Businesses operating in Alabama — whether structured as corporations, LLCs, partnerships, or pass-through entities — must comply with both income tax and Business Privilege Tax (BPT) obligations. Understanding which returns to file, when they are due, and how extensions work is essential for maintaining compliance and avoiding penalties.
This comprehensive guide explains each element in detail, including business income tax returns, deadlines, Alabama extension rules, LLC and partnership extension details, extensions for estates and trusts, and state payment requirements.
What Are Alabama Business Income Tax Returns?
Business income tax returns are annual filings required from entities that operate in Alabama or earn income from sources within the state. These returns report the business’s income, deductions, apportionment, tax credits, and final tax liability.
In Alabama, “business income tax returns” may refer to several different filings depending on the entity type:
1. C-Corporation Income Tax Return (Form 20C)
C-corporations engaged in business in Alabama — whether domestic or foreign — must file the Alabama corporate income tax return 20C. The return includes details about gross income, apportionment, taxable income, deductions, credits, and tax calculations.
2. S-Corporation Income Tax Return (Form 20S)
Although S-corporations generally pass income through to shareholders, Alabama still requires the entity to file an informational return 20S. Certain taxes may apply, such as optional composite payments or nonresident shareholder tax obligations.
3. Partnership Income Tax Return (Form 65)
Partnerships, including multi-member LLCs taxed as partnerships, must file the partnership return 65 to report income and distributive shares to partners.
4. Business Privilege Tax (BPT) Return
Most business entities must also file an annual Alabama Business Privilege Tax return. This tax applies to corporations, S-corporations, LLCs, limited partnerships, and other entities formed or registered in Alabama.
5. Fiduciary Income Tax Returns (Estates and Trusts)
Estates and trusts with income sourced to Alabama may be required to file fiduciary returns. These filings report income distributed to beneficiaries and income retained by the trust or estate.
In short, “business income tax returns” is a broad term encompassing multiple Alabama filings. The specific return depends on your business structure and tax classification.
When Is the Deadline to File Alabama Business Income Tax Returns?
Alabama return deadlines vary by entity type. Understanding these due dates is essential for compliance.
1. Alabama C-Corporation Tax Return Deadline
For calendar-year C-corporations:
The Alabama corporate income tax return is due May 15.
Alabama return deadlines typically fall one month after the federal due date, giving corporations additional time.
Fiscal-year corporations follow similar rules — returns are due on the 15th day of the fourth month after year-end (or the third month for June 30 year-end filers).
2. S-Corporation Return Deadline
For calendar-year S-corps:
The return is due April 15.
Fiscal-year S-corps must file by the 15th day of the fourth month after their tax year closes.
3. Partnership / LLC (Taxed as Partnership) Deadline
For calendar-year partnerships and multi-member LLCs:
The return is due April 15.
Fiscal-year entities file by the 15th day of the fourth month after year-end.
4. Business Privilege Tax Return Deadline (BPT)
Deadlines depend on the type of entity:
- Corporations (calendar or fiscal year except June 30 filers):
Due 3.5 months after the beginning of the taxable year. - Corporations with June 30 year-end:
Due 2.5 months after the beginning of the taxable year. - LLCs and most limited liability entities:
BPT returns are due 2.5 months after the beginning of the taxable year.
5. Estates and Trusts
Fiduciary return due dates typically follow federal deadlines unless otherwise specified. An extension to file does not extend the time to pay.
Can I File an Extension to Obtain More Time to File an Alabama Business Privilege Tax Return?
Yes. Alabama provides a six-month automatic extension of time to file the Business Privilege Tax return — but only for filing, not for payment.
Key points:
- Most taxpayers receive an automatic 6-month extension to file the BPT return.
- This extension generally aligns with the federal extension obtained for the entity’s federal return.
- The extension applies to both CPT (corporate privilege tax) and PPT (partnership privilege tax) filers.
- Financial institutions follow different timelines under the Alabama Financial Institution Excise Tax.
- No extension is allowed for the initial BPT-IN return required when a new entity is formed.
- The tax amount owed must be paid by the original due date, even if the return filing is extended.
This means your business can take extra time to file, but not extra time to pay the tax liability.
Alabama Corporate Tax Extension
Alabama corporate filers benefit from an extension rule similar to federal tax law.
Automatic Filing Extension
If a corporation files a federal Form 7004 to extend its federal return, Alabama automatically extends the state return as well.
Additional points:
- Alabama allows one extra month beyond the federal due date for corporate returns.
- The extended Alabama deadline therefore typically falls one month after the federal extended date.
- The corporation must show proof of filing a federal extension when submitting the Alabama return.
Payment Requirements
- Even with an extension to file, tax must be paid by the original Alabama due date (usually May 15 for calendar-year corporations).
- Late payments result in penalties and interest, even if the return is filed on time using an extension.
Why This Matters
Extensions are especially valuable for corporations with complex apportionment, multistate income, or substantial accounting work that requires time to finalize — but they must still make timely estimated tax payments.
Alabama LLC Tax Extension & Alabama Partnership Tax Extension
LLCs taxed as partnerships and partnerships themselves follow extension rules similar to corporations and S-corporations.
Automatic Filing Extension
- If the partnership or LLC files a federal extension, Alabama automatically grants a state extension.
- This applies to both Form 65 (partnership return) and Form PPT (privilege tax return).
Rules to Remember
- The extension covers filing only.
- Any taxes or required composite payments must be paid by the original due date (generally April 15).
- The extension does not change BPT payment requirements.
LLCs Taxed as Corporations
If an LLC elects to be taxed as a corporation, it follows corporate deadlines and extension rules.
Tax Extensions for Estates and/or Trusts
Although Alabama’s guidance is most specific for corporations and partnerships, fiduciaries generally follow the same principles:
- If the estate or trust obtains a federal extension, Alabama typically accepts it for state filing purposes.
- The extension allows additional time to** file the Alabama fiduciary return**, but not additional time to pay any tax due.
- Payments must be made by the original due date to avoid penalties and interest.
Fiduciary returns often include complex income items such as business income, rentals, K-1 passthrough income, or capital gains — making extensions helpful for accurate preparation.
Alabama Extension Payment Requirement
This is one of the most critical points in Alabama’s tax compliance system.
Alabama Extensions Extend Time to File — NOT Time to Pay
Across all entity types — corporations, partnerships, LLCs, S-corporations, trusts, estates, and BPT filers — Alabama requires:
- Full tax payment by the original due date.
- Interest charges if tax is not paid on time.
- Penalties for late payment, even if the return is filed by the extended due date.
If You File Late but Pay On Time
You may avoid late-filing penalties but will still owe interest if payment was late.
If You Pay Late but File On Time
You will incur late-payment penalties and interest.
How to make an Alabama extension payment?
Extension payments can be submitted through the My Alabama Taxes (MAT) online portal. Businesses must select the applicable tax type (Corporate Income Tax, Business Privilege Tax, Pass-Through Entity Tax, or Fiduciary Tax) and pay the estimated amount by the original due date.
Final Thoughts
Filing a tax extension in Alabama is a straightforward process — especially because the state aligns closely with federal extension rules. However, the most important rule is this:
An extension gives you more time to file, but not more time to pay.
Whether your business is a corporation, partnership, LLC, fiduciary, or BPT-liable entity, make sure taxes are paid by the original due date to avoid penalties and interest. Use the extension period to complete complex filings accurately and thoroughly.
