Alabama Amends Deadline for Making Pass-Through Entity Tax Election

By Denis Del Bene

Alabama has enacted legislation amending the due date for an Alabama pass-through entity to make an election to be taxed at the entity level for income tax purposes. (L. 2024, H187 (Act 113), effective 04/25/2024.)

Election deadline amended.

The legislation provides that, for tax years beginning on or after January 1, 2024, an electing pass-through entity must submit the appropriate form to the Alabama Department of Revenue on or before the due date for filing the applicable income tax return, including any extensions, following the close of the tax year for which the entity elects to be taxed as an electing pass-through entity. Previously, a pass-through entity had to submit the election to the Department on or before the 15th day of the third month following the close of the tax year for which the entity elected to be taxed at the entity level.

Election to be made on tax return.

For tax years beginning on or after January 1, 2025, the legislation provides that any election or revocation must be made on the electing pass-through entity’s timely filed return, including any extensions.