reglab/statecodes huggingface dataset:
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-14 - GROSS INCOME OF INDIVIDUALS › Section 810-3-14-.06 - Payments By Employers For Past Services To Those No Longer In Their Employment; Payments To Widows Of Deceased Employees

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Bonus or other post-employment payments
			 made by an employer to his employee in the military service are considered to
			 be compensation for services and includable in gross income, where the plan and
			 agreement are that the employee is to return to his position when discharged
			 from military service. If the payments are made as a gift, then the payments
			 are not includable in gross income of the recipient. The deduction by the payer
			 of the payments as a business expense is prima facie evidence that the payments
			 are not gifts.
(2) Payments made by
			 an employer to the widow of a deceased officer or employee as additional
			 compensation, in recognition of and in consideration of services of said
			 deceased officer or employee, are includable in the gross income of the
			 widow.
(3)
(a) Payments received by the widow of a
			 deceased partner from a partnership are includable in gross income to the
			 extent the payments represent a distribution of profits.
(b) If the payments represent a purchase or
			 cancellation of the deceased partner's interest in the partnership, gain or
			 loss will be recognized as provided in §
									40-18-8,
Code of Ala. 1975
.
(c) Any payments which constitute a gift from
			 the partnership to the widow are not includable in gross income.
Authors:
Ann F. Winborne, CPA, John Danziger,
				Rebecca S. Whisenant
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-14 - GROSS INCOME OF INDIVIDUALS › Section 810-3-14-.07 - Nonrecognition Of Gain On Sale Of Personal Residence

Current through Register Vol. 42, No. 9, June 28, 2024
(Repealed).
Authors:
Royce Lader, Ann F.
				Winborne
Statutory Authority:
Code of Ala.
				  1975
, §
										40-18-14.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-14 - GROSS INCOME OF INDIVIDUALS › Section 810-3-14-.08 - Sale Of Principal Residence By Taxpayer Who Has Attained Age 55

Current through Register Vol. 42, No. 9, June 28, 2024
(Repealed).
Authors:
Royce Lader, Ann F.
				Winborne
Statutory Authority:
Act 90-583.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-14 - GROSS INCOME OF INDIVIDUALS › Section 810-3-14-.09 - Rental Value Of Home Or Rental Allowance Furnished A Minister Of The Gospel

Current through Register Vol. 42, No. 9, June 28, 2024
(Repealed).
Authors:
Rebecca S. Whisenant, Amanda G. Scott,
				CPA
Statutory Authority:
Code of Ala.
				  1975
, §
										40-18-14.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-14 - GROSS INCOME OF INDIVIDUALS › Section 810-3-14-.10 - Estate And Trust Beneficiary Taxable Income

Current through Register Vol. 42, No. 9, June 28, 2024
(Repealed).
Authors:
Roy Wiggins, Amanda G. Scott, CPA, Ann F.
				Winborne, CPA
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-14.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-14 - GROSS INCOME OF INDIVIDUALS › Section 810-3-14-.11 - Severance Pay Exemption (Repealed)

Current through Register Vol. 42, No. 9, June 28, 2024
Authors:
Edward F. Cutter, CPA; Richard H.
				  Henninger, Jr.; Judy A. Robbins, Ann F. Winborne, CPA
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-19.1.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.01 - General Provisions

Current through Register Vol. 42, No. 9, June 28, 2024
(1) For
			 tax years beginning after December 31, 1997, no deduction shall be allowed for
			 any losses, expenses, or interest deferred or disallowed pursuant to  26 U.S.C. §
									267. For interpretation of federal statutes adopted by the Alabama
			 Legislature, see Rule 810-3-1.1 -.01, Operating Rules.
(2) For tax years beginning after December
			 31, 1986, no expenses shall be allowed for any cost required to be capitalized
			 in accordance with  26 U.S.C. §
									263A.
(3) An individual who is a part-year resident
			 of Alabama may deduct expenses allowed by §
								40-18-15,
Code of Ala. 1975
, only to the extent that the
			 expenses were paid during the period the taxpayer was a resident of Alabama. If
			 a deduction was paid for the entire year, such as interest or taxes, and the
			 amount actually paid while a resident cannot be determined, the taxpayer may
			 prorate the deductible amount based on the number of months of Alabama
			 residency.
(4) Double deductions
			 are not permitted. Amounts deducted under one provision of this title cannot be
			 deducted under another title.
Authors:
Ann F. Winborne, CPA, Roger Frost, Sharon
				Norman, Hugh Kirland, James Lucy, Lee Johnson, Betty Knowles
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-15.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.02 - Business Expenses

