Alabama 1099 Filing Requirements

Yes, the Alabama Department of Revenue requires filing 1099 forms for payments made to residents or nonresidents.

• You must file 1099 forms directly with the state if Alabama state tax was withheld.
• If there is no state tax withholding but the total reportable payments exceed $1,500 (Alabama threshold), the IRS will forward your federal 1099 forms to Alabama under the Combined Federal/State (CF/SF) Program.
• If there is no state tax withholding and the payment amount is less than $1,500, filing is not required with the Alabama Department of Revenue.

Form A-3 is an Annual Reconciliation used to report the total income taxes withheld from employees/contractors and taxes remitted to the state. It's also used to claim an overpayment refund or pay if the taxes are underpaid.

The due date to file 1099 with Alabama is based on whether or not state income taxes were withheld.

• If taxes were withheld, Form 1099 is due by January 31.
• If there were no taxes withheld, Form 1099 is due by March 15.
• Form 1099-K is due 30 days after the federal deadline, which is April 30.

If the deadline falls on a weekend or federal holiday, the next business day is the deadline.

The State of Alabama mandates electronic filing and tax payment if the payer makes a single withholding tax payment of $750 or more. The state also encourages the payers who make lesser payments (< $750) to file electronically.

• Late filing of a withholding tax return incurs a penalty of 10% of the tax due or a minimum of $50, whichever is higher.
• The penalty for late payment of withholding tax is 10% of the tax due.
• In cases where both return and payment are made late, you will be subjected to both penalties.