If you do not have a My Alabama Taxes account, you may create one for your Pass-Through Entity at. The election is binding for the initial year in which the election is made and for all subsequent tax years unless the entity properly elects to no longer be taxed as an Electing PTE. BMSS will also be providing additional instruction as needed to its clients who have decided to make the election. The Q&A provides screenshots of the election process.
The taxpayer will then follow the instructions to make the election. The second Q&A in this guidance confirms that the Electing PTE must submit Form PTE-E via My Alabama Taxes (MAT) by logging into MAT then going to the Pass-Through Entity account. In late January 2022, the Alabama Department of Revenue released additional guidance in the form of a question and answer page on Electing PTEs.
Therefore, elections for calendar year 2021 are due no later than March 15, 2022, with no extension of time. Therefore, for calendar year PTEs, 2021 is the first year for which the election is available.Įlections can be made at any time during the tax year but no later than the 15th day of the third month following the close of the tax year for which the entity wishes to be taxed as an Electing PTE. The election may be made for tax years beginning on or after January 1, 2021. In previous Beyond the Bottom Line Newsletters, we introduced you to The Alabama Electing Pass-Through Entity Tax Act (Act 2021-1 and Act 2021-423), which allows Alabama S-Corporations and Subchapter K entities (pass-through entities or PTEs) to elect to pay Alabama income taxes at the entity level. Update on the Alabama Electing Pass-Through Entity Tax Act Enacted During 2021
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