Current through Register Vol. 42, No. 9, June 28, 2024
(1)
			 Business expenses deductible from gross income include the ordinary and
			 necessary expenses paid or accrued during the taxable year, directly connected
			 with or pertaining to the taxpayer's trade or business, as determined in
			 accordance with  26 U.S.C. §
									162.
(2) The provisions and limitations of  26 U.S.C. §
									274  also apply to expenses for business travel, meals, and
			 entertainment otherwise allowable under  26 U.S.C. §
									162.
(3) Unreimbursed employee business expenses
			 and certain other miscellaneous itemized deductions are deductible only to the
			 extent that the aggregate of the deductions exceeds 2-percent of adjusted gross
			 income as defined in
Code of Ala. 1975
, §
								40-18-14.2.
(4) A farmer who operates a farm for profit
			 is entitled to deduct from gross income as necessary expenses all amounts
			 actually expended in the carrying on of the business of farming in accordance
			 with  26 U.S.C. §
									162.
(5)
			 Alabama income tax law requires that taxpayers maintain such records as will be
			 sufficient to enable the Department of Revenue to correctly determine tax
			 liability. It is to the advantage of taxpayers who may be called upon to
			 substantiate deductions to maintain as adequate and detailed records as is
			 practical since the burden of proof is on the taxpayer to show that such
			 deductions were not only paid or accrued but also were ordinary and necessary
			 business expenses, as defined in  26 U.S.C. §
									162.
(6) For interpretation of federal statutes
			 adopted by the Alabama Legislature, see Rule 810-3-1.1 -.01, Operating
			 Rules.
(7) The provisions of the
			 federal "Taxpayer Relief Act of 1997" which were adopted by Alabama Act 98-502
			 have the same effective date for Alabama income tax purposes as they do for
			 federal income tax purposes.
Authors:
Roger Frost, Sharon Norman, Hugh
				Kirkland, James Lucy, Lee Johnson, Betty Knowles, Ann F. Winborne,
				CPA
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-15.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.03 - Interest Expense

Current through Register Vol. 42, No. 9, June 28, 2024
(1)
			 Effective for all taxable years beginning after December 31, 1997, interest
			 paid or accrued within the taxable year on indebtedness shall be limited to the
			 amount allowable as an interest deduction for federal income tax purposes in
			 the corresponding tax year or period pursuant to the provisions of  26 U.S.C. §§
									163, 264, and 265. Educational loan interest is not deductible for
			 Alabama income tax purposes. For interpretation of federal statutes adopted by
			 the Alabama Legislature, see Rule 810-3-1.1 -.01, Operating Rules.
(2) Effective for all taxable years or
			 periods beginning after December 31, 1987, and prior to December 31, 1997,
			 interest paid or accrued within the taxable year on indebtedness shall be
			 limited to the amount allowable as an interest deduction for federal income tax
			 purposes in the corresponding tax year or period pursuant to the provisions of
			  26 U.S.C. §
									163.
(3) For
			 taxable years beginning prior to January 1, 1988, all interest paid or accrued
			 within the taxable year on indebtedness was fully deductible.
(4) The provisions of the federal "Taxpayer
			 Relief Act of 1997" which were adopted by Alabama Act 98-502 have the same
			 effective date for Alabama income tax purposes they do for federal income tax
			 purposes.
Authors:
Roger Frost, Sharon Norman, Hugh
				Kirkland, James Lucy, Lee Johnson, Betty Knowles
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-15.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.04 - Deductibility Of Taxes

Current through Register Vol. 42, No. 9, June 28, 2024
(1) The
			 following taxes imposed by the United States or any possession of the United
			 States are deductible by the taxable entity upon whom the taxes are imposed:
(a) Income taxes
(b) Federal Insurance Contribution Act (FICA)
			 taxes
(c) Self-employment
			 taxes
(d) Estate and gift taxes
1. Estate taxes are imposed on the
			 estate.
2. Gift taxes are imposed
			 on the donor.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.05 - Depreciation, Amortization And Section 179 Expense

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Effective for all taxable years beginning
			 after December 31, 1997, there shall be allowed as a depreciation deduction a
			 reasonable allowance for the exhaustion, wear and tear (including a reasonable
			 allowance for obsolescence) of property used in a trade or business, or of
			 property held for the production of income, in accordance with  26 U.S.C. §§
									167 and  168. For interpretation of federal statutes adopted by the
			 Alabama Legislature, see Rule 810-3-1.1 -.01, Operating Rules.
(2) Effective for all taxable years beginning
			 after December 31, 1997, intangible assets which are used in a trade or
			 business or held for the production of income may be amortized in accordance
			 with  26 U.S.C. §
									197. For interpretation of federal statutes adopted by the
			 Alabama Legislature, see Rule 810-3-1.1 -.01, Operating Rules.
(3) A deduction is allowable for the
			 amortization of start-up expenditures in accordance with  26 U.S.C. §
									195,
			 but in the case of a nonresident, only if the principal place of business being
			 investigated, created, or acquired is located in the State of
			 Alabama.
(4) For taxable years
			 beginning after December 31, 1989, a taxpayer may elect to treat the cost of
			 any section 179 property as an expense which is not chargeable to a capital
			 account in accordance with  26 U.S.C. §
									179.
(5) For taxable years beginning before
			 January 1, 1998, Alabama income tax law and regulations were similar to the
			 provisions of the Internal Revenue Code and regulations concerning depreciation
			 and amortization of intangible assets. Applicable federal regulations and
			 determinations pertaining to depreciation and amortization of intangible assets
			 will be followed in administering this rule for those tax periods. See also
			 Rule 810-3-1.1 -.01, Operating Rules.
(6) The provisions of the federal "Taxpayer
			 Relief Act of 1997" which were adopted by Alabama Act 98-502 have the same
			 effective date for Alabama income tax purposes as they do for federal income
			 tax purposes.
Authors:
Roger Frost, Sharon Norman, Hugh
				Kirkland, James Lucy, Lee Johnson, Betty Knowles, Ewell Berry, Ann F. Winborne,
				CPA
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-15.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.06 - Depletion

