,243 46,500 46,600 2,288 2,248 46,600 46,700 2,293 2,253 46,700 46,800 2,298 2,258 46,800 46,900 2,303 2,263 46,900 47,000 2,308 2,268 47,000 47,000 47,100 2,313 2,273 47,100 47,200 2,318 2,278 47,200 47,300 2,323 2,283 47,300 47,400 2,328 2,288 47,400 47,500 2,333 2,293 47,500 47,600 2,338 2,298 47,600 47,700 2,343 2,303 47,700 47,800 2,348 2,308 47,800 47,900 2,353 2,313 47,900 48,000 2,358 2,318 48,000 48,000 48,100 2,363 2,323 48,100 48,200 2,368 2,328 48,200 48,300 2,373 2,333 48,300 48,400 2,378 2,338 48,400 48,500 2,383 2,343 48,500 48,600 2,388 2,348 48,600 48,700 2,393 2,353 48,700 48,800 2,398 2,358 48,800 48,900 2,403 2,363 48,900 49,000 2,408 2,368 49,000 49,000 49,100 2,413 2,373 49,100 49,200 2,418 2,378 49,200 49,300 2,423 2,383 49,300 49,400 2,428 2,388 49,400 49,500 2,433 2,393 49,500 49,600 2,438 2,398 49,600 49,700 2,443 2,403 49,700 49,800 2,448 2,408 49,800 49,900 2,453 2,413 49,900 50,000 2,458 2,418 50,000 50,000 50,100 2,463 2,423 50,100 50,200 2,468 2,428 50,200 50,300 2,473 2,433 50,300 50,400 2,478 2,438 50,400 50,500 2,483 2,443 50,500 50,600 2,488 2,448 50,600 50,700 2,493 2,453 50,700 50,800 2,498 2,458 50,800 50,900 2,503 2,463 50,900 51,000 2,508 2,468 If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 51,000 51,000 51,100 2,513 2,473 51,100 51,200 2,518 2,478 51,200 51,300 2,523 2,483 51,300 51,400 2,528 2,488 51,400 51,500 2,533 2,493 51,500 51,600 2,538 2,498 51,600 51,700 2,543 2,503 51,700 51,800 2,548 2,508 51,800 51,900 2,553 2,513 51,900 52,000 2,558 2,518 52,000 52,000 52,100 2,563 2,523 52,100 52,200 2,568 2,528 52,200 52,300 2,573 2,533 52,300 52,400 2,578 2,538 52,400 52,500 2,583 2,543 52,500 52,600 2,588 2,548 52,600 52,700 2,593 2,553 52,700 52,800 2,598 2,558 52,800 52,900 2,603 2,563 52,900 53,000 2,608 2,568 53,000 53,000 53,100 2,613 2,573 53,100 53,200 2,618 2,578 53,200 53,300 2,623 2,583 53,300 53,400 2,628 2,588 53,400 53,500 2,633 2,593 53,500 53,600 2,638 2,598 53,600 53,700 2,643 2,603 53,700 53,800 2,648 2,608 53,800 53,900 2,653 2,613 53,900 54,000 2,658 2,618 54,000 54,000 54,100 2,663 2,623 54,100 54,200 2,668 2,628 54,200 54,300 2,673 2,633 54,300 54,400 2,678 2,638 54,400 54,500 2,683 2,643 54,500 54,600 2,688 2,648 54,600 54,700 2,693 2,653 54,700 54,800 2,698 2,658 54,800 54,900 2,703 2,663 54,900 55,000 2,708 2,668 55,000 55,000 55,100 2,713 2,673 55,100 55,200 2,718 2,678 55,200 55,300 2,723 2,683 55,300 55,400 2,728 2,688 55,400 55,500 2,733 2,693 55,500 55,600 2,738 2,698 55,600 55,700 2,743 2,703 55,700 55,800 2,748 2,708 55,800 55,900 2,753 2,713 55,900 56,000 2,758 2,718 Tax Table - Continued

