Skip to main content
Columns at the Delaware County Court of Common Pleas, Media, Pennsylvania

Alabama Extends Pass-Through Entity Election Due Date

Alabama's new Act 2024-113 allows pass-through entities more time to elect entity-level taxation.
banner background

On April 25, 2024, Governor Kay Ivey signed H.B. 187 into law as Act 2024-113. This law amends the Alabama Electing Pass-Through Entity Tax Act (Section 40-18-24.4), extending the deadline for a pass-through entity to elect to be taxed as an electing pass-through entity in Alabama. An electing pass-through entity is an S corporation or partnership that has elected to pay Alabama income tax at the entity level.

Under the amended statute, for tax years beginning on or after January 1, 2024, a pass-through entity may make the election to be taxed at the entity level on or before the tax return filing deadline, including any extensions granted (September 15 for calendar-year filers). The election is then binding for all subsequent years unless the entity submits the required documentation to revoke the election. Previously, an electing pass-through entity was required to make the election by the 15th day of the third month following the close of the tax year of the election (March 15 for calendar-year filers).

As a result of this legislation, on May 1, 2024 the Alabama Department of Revenue issued a press release, also extending the pass-through entity election deadline for the 2023 tax year for taxpayers who showed an intention to make the election by completing any of the criteria listed below.

  • Timely filed the required entity tax return, as if the election had been properly made for this year.
  • Timely made an electing pass-through entity extension payment; or
  • Made an entity-level payment prior to the due date of the respective return.

Entities making the election for tax years beginning before January 1, 2025 must do so online by accessing My Alabama Taxes.

For tax years beginning on or after January 1, 2025, both the election and revocation of the election will be made on a timely filed tax return.

If you have any questions or need assistance, please reach out to one of our SALT professionals at Forvis Mazars.

Related FORsights

Like what you see?
Subscribe to receive tailored insights directly to your inbox.