Current through Register Vol. 42, No. 9, June 28, 2024
(1) There shall be
			 allowed as a deduction in computing taxable income in the case of mines, oil
			 and gas wells, other natural deposits, and timber, a reasonable allowance for
			 depletion.
(a) Depletion allowance for
			 standing timber shall be computed solely on the adjusted basis of the
			 property.
(b) Depletion allowance
			 for oil and gas may be computed on either the cost depletion method or on a
			 percentage of gross income from the property, see Reg.
			 810-3-16-.01.
(c) Depletion allowance for other exhaustible
			 natural resources shall be computed on the cost depletion method.
(d) The basis for depletion shall be
			 determined in accordance with §§
									40-18-16 and
			 40-18-6,
Code of Ala. 1975
.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.07 - Losses

Current through Register Vol. 42, No. 9, June 28, 2024
(1) The following
			 losses sustained during the taxable year and not compensated for by insurance
			 or otherwise are deductible by individuals:
(a) Losses incurred in a trade or business,
			 in accordance with  26 U.S.C. §
										165(c)(1).
(b) Losses incurred in any transaction
			 entered into for profit, though not connected with a trade or business, in
			 accordance with  26 U.S.C. §
										165(c)(2), but in the case of a non-resident,
			 only as to those transactions within the state.
(c) Casualty and theft losses sustained
			 during the taxable year of property not connected with the conduct of a trade
			 or business or a transaction entered into for profit as determined in
			 accordance with  26 U.S.C. §
										165(c)(3) and (h). In the case of a
			 nonresident, the deduction shall be allowed only for the losses arising from
			 property located within the State of Alabama and the limitations in  26 U.S.C. §
										165  shall be applied only with regard to the taxpayer's Alabama adjusted
			 gross income.
(d) Losses from debts
			 ascertained to be worthless and charged off during the taxable year of
			 ascertainment, if sustained in the conduct of the regular trade or business of
			 the taxpayer. The reserve method for bad debts is not allowed for
			 individuals.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.08 - Expenses And Losses Of Farmers

Current through Register Vol. 42, No. 9, June 28, 2024
(Repealed 1/18/00).
Authors:
Ann F. Winborne, CPA, Roy
				Wiggins
Statutory Authority:
Code of Ala.
				  1975
, §
										40-18-15.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.09 - Nontrade Or Nonbusiness Expenses

Current through Register Vol. 42, No. 9, June 28, 2024
(1) In accordance with  26 U.S.C. §
									212,
			 an individual is allowed a deduction for all the ordinary and necessary
			 expenses paid or incurred during the taxable year:
(a) for the production or collection of
			 income;
(b) for the management,
			 conservation, or maintenance of property held for the production of income;
			 or
(c) in connection with the
			 determination, collection, or refund of any tax.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.10 - Employee Business Expenses

Current through Register Vol. 42, No. 9, June 28, 2024
(Repealed 1/18/00)
Authors:
Ann F. Winborne, Jerilyn P.
				Christian
Statutory Authority:
Code of Ala.
				  1975
, §
										40-18-15.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.11 - Proration Of Personal And Business Expenses

Current through Register Vol. 42, No. 9, June 28, 2024
(Repealed 1/18/00)
Author:
Ann Winborne, CPA
Statutory Authority:
Code of Ala.
				  1975
, §
										40-18-153.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.12 - Moving Expenses

Current through Register Vol. 42, No. 9, June 28, 2024
(1)
			 Effective for taxable years beginning January 1, 1990, a deduction is allowed
			 for moving expenses paid or incurred during the taxable year in connection with
			 the commencement of work by the taxpayer as an employee or as a self-employed
			 individual at a new principal place of work in accordance with  26 U.S.C. §
									217; provided, however, that the "new principal place of work" is located
			 within the State of Alabama. For interpretation of federal statutes adopted by
			 the Alabama Legislature, see Rule 810-3-1.1 -.01, Operating Rules.
Authors:
Roger Frost, Sharon Norman, Hugh
				Kirkland, James Lucy, Lee Johnson, Betty Knowles
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-15.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.13 - Alimony And Separate Maintenance Payments