If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 56,000 56,000 56,100 2,763 2,723 56,100 56,200 2,768 2,728 56,200 56,300 2,773 2,733 56,300 56,400 2,778 2,738 56,400 56,500 2,783 2,743 56,500 56,600 2,788 2,748 56,600 56,700 2,793 2,753 56,700 56,800 2,798 2,758 56,800 56,900 2,803 2,763 56,900 57,000 2,808 2,768 57,000 57,000 57,100 2,813 2,773 57,100 57,200 2,818 2,778 57,200 57,300 2,823 2,783 57,300 57,400 2,828 2,788 57,400 57,500 2,833 2,793 57,500 57,600 2,838 2,798 57,600 57,700 2,843 2,803 57,700 57,800 2,848 2,808 57,800 57,900 2,853 2,813 57,900 58,000 2,858 2,818 58,000 58,000 58,100 2,863 2,823 58,100 58,200 2,868 2,828 58,200 58,300 2,873 2,833 58,300 58,400 2,878 2,838 58,400 58,500 2,883 2,843 58,500 58,600 2,888 2,848 58,600 58,700 2,893 2,853 58,700 58,800 2,898 2,858 58,800 58,900 2,903 2,863 58,900 59,000 2,908 2,868 59,000 59,000 59,100 2,913 2,873 59,100 59,200 2,918 2,878 59,200 59,300 2,923 2,883 59,300 59,400 2,928 2,888 59,400 59,500 2,933 2,893 59,500 59,600 2,938 2,898 59,600 59,700 2,943 2,903 59,700 59,800 2,948 2,908 59,800 59,900 2,953 2,913 59,900 60,000 2,958 2,918 60,000 60,000 60,100 2,963 2,923 60,100 60,200 2,968 2,928 60,200 60,300 2,973 2,933 60,300 60,400 2,978 2,938 60,400 60,500 2,983 2,943 60,500 60,600 2,988 2,948 60,600 60,700 2,993 2,953 60,700 60,800 2,998 2,958 60,800 60,900 3,003 2,963 60,900 61,000 3,008 2,968 If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 61,000 61,000 61,100 3,013 2,973 61,100 61,200 3,018 2,978 61,200 61,300 3,023 2,983 61,300 61,400 3,028 2,988 61,400 61,500 3,033 2,993 61,500 61,600 3,038 2,998 61,600 61,700 3,043 3,003 61,700 61,800 3,048 3,008 61,800 61,900 3,053 3,013 61,900 62,000 3,058 3,018 62,000 62,000 62,100 3,063 3,023 62,100 62,200 3,068 3,028 62,200 62,300 3,073 3,033 62,300 62,400 3,078 3,038 62,400 62,500 3,083 3,043 62,500 62,600 3,088 3,048 62,600 62,700 3,093 3,053 62,700 62,800 3,098 3,058 62,800 62,900 3,103 3,063 62,900 63,000 3,108 3,068 63,000 63,000 63,100 3,113 3,073 63,100 63,200 3,118 3,078 63,200 63,300 3,123 3,083 63,300 63,400 3,128 3,088 63,400 63,500 3,133 3,093 63,500 63,600 3,138 3,098 63,600 63,700 3,143 3,103 63,700 63,800 3,148 3,108 63,800 63,900 3,153 3,113 63,900 64,000 3,158 3,118 64,000 64,000 64,100 3,163 3,123 64,100 64,200 3,168 3,128 64,200 64,300 3,173 3,133 64,300 64,400 3,178 3,138 64,400 64,500 3,183 3,143 64,500 64,600 3,188 3,148 64,600 64,700 3,193 3,153 64,700 64,800 3,198 3,158 64,800 64,900 3,203 3,163 64,900 65,000 3,208 3,168 65,000 65,000 65,100 3,213 3,173 65,100 65,200 3,218 3,178 65,200 65,300 3,223 3,183 65,300 65,400 3,228 3,188 65,400 65,500 3,233 3,193 65,500 65,600 3,238 3,198 65,600 65,700 3,243 3,203 65,700 65,800 3,248 3,208 65,800 65,900 3,253 3,213 65,900 66,000 3,258 3,218 