AL HB187

Extends the deadline for Alabama S corporations and subchapter K entities to elect taxation as electing pass-through entities, with different deadlines based on tax year.

For tax years 2021-2023, entities must submit election forms by the fifteenth day of the third month following the close of the tax year.

For tax years beginning January 1, 2024 and later, entities must submit election forms by the due date for filing the applicable income tax return, including any extensions granted.

Beginning with tax years starting January 1, 2025, elections or revocations must be made on the timely filed return, including any extensions.

Electing pass-through entities pay tax at the highest marginal rate under Alabama law, with individual owners, members, partners, or shareholders not liable for income tax on their distributive shares.