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Effective for taxable years beginning
			 January 1, 1990, alimony and separate maintenance payments will be deductible
			 in accordance with  26 U.S.C. §
									215. For interpretation of federal statutes
			 adopted by the Alabama Legislature, see Rule 810-3-1.1 -.01, Operating
			 Rules.
(2) For taxable years ending
			 after December 31, 1984, and before January 1, 1990, alimony and separate
			 maintenance payments will be deductible as provided in  26 U.S.C. §
									215  as
			 in effect on January 1, 1985.
Author:
Roger Frost, Sharon Norman, Hugh Kirkland,
				James Lucy, Lee Johnson, Betty Knowles
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-15.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.14 - Deductions Allowable For Retirement Savings-IRA, SEP And Keogh Plans

Current through Register Vol. 42, No. 9, June 28, 2024
(1) A deduction is
			 allowed for an individual's qualified retirement contribution in accordance
			 with  26 U.S.C. §
									219.
(2) A
			 deduction is allowed for contributions of an employer to an employees' trust or
			 annuity plan, or for compensation paid or accrued on account of an employee
			 under a deferred-payment plan, in accordance with  26 U.S.C. §
									404.
(3) For interpretation
			 of federal statutes adopted by the Alabama Legislature, see Rule 810-3-1.1 -.01,
			 Operating Rules.
Authors:
Roger Frost, Sharon Norman, Hugh
				Kirkland, James Lucy, Lee Johnson, Betty Knowles
Statutory Authority:
Code of Ala.
				  1975
, §
										40-18-15.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.15 - Disability Income Exclusion

Current through Register Vol. 42, No. 9, June 28, 2024
(Repealed 1/18/00)
Authors:
Rebecca S. Whisenant, Roy Wiggins, Ann F.
				Winborne, CPA
Statutory Authority:
Code of Ala.
				  1975
, §
										40-18-15;
				  Act 90-583.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.16 - Medical And Dental Expenses

Current through Register Vol. 42, No. 9, June 28, 2024
A deduction is allowed for expenses paid during the taxable
				year, not compensated for by insurance or otherwise, for medical care of the
				taxpayer, his spouse, or a dependent, in accordance with  26 U.S.C. §
									213;
				provided, however, that the limitation of the deduction to the excess of those
				expenses over 7.5 percent of adjusted gross income as provided in  26 U.S.C. §
									213  shall instead be limited to the excess of those expenses over 4.0
				percent of adjusted gross income as defined in
Code of Ala.
				1975
, §
								40-18-14.2.
				For interpretation of federal statutes adopted by the Alabama Legislature, see
				Rule 810-3-1.1 -.01, Operating Rules.
Authors:
Roger Frost, Sharon Norman, Hugh
				Kirkland, James Lucy, Lee Johnson, Betty Knowles
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-15.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.17 - Charitable Contributions

Current through Register Vol. 42, No. 9, June 28, 2024
A deduction for charitable contributions is allowable to the
				extent allowed for federal income tax purposes under  26 U.S.C. §
									170;
				provided, however, that the contributions base shall be the adjusted gross
				income as defined in
Code of Ala. 1975
, §
								40-18-14.2,
				except for any net operating loss carryback deduction allowable by §
								40-18-15.2.
				For interpretation of federal statutes adopted by the Alabama Legislature, see
				Rule 810-3-1.1 -.01, Operating Rules.
Authors:
Roger Frost, Sharon Norman, Hugh
				Kirkland, James Lucy, Lee Johnson, Betty Knowles
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-15.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.18 - Conversion Of Primary Heating Source To Wood

Current through Register Vol. 42, No. 9, June 28, 2024
(Repealed 1/18/00)
Authors:
Mary L. Gifford, John H.
				Burgess
Statutory Authority:
Code of Ala.
				  1975
, §
										40-18-15.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.19 - Optional Standard Deduction. (REPEALED)

Current through Register Vol. 42, No. 9, June 28, 2024
Authors:
Roger Frost, Sharon Norman, Hugh
				  Kirkland, James Lucy, Lee Johnson, Betty Knowles
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-15.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.20 - Federal Income Tax Deduction - Individuals