If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 66,000 66,000 66,100 3,263 3,223 66,100 66,200 3,268 3,228 66,200 66,300 3,273 3,233 66,300 66,400 3,278 3,238 66,400 66,500 3,283 3,243 66,500 66,600 3,288 3,248 66,600 66,700 3,293 3,253 66,700 66,800 3,298 3,258 66,800 66,900 3,303 3,263 66,900 67,000 3,308 3,268 67,000 67,000 67,100 3,313 3,273 67,100 67,200 3,318 3,278 67,200 67,300 3,323 3,283 67,300 67,400 3,328 3,288 67,400 67,500 3,333 3,293 67,500 67,600 3,338 3,298 67,600 67,700 3,343 3,303 67,700 67,800 3,348 3,308 67,800 67,900 3,353 3,313 67,900 68,000 3,358 3,318 68,000 68,000 68,100 3,363 3,323 68,100 68,200 3,368 3,328 68,200 68,300 3,373 3,333 68,300 68,400 3,378 3,338 68,400 68,500 3,383 3,343 68,500 68,600 3,388 3,348 68,600 68,700 3,393 3,353 68,700 68,800 3,398 3,358 68,800 68,900 3,403 3,363 68,900 69,000 3,408 3,368 69,000 69,000 69,100 3,413 3,373 69,100 69,200 3,418 3,378 69,200 69,300 3,423 3,383 69,300 69,400 3,428 3,388 69,400 69,500 3,433 3,393 69,500 69,600 3,438 3,398 69,600 69,700 3,443 3,403 69,700 69,800 3,448 3,408 69,800 69,900 3,453 3,413 69,900 70,000 3,458 3,418 70,000 70,000 70,100 3,463 3,423 70,100 70,200 3,468 3,428 70,200 70,300 3,473 3,433 70,300 70,400 3,478 3,438 70,400 70,500 3,483 3,443 70,500 70,600 3,488 3,448 70,600 70,700 3,493 3,453 70,700 70,800 3,498 3,458 70,800 70,900 3,503 3,463 70,900 71,000 3,508 3,468 If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 71,000 71,000 71,100 3,513 3,473 71,100 71,200 3,518 3,478 71,200 71,300 3,523 3,483 71,300 71,400 3,528 3,488 71,400 71,500 3,533 3,493 71,500 71,600 3,538 3,498 71,600 71,700 3,543 3,503 71,700 71,800 3,548 3,508 71,800 71,900 3,553 3,513 71,900 72,000 3,558 3,518 72,000 72,000 72,100 3,563 3,523 72,100 72,200 3,568 3,528 72,200 72,300 3,573 3,533 72,300 72,400 3,578 3,538 72,400 72,500 3,583 3,543 72,500 72,600 3,588 3,548 72,600 72,700 3,593 3,553 72,700 72,800 3,598 3,558 72,800 72,900 3,603 3,563 72,900 73,000 3,608 3,568 73,000 73,000 73,100 3,613 3,573 73,100 73,200 3,618 3,578 73,200 73,300 3,623 3,583 73,300 73,400 3,628 3,588 73,400 73,500 3,633 3,593 73,500 73,600 3,638 3,598 73,600 73,700 3,643 3,603 73,700 73,800 3,648 3,608 73,800 73,900 3,653 3,613 73,900 74,000 3,658 3,618 74,000 74,000 74,100 3,663 3,623 74,100 74,200 3,668 3,628 74,200 74,300 3,673 3,633 74,300 74,400 3,678 3,638 74,400 74,500 3,683 3,643 74,500 74,600 3,688 3,648 74,600 74,700 3,693 3,653 74,700 74,800 3,698 3,658 74,800 74,900 3,703 3,663 74,900 75,000 3,708 3,668 75,000 75,000 75,100 3,713 3,673 75,100 75,200 3,718 3,678 75,200 75,300 3,723 3,683 75,300 75,400 3,728 3,688 75,400 75,500 3,733 3,693 75,500 75,600 3,738 3,698 75,600 75,700 3,743 3,703 75,700 75,800 3,748 3,708 75,800 75,900 3,753 3,713 75,900 76,000 3,758 3,718 Tax Table - Continued

