Article: 50147

Overview

Alabama Form 40 and 40NR Filing Requirements for Part-Year Residents with Nonresident Income

If an individual has sufficient income to require filing a part-year resident return and also received income from Alabama sources while a nonresident during the same tax year, both Form 40 (Part-Year Resident Return) and Form 40NR (Nonresident Return) must be filed.

In such cases:

• Both the personal exemption and the dependent exemption must be claimed on the part-year resident return (Form 40).
• No exemptions should be claimed on the nonresident return (Form 40NR).

Each return must reflect income and deductions applicable to the respective residency period:

• Form 40 should include only income and deductions for the period the taxpayer was a resident of Alabama.
• Form 40NR should include only income and deductions for the period the taxpayer was a nonresident.

The taxpayer must make the appropriate election to confirm that the return complies with these requirements. This ensures that personal and dependent exemptions are not incorrectly calculated on Form 40NR.

Reporting of Alabama Election to File Both Form 40 and 40NR.

If you need to file both Alabama 40 and 40NR tax returns for the tax year you will need to make the election in the Alabama data entry. Follow the steps below:

1. Go to the State taxes section.
2. Click on the Review tab on the left-hand side.
3. Select I’d like to see the forms I’ve filled out or search for a form.
4. In the drop list, select Alabama.
5. Select the General tab.
6. Select 40NR – Income Tax Return – Pg 1.
7. Check the Must file both Forms 40 and 40NR box.
8. Click Save to apply changes.

Additional Information

For more information, see the AL Statuses for Individual Tax Returns.