Current through Register Vol. 42, No. 9, June 28, 2024
(1)
DEFINITIONS
. For the purpose of this
			 regulation, the following words, phrases and abbreviations have these meanings:
(a)
FIT
: Federal income tax. Depending on the
			 method used for computing FIT (cash basis or accrual method), deductible
			 federal income tax may include:
1. Federal
			 income tax withheld by employers during the taxable year.
2. Excess social security or Medicare tax
			 (FICA) and railroad retirement tax (RRTA) withheld during the taxable year and
			 claimed as federal income tax on the federal return for the same year. Regular
			 FICA and RRTA tax withheld cannot be claimed as federal income tax since these
			 can only be claimed as itemized deductions.
3. All federal income tax payments made
			 during the year for liabilities of prior years, including the previous year's
			 payment made when the previous year return was filed.
4. All federal income tax estimate payments
			 made during the year. Any overpayments of previous years which are applied to
			 the current year's estimated tax are not deductible unless the overpayment is
			 included in income as a refund of federal income tax.
5. Earned income credit of the previous year
			 which was applied to the previous year's federal income tax
			 liability.
6. Alternative Minimum
			 Tax.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.21 - Deductions For Nonresidents

Current through Register Vol. 42, No. 9, June 28, 2024
(1)
			 A nonresident is an individual who is a legal resident of another
			 state.
(2) The phrase "adjusted
			 gross income from all sources" is comprised of income which would be included
			 in gross income if received by a resident of the State of Alabama in accordance
			 with §
								40-18-14,
Code of Ala. 1975
, less the deductions described in
			 §
								40-18-14.2.
(3) Effective for all taxable years beginning
			 after December 31, 1997:
(a) Business-related
			 Expenses. The following business-related expenses are deductible in computing
			 Alabama adjusted gross income for a nonresident only to the extent that they
			 are paid or incurred in a trade or business within the State of Alabama:
1. Ordinary and necessary business expenses
			 in accordance with §
										40-18-15(a)(1),
2. Interest expense in accordance with §
										40-18-15(a)(2),
3. Taxes in accordance with §
										40-18-15(a)(3),
4. Losses in accordance with §§
										40-18-15(a)(4)
			 and (5),
5. Losses from debts ascertained to be
			 worthless in accordance with §
										40-18-15(a)(7),
6. Depreciation and amortization in
			 accordance with §
										40-18-15(a)(8),
7. Depletion in accordance with §
										40-18-15(a)(9),
8. Retirement savings contributions and
			 expenses for qualified pension plans, profit sharing plans, stock bonus plans,
			 and annuity plans in accordance with §§
										40-18-15(a)(11)
			 and (12),
9. Expenses incurred in removing barriers to
			 handicapped persons in accordance with §
										40-18-15(a)(19),
10. Section 179 expenses in accordance with
			 §
										40-18-15(a)(21),
11. Unreimbursed employee business expenses
			 and expenses described at  26 U.S.C. §
											212  in accordance with §
										40-18-15(a)(23),
			 and
12. Assistance provided to the
			 State Industrial Development Authority in accordance with §
										40-18-15(a)(25).
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.22 - Net Operating Loss Carryback Or Carryover

Current through Register Vol. 42, No. 9, June 28, 2024
(Repealed 1/18/00).
Authors:
Mary Gifford, Ann Winborne, Income Tax
				Division.
Statutory Authority:
Code of Ala.
				  1975
, §
										40-18-57.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.23 - Amortization Of Start-Up Expenditures

Current through Register Vol. 42, No. 9, June 28, 2024
(Repealed 1/18/00)
Author:
Mary L. Gifford, Income Tax
				Division
Statutory Authority:
Code of Ala.
				  1975
, §
										40-18-15,
				  Act 90-583.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.24 - Adoption Expenses

Current through Register Vol. 42, No. 9, June 28, 2024
(1) For
			 tax years beginning on or after January 1, 1991, resident individual taxpayers
			 may include as an adjustment to income, reasonable medical and legal expenses
			 paid or incurred by the taxpayer in connection with the adoption of a
			 minor.
(2) "Medical expenses" shall
			 include any medical and hospital expenses of the adoptee and the adoptee's
			 biological mother which are incidental to the adoptee's birth and subsequent
			 medical care which, in the case of the adoptee, are paid or incurred before the
			 petition for adoption is granted.
(3) Expenses associated with the adoption of
			 a minor that are not properly classified as medical or legal expenses as
			 stipulated in paragraphs (1) and (2) above are not to be considered in
			 computing the adjustment to income.
(4) In cases of adoption petitions which are
			 not granted, no deduction for medical and legal expenses will be allowed.
Authors:
Anne Simms, Roy Wiggins
Statutory Authority:
Act 90-583.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.25 - Contributions To State Industrial Development Authority

Current through Register Vol. 42, No. 9, June 28, 2024
(1) In computing adjusted gross income under
			 §
								40-18-15,
Code of Ala. 1975
, the following shall be allowed as a
			 deduction:
(a) The amount of aid of
			 assistance, whether in the form of property, services or monies, provided to
			 the State Industrial Development Authority pursuant to §
									41-10-44.8(d),
Code of Ala. 1975
.
1. The amount of aid or assistance provided
			 shall be deducted in the year contributed.
2. The deduction for property or services
			 shall be the fair and reasonable value of the property or services as
			 determined by the Authority.
3. Any
			 portion of aid or assistance returned pursuant to §
										41-10-44.8(d),
Code of Ala. 1975
, shall be included in income in the
			 year in which the refund of the aid or assistance is made.
Author:
Tina M. Melancon, Income Tax
				Division
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.26 - Qualified Long-Term Care Coverage