If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 76,000 76,000 76,100 3,763 3,723 76,100 76,200 3,768 3,728 76,200 76,300 3,773 3,733 76,300 76,400 3,778 3,738 76,400 76,500 3,783 3,743 76,500 76,600 3,788 3,748 76,600 76,700 3,793 3,753 76,700 76,800 3,798 3,758 76,800 76,900 3,803 3,763 76,900 77,000 3,808 3,768 77,000 77,000 77,100 3,813 3,773 77,100 77,200 3,818 3,778 77,200 77,300 3,823 3,783 77,300 77,400 3,828 3,788 77,400 77,500 3,833 3,793 77,500 77,600 3,838 3,798 77,600 77,700 3,843 3,803 77,700 77,800 3,848 3,808 77,800 77,900 3,853 3,813 77,900 78,000 3,858 3,818 78,000 78,000 78,100 3,863 3,823 78,100 78,200 3,868 3,828 78,200 78,300 3,873 3,833 78,300 78,400 3,878 3,838 78,400 78,500 3,883 3,843 78,500 78,600 3,888 3,848 78,600 78,700 3,893 3,853 78,700 78,800 3,898 3,858 78,800 78,900 3,903 3,863 78,900 79,000 3,908 3,868 79,000 79,000 79,100 3,913 3,873 79,100 79,200 3,918 3,878 79,200 79,300 3,923 3,883 79,300 79,400 3,928 3,888 79,400 79,500 3,933 3,893 79,500 79,600 3,938 3,898 79,600 79,700 3,943 3,903 79,700 79,800 3,948 3,908 79,800 79,900 3,953 3,913 79,900 80,000 3,958 3,918 80,000 80,000 80,100 3,963 3,923 80,100 80,200 3,968 3,928 80,200 80,300 3,973 3,933 80,300 80,400 3,978 3,938 80,400 80,500 3,983 3,943 80,500 80,600 3,988 3,948 80,600 80,700 3,993 3,953 80,700 80,800 3,998 3,958 80,800 80,900 4,003 3,963 80,900 81,000 4,008 3,968 If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 81,000 81,000 81,100 4,013 3,973 81,100 81,200 4,018 3,978 81,200 81,300 4,023 3,983 81,300 81,400 4,028 3,988 81,400 81,500 4,033 3,993 81,500 81,600 4,038 3,998 81,600 81,700 4,043 4,003 81,700 81,800 4,048 4,008 81,800 81,900 4,053 4,013 81,900 82,000 4,058 4,018 82,000 82,000 82,100 4,063 4,023 82,100 82,200 4,068 4,028 82,200 82,300 4,073 4,033 82,300 82,400 4,078 4,038 82,400 82,500 4,083 4,043 82,500 82,600 4,088 4,048 82,600 82,700 4,093 4,053 82,700 82,800 4,098 4,058 82,800 82,900 4,103 4,063 82,900 83,000 4,108 4,068 83,000 83,000 83,100 4,113 4,073 83,100 83,200 4,118 4,078 83,200 83,300 4,123 4,083 83,300 83,400 4,128 4,088 83,400 83,500 4,133 4,093 83,500 83,600 4,138 4,098 83,600 83,700 4,143 4,103 83,700 83,800 4,148 4,108 83,800 83,900 4,153 4,113 83,900 84,000 4,158 4,118 84,000 84,000 84,100 4,163 4,123 84,100 84,200 4,168 4,128 84,200 84,300 4,173 4,133 84,300 84,400 4,178 4,138 84,400 84,500 4,183 4,143 84,500 84,600 4,188 4,148 84,600 84,700 4,193 4,153 84,700 84,800 4,198 4,158 84,800 84,900 4,203 4,163 84,900 85,000 4,208 4,168 85,000 85,000 85,100 4,213 4,173 85,100 85,200 4,218 4,178 85,200 85,300 4,223 4,183 85,300 85,400 4,228 4,188 85,400 85,500 4,233 4,193 85,500 85,600 4,238 4,198 85,600 85,700 4,243 4,203 85,700 85,800 4,248 4,208 85,800 85,900 4,253 4,213 85,900 86,000 4,258 4,218 