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Effective for taxable years beginning
			 after December 31, 1997, the amount of premiums paid for qualified long-term
			 care insurance coverage is deductible as an itemized deduction.
(2) For tax years beginning on or after
			 January 1, 1995, and ending December 31, 1997, individual taxpayers may include
			 as an adjustment to income the amount paid for premiums for qualifying
			 long-term care coverage pursuant to Section
			 40-18-15.
(3) "Qualified long-term care services" shall
			 include any 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 pursuant to a plan of care prescribed by a licensed health care
			 practitioner.
(4) Premiums paid for
			 long-term care insurance contracts are deductible if the contract meets the
			 following requirements:
(a) Offers coverage
			 only for qualified long-term care services and benefits incidental to the
			 coverage.
(b) Guaranteed
			 renewal.
(c) No cash surrender
			 value.
(d) All refunds of premiums
			 and all policyholder dividends or similar amounts under the contract are to be
			 applied as a reduction in future premiums or to increase future benefits,
			 except for a refund of premiums on surrender or cancellation of the
			 policy.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15 - DEDUCTIONS FOR INDIVIDUALS GENERALLY › Section 810-3-15-.27 - Deductions For Contributions To Alabama College Education Plans

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Definitions:
(a)
Qualifying
			 Plans
. Alabama college education plans as defined in Chapter 33C
			 of Title 16, to include:
1. The Alabama
			 Prepaid Affordable College Tuition Program (PACT), or
2. the Alabama College Education Savings
			 Program.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15.2 - NET OPERATING LOSS › Section 810-3-15.2-.01 - Net Operating Loss Carryback Or Carryover

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Computation of a Net Operating Loss
			 (NOL).
(a) A net operating loss is the amount
			 by which deductions (after modifications) exceed gross income. A net operating
			 loss may result from losses incurred in a trade or business, from the sale of
			 assets used in a trade or business, or from personal casualties or thefts.
1. For the purpose of computing the amount of
			 an allowable net operating loss, certain items of income, expense or deduction
			 will be classified as "business" or "nonbusiness." The following is a partial
			 list of items regularly classified as business or nonbusiness:
(i) Business. Business income, expense and
			 deductions include, but are not limited to: salary and wages; income or loss
			 from a trade or business; gain or loss from sale of assets used in a trade or
			 business; losses on Internal Revenue Code § 1244 stock (up to the amount
			 of ordinary loss allowed for federal income tax purposes); rental income or
			 loss; income or loss from a partnership; income or loss from an Alabama S
			 corporation; income or loss from farming; employee moving expenses; employee
			 business expenses; and casualty and theft losses.
(ii) Nonbusiness. Nonbusiness income, expense
			 and deductions include, but are not limited to: medical expenses; taxes;
			 interest expense; charitable contributions; miscellaneous deductions other than
			 employee business expenses; gain from the sale of a personal residence to the
			 extent recognized in accordance with §
											40-18-14,
Code of Ala. 1975
; gain or loss from the sale of
			 assets not used in a trade or business (including distributive shares of gains
			 or losses from such assets held by a partnership or an Alabama S corporation);
			 interest and dividend income (including distributive shares of interest and
			 dividend income received by a partnership or an Alabama S corporation); losses
			 on Internal Revenue Code §1244 stock (in excess of the amount of ordinary
			 loss allowed for federal income tax purposes) federal income tax refunds or tax
			 paid; alimony received; taxable pension and annuities; income or loss from a
			 trust or estate; deductible contributions to IRA retirement plans; Keogh
			 retirement plans; employee benefit contributions paid by an employer; penalties
			 for early withdrawal of savings; alimony paid and disability income
			 exclusions.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-15.3 - DEDUCTIONS FOR HEALTH INSURANCE PREMIUMS › Section 810-3-15.3-.01 - Deductions For Small Business Health Insurance Premiums

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Definitions:
(a)
Qualifying
			 Employers
. Employers with less than 25 employees.
1. An employee is any person defined as
			 "employee" under the definition provided in the Internal Revenue Code, as
			 amended from time to time.
2. "Less
			 than 25 employees" means not more than 24 employees to whom wages were being
			 paid simultaneously as determined on the last day of the tax year.
3. Only full-time employees will be included
			 in the number of employees to meet the "less than 25 employees" threshold. No
			 part-time employees will be taken into consideration to meet the "less than 25"
			 employee quota.
4. Both qualifying
			 and non-qualifying employees are counted in determining the number to be
			 considered for the total number of employees.
5. The spouse and children of a sole
			 proprietor are not counted in the number of employees for qualification
			 purposes.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-16 - BASIS FOR DEPRECIATION AND DEPLETION › Section 810-3-16-.01 - Basis For Depreciation And Depletion