If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 86,000 86,000 86,100 4,263 4,223 86,100 86,200 4,268 4,228 86,200 86,300 4,273 4,233 86,300 86,400 4,278 4,238 86,400 86,500 4,283 4,243 86,500 86,600 4,288 4,248 86,600 86,700 4,293 4,253 86,700 86,800 4,298 4,258 86,800 86,900 4,303 4,263 86,900 87,000 4,308 4,268 87,000 87,000 87,100 4,313 4,273 87,100 87,200 4,318 4,278 87,200 87,300 4,323 4,283 87,300 87,400 4,328 4,288 87,400 87,500 4,333 4,293 87,500 87,600 4,338 4,298 87,600 87,700 4,343 4,303 87,700 87,800 4,348 4,308 87,800 87,900 4,353 4,313 87,900 88,000 4,358 4,318 88,000 88,000 88,100 4,363 4,323 88,100 88,200 4,368 4,328 88,200 88,300 4,373 4,333 88,300 88,400 4,378 4,338 88,400 88,500 4,383 4,343 88,500 88,600 4,388 4,348 88,600 88,700 4,393 4,353 88,700 88,800 4,398 4,358 88,800 88,900 4,403 4,363 88,900 89,000 4,408 4,368 89,000 89,000 89,100 4,413 4,373 89,100 89,200 4,418 4,378 89,200 89,300 4,423 4,383 89,300 89,400 4,428 4,388 89,400 89,500 4,433 4,393 89,500 89,600 4,438 4,398 89,600 89,700 4,443 4,403 89,700 89,800 4,448 4,408 89,800 89,900 4,453 4,413 89,900 90,000 4,458 4,418 90,000 90,000 90,100 4,463 4,423 90,100 90,200 4,468 4,428 90,200 90,300 4,473 4,433 90,300 90,400 4,478 4,438 90,400 90,500 4,483 4,443 90,500 90,600 4,488 4,448 90,600 90,700 4,493 4,453 90,700 90,800 4,498 4,458 90,800 90,900 4,503 4,463 90,900 91,000 4,508 4,468 If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 91,000 91,000 91,100 4,513 4,473 91,100 91,200 4,518 4,478 91,200 91,300 4,523 4,483 91,300 91,400 4,528 4,488 91,400 91,500 4,533 4,493 91,500 91,600 4,538 4,498 91,600 91,700 4,543 4,503 91,700 91,800 4,548 4,508 91,800 91,900 4,553 4,513 91,900 92,000 4,558 4,518 92,000 92,000 92,100 4,563 4,523 92,100 92,200 4,568 4,528 92,200 92,300 4,573 4,533 92,300 92,400 4,578 4,538 92,400 92,500 4,583 4,543 92,500 92,600 4,588 4,548 92,600 92,700 4,593 4,553 92,700 92,800 4,598 4,558 92,800 92,900 4,603 4,563 92,900 93,000 4,608 4,568 93,000 93,000 93,100 4,613 4,573 93,100 93,200 4,618 4,578 93,200 93,300 4,623 4,583 93,300 93,400 4,628 4,588 93,400 93,500 4,633 4,593 93,500 93,600 4,638 4,598 93,600 93,700 4,643 4,603 93,700 93,800 4,648 4,608 93,800 93,900 4,653 4,613 93,900 94,000 4,658 4,618 94,000 94,000 94,100 4,663 4,623 94,100 94,200 4,668 4,628 94,200 94,300 4,673 4,633 94,300 94,400 4,678 4,638 94,400 94,500 4,683 4,643 94,500 94,600 4,688 4,648 94,600 94,700 4,693 4,653 94,700 94,800 4,698 4,658 94,800 94,900 4,703 4,663 94,900 95,000 4,708 4,668 95,000 95,000 95,100 4,713 4,673 95,100 95,200 4,718 4,678 95,200 95,300 4,723 4,683 95,300 95,400 4,728 4,688 95,400 95,500 4,733 4,693 95,500 95,600 4,738 4,698 95,600 95,700 4,743 4,703 95,700 95,800 4,748 4,708 95,800 95,900 4,753 4,713 95,900 96,000 4,758 4,718 Tax Table - Continued