Current through Register Vol. 42, No. 9, June 28, 2024
(1) The basis upon which depreciation and
			 depletion shall be computed is the adjusted basis for determining gain on the
			 sale or disposition of the property (including any taxes required to be
			 capitalized in connection with the acquisition of a capital asset), as
			 determined under §
								40-18-6,
			 except that at the option of the taxpayer:
(a) In the case of mines, or oil and gas
			 wells, depletion may be computed based on discovery value, if the conditions of
			 Code §
									40-18-16(b)(2) are met. (see Reg.
			 810-3-15-.06(6)).
(b) In the case of oil and gas
			 wells only, for taxable years beginning on or after January 1, 1953, a taxpayer
			 may deduct for depletion an amount equal to 27 1/2% of the gross income from
			 the property during the taxable year, computed on the same basis and subject to
			 the same limitations as provided in the Federal Income Tax Act in effect on
			 September 17, 1953, the effective date of Act No. 719-1953 General Acts of
			 Alabama. These limitations on the amount of percentage depletion which may be
			 deducted are:
1. the amount may not be more
			 than fifty percent of the net income from the property before the deduction for
			 depletion, and
2. the amount may
			 not be less than the depletion computed under the cost method.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-16 - BASIS FOR DEPRECIATION AND DEPLETION › Section 810-3-16-.02 - Allowable Capital Additions, Mines And Oil And Gas Wells

Current through Register Vol. 42, No. 9, June 28, 2024
(1) All expenditure
			 in excess of net receipts from minerals sold shall be charged to capital
			 account recoverable through depletion while the mine is in the development
			 stage. The mine will be considered to have passed from a development to a
			 producing status when the major portion of the mineral production is obtained
			 from workings other than those opened for the purpose of development, or when
			 the principal activity of the mine becomes the production of developed ore
			 rather than the development of additional ores for mining.
(2) Expenditures for plant and equipment and
			 for replacements not including expenditures for maintenance and for ordinary
			 and necessary repairs, shall ordinarily be charged to capital account
			 recoverable through depreciation. Expenditures for equipment (including its
			 installation and housing) and for replacements thereof, which are necessary to
			 maintain the normal output solely because of the recession of the working faces
			 of the mine, and which
(a) do not increase
			 the value of the mine, or
(b) do
			 not decrease the cost of production of mineral units, or
(c) do not represent an amount expended in
			 restoring property or in making good the exhaustion thereof for which an
			 allowance is or has been made, shall be deducted as ordinary and necessary
			 business expenses.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-17 - ITEMS NOT DEDUCTIBLE › Section 810-3-17-.01 - Items Not Deductible

Current through Register Vol. 42, No. 9, June 28, 2024
(1)
			 Costs and expenses which are not deductible for income tax purposes include,
			 but are not limited to:
(a) Personal, living,
			 and family expenses such as:
1. Premiums paid
			 for life insurance by the insured.
2. Cost of insuring a dwelling owned and
			 occupied by the taxpayer as a personal residence.
3. Expenses of maintaining a household,
			 including amounts paid for rent, water, utilities, domestic services, home
			 repair or improvements, etc.
4.
			 Expenses incurred for care of dependent children including child support, even
			 if both spouses work.
5. Losses
			 sustained by the taxpayer upon the sale or other disposition of property held
			 for personal, living, and family purposes.
6. Travel expenses or automobile expenses not
			 deductible under Section
			 40-18-15.
7. Cost of wearing apparel unless such
			 wearing apparel is required as a condition of employment and is not suitable
			 for street wear.
8. Amounts paid as
			 damages, attorneys' fees and other costs of suit to recover such damages.
			 However, damages in settlement of a suit, claim or judgement arising out of a
			 trade or business or transactions entered into for profit are
			 deductible.
9. Attorneys' fees paid
			 in a suit for separation or divorce.
10. Losses sustained and expenses incurred in
			 illegal transactions.
11. Dues to
			 fraternal and social organizations, etc.
12. Gambling losses in excess of
			 gains.
13. Adoption expenses - for
			 tax years prior to January 1, 1991 are not deductible. For tax years subsequent
			 to December 31, 1990, see Rule
			 810-3-15-.24.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-19 - EXEMPTIONS - GENERALLY › Section 810-3-19-.03 - Income Realized From A Financial Business