If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 96,000 96,000 96,100 4,763 4,723 96,100 96,200 4,768 4,728 96,200 96,300 4,773 4,733 96,300 96,400 4,778 4,738 96,400 96,500 4,783 4,743 96,500 96,600 4,788 4,748 96,600 96,700 4,793 4,753 96,700 96,800 4,798 4,758 96,800 96,900 4,803 4,763 96,900 97,000 4,808 4,768 If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 97,000 97,000 97,100 4,813 4,773 97,100 97,200 4,818 4,778 97,200 97,300 4,823 4,783 97,300 97,400 4,828 4,788 97,400 97,500 4,833 4,793 97,500 97,600 4,838 4,798 97,600 97,700 4,843 4,803 97,700 97,800 4,848 4,808 97,800 97,900 4,853 4,813 97,900 98,000 4,858 4,818 If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 98,000 98,000 98,100 4,863 4,823 98,100 98,200 4,868 4,828 98,200 98,300 4,873 4,833 98,300 98,400 4,878 4,838 98,400 98,500 4,883 4,843 98,500 98,600 4,888 4,848 98,600 98,700 4,893 4,853 98,700 98,800 4,898 4,858 98,800 98,900 4,903 4,863 98,900 99,000 4,908 4,868 If taxable And you are - income is - At But Single Married least less ✱ filing than Married jointly filing separately ✱ Head of family Your tax is - 99,000 99,000 99,100 4,913 4,873 99,100 99,200 4,918 4,878 99,200 99,300 4,923 4,883 99,300 99,400 4,928 4,888 99,400 99,500 4,933 4,893 99,500 99,600 4,938 4,898 99,600 99,700 4,943 4,903 99,700 99,800 4,948 4,908 99,800 99,900 4,953 4,913 99,900 100,000 4,958 4,918 Tax Table - Continued Over $100,000.00 If taxable income is over $100,000, use the following worksheet to figure your tax. • Single • Married filing separately • Head of family 1 Enter taxable income . . 2 L e s s ...............- 100,000.00 3 Subtract line 2 from l i n e 1 ............... 4 Multiply line 3 by .05 . . x .05 5 E n t e r r e s u l t h e r e...... 6 P l u s...............+ 4 , 958.00 7 Add lines 5 and 6. Your tax is ........ • Married filing jointly 1 Enter taxable income . . 2 L e s s ...............- 100,000.00 3 Subtract line 2 from l i n e 1 ............... 4 Multiply line 3 by .05 . . x .05 5 E n t e r r e s u l t h e r e...... 6 P l u s.................+ 4 , 918.00 7 Add lines 5 and 6. Your tax is ........ ▼ ▼

# NOTES NOTES

Pay Your Taxes by Credit Card via Internet or Phone Pay Your Taxes via Internet or Phone Pay online at www.officialpayments.com or call 1-800-2PAY-TAX SM (1-800-272-9829) Payment by electronic check is available online at www.officialpayments.com/echeck After authorization of your payment, you will be given a confirmation number that you should keep for your records. There will be a nominal fee charged for this service. Use your American Express, Discover, MasterCard, Visa, or Electronic Check to pay your personal income taxes. www.officialpayments.com PAYMENT SERVICES PROVIDED BY:

# NOTES BOOKLETS

Form 40 Booklet. This booklet contains the following forms and schedules with instructions: Form 40, Schedules A, B, CR, DC, D, & E and Form 40V. Form 40A Booklet.This booklet contains Form 40A with instructions and Form 40V. Form 40NR Booklet.This booklet contains the following forms and schedules with instructions: Form 40NR, Schedules A, B, D, & E and Form 40V. Note: See Which Form To Fileon pages 5 and 6 of this booklet for requirements you must meet to file Form 40, Form 40A, and Form 40NR. FORMS Form 40 Individual Income Tax Returnfor full year residents of Alabama and also part-year residents of Alabama. Form 40A Individual Income Tax Return (Short Form) for full year residents of Alabama.

# Form 40NR Nonresident Individual Income Tax Returnfor nonresidents of

Alabama. Form 40X Amended Return or Application for Refundof Alabama income tax paid through mistake or error. Form 40ESto make estimated tax payments. Form 4868AApplication for requesting an extension of time to file Alabama Individual Income Tax Return.

# SCHEDULES

Schedule Afor itemized deductions. Schedule Bfor interest and dividend income. Schedule CRfor computation of credit for taxes paid to other states. Schedule DC for computation of total donations. Schedule Dfor reporting income from the sale or exchange of capital assets. Schedule E for reporting income from rents, royalties, partnerships, estates, and trusts. Schedule OC for computation of basic skills credit, rural physicians credit, and/or a capital credit. How To Obtain Forms Generally, we mail forms and schedules directly to you based on what seems right for you. The fastest method to obtain instructions, schedules and forms is to visit our Web site at: www.revenue.alabama.gov. Additional booklets, forms, and schedules are listed below. These booklets and forms may be obtained by visiting the Alabama Taxpayer Service Center nearest you or by mailing the order blank below.

# CAUTION

The Order Blank below should not be used to request bulk forms. Accountants, banks, post offices, military bases, libraries, and businesses needing forms may use our Web site which lists all Alabama forms and instructions available for individuals, partnerships, fiduciaries, employers, etc. The booklets, forms, and instructions listed here are available at no cost. One booklet, or two forms and instructions for each item you check will be mailed to you. To help reduce waste, please order only the forms and instructions you need to prepare your return. Attach a separate sheet of paper listing additional forms you may need not listed on the order blank. Please allow 3 weeks to receive your order. Use this Order Blank to order only current forms. This form must be properly completed or your request for forms will not be processed. Please detach the order blank and be sure to write your name and address below. Enclose this order blank in your own envelope and mail to the address shown. Check ✔ Desired Forms And Instructions For 2006 /c6050Form 40 Booklet (includes Form 40, Schedules A, B, CR, DC, D, E, and instructions and Form 40V.) /c6050Form 40A Booklet (Form 40A and instructions and Form 40V.) /c6050Form 40NR Booklet (includes Form 40NR, Schedules A, B, D, E, and instructions and Form 40V.) /c6050NOL Booklet (includes Forms NOL-85, NOL-85A, 40X, and instructions.) /c6050Form 40X /c6050Form 2210AL Instr. /c6050Form 40ES for 2007 /c6050Form 4868A /c6050Form 2210AL /c6050Form 4952A Mail to: ALABAMA DEPARTMENT OF REVENUE

INCOME TAX FORMS P.O. BOX 327470 MONTGOMERY, AL 36132-7470 Order Blank

# FORMS ONLINE

Alabama does not provide the following forms and schedules and requests that the appropriate federal schedule be used making the modifications as required by Alabama law. Schedule C for reporting income from a personally owned business. Schedule Ffor reporting income from farming. Form 2106for claiming employee business expenses. Form 3903for claiming moving expenses. Form 4684for reporting casualty and theft losses. Form 4797 for reporting sale of business property. Form 6252 for reporting installment sale income. Form 8283for reporting noncash contributions.

# DETACH AT THIS LINE

Name Number and Street or Rural Route City, Town or Post Office, and State Zip Code Type or print your name and address on this label. It will be used to expedite your order. ▼