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Income realized in conducting a business
			 subject to the excise tax on financial institutions imposed by §
								40-16-1,
et
seq
., and where such
			 excise tax is paid, is excluded from gross income under the provisions of
			 Chapter 18 of Title 40.
(2)
			 Salaries paid by businesses subject to the financial institution excise tax,
			 allowed as deductions to such businesses under §
								40-16-1(2)(a) are included in gross income of the recipient for income tax purposes under
			 Chapter 18.
Authors:
Rebecca S. Whisenant and John H.
				Burgess.
Statutory Authority:
Code of Ala.
				  1975
, §
										40-18-19.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-19 - EXEMPTIONS - GENERALLY › Section 810-3-19-.04 - Defined Benefit Plans

Current through Register Vol. 42, No. 9, June 28, 2024
(1)
			 Payments made to a retiree or his designated beneficiary under a "defined
			 benefit plan," as defined by IRC §414(j), as amended from time to time,
			 are exempt from Alabama income tax for an individual resident taxpayer, to the
			 extent such payment would be taxable for federal income tax purposes.
(2) A "defined benefit plan" is any plan that
			 is not a "defined contribution plan." A "defined contribution plan" is a plan
			 that provides an individual account for each participant and for benefits based
			 solely on the amount contributed to the participant's account, and for income,
			 expenses, gains and losses, and any forfeitures of accounts of other
			 participants which may be allocated to such participants' accounts. This
			 includes plans such as profit sharing, stock bonus, and money purchase pension
			 plans. These plans "could" be Keogh, SEP, or IRA plans. In a "defined
			 contribution plan" such as a money purchase plan, contributions will be
			 specified (not based on profits) and the benefits are whatever these
			 contributions will provide. "Defined benefit plans" may include pension and
			 annuity plans, but all such plans are not necessarily "defined benefit plans."
			 A "defined benefit plan" is one in which the contributions are based on a
			 computation of what contributions are needed to provide definitely determinable
			 benefits to plan participants. That is, contributions are dependent on promised
			 benefits. Contributions to the plan are actuarially calculated to provide the
			 promised benefits.
(3)
(a) A lump-sum distribution from a defined
			 benefit plan- which is rolled over into another type of retirement plan or
			 account is not taxable and is considered as basis in the new account.
(b) Distributions rolled into an individual
			 retirement account (IRA) are not deductible as an adjustment to
			 income.
(c) Any earnings or income
			 produced by the amount invested in another plan or account represents taxable
			 income. The taxable portion of distributions from the account is computed pro
			 rata, similar to nontaxable IRA distributions.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-19.1 - SEVERANCE PAY EXEMPTION › Section 810-3-19.1-.01 - Severance Pay Exemption

Current through Register Vol. 42, No. 9, June 28, 2024
(1)
DEFINITIONS
. The following terms have these meanings
			 for the purposes of this rule:
(a)
Administrative Downsizing
. A reduction in the
			 employer's workforce or discontinuance or relocation of the operations of the
			 employer in accordance with a business plan. Administrative downsizing does not
			 include:
1. The transfer or exchange of
			 employees between related taxpayers as described in
			 26
			 U.S.C. §
											267.
2. The transfer or exchange of employees to
			 another legal entity with such employees continuing to perform essentially the
			 same or related duties for the former employer.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-20 - MILITARY RETIREMENT BENEFITS › Section 810-3-20-.01 - Military Retirement

Current through Register Vol. 42, No. 9, June 28, 2024
(Repealed).
Author:
Rebecca S. Whisenant
Statutory Authority
:
Code of Ala.
				1975
, §
								40-18-20.
History
: Adopted September 30, 1982.
Amended:
filed June 17, 1988; filed July 27, 1988; May 15, 1992.
Repealed:
Filed September 15, 1998; effective October 20,
				1998.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-21 - CREDIT FOR TAXES PAID ON INCOME FROM SOURCES OUTSIDE THE STATE › Section 810-3-21-.02 - Credits For Job Development Fees

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Any taxpayers who is subject to the
			 personal income tax imposed by Section
			 40-18-2 and has had a Job Development Fee withheld from the taxpayer's wages by an
			 Approved Company pursuant to Section
			 41-10-44.8(b) is allowed a credit against the taxpayer's state personal income tax liability
			 for the year in which the Job Development Fee has been withheld. The credit is
			 allowed to the taxpayer in an amount equal to the Job Development Fee withheld
			 from the taxpayer's wages by the Approved Company during such year.
(a) The Job Development Fee credit allowed
			 pursuant to paragraph (1) above shall be included in computing the taxpayer's
			 total withholding tax liability pursuant to Section
			 40-18-71.
(b) In the event that the Job Development Fee
			 withheld from a taxpayer's wages during the year by an Approved Company exceeds
			 the taxpayer's state personal income tax liability for such year, the taxpayers
			 shall be entitled to a refund. Such refund shall be issued to the taxpayer by
			 the Department in an amount equal to the difference between the taxpayer's
			 state personal income tax liability and the Job Development Fee withheld from
			 the taxpayer's wages by the Approved Company.
Authors:
Tina M. Melancon, Ann F. Winborne, Income
				Tax Division