Alabama grants automatic extensions and offers a distinctive federal income tax deduction, but its corporate return does not follow the federal April date — Form 20C is due in May. The state also has an elective pass-through entity tax and recently eliminated the Business Privilege Tax for small filers.
Alabama Tax Deadlines at a Glance (2026)
Entity Type | Return Due | Extended Due Date |
|---|---|---|
Individuals (Form 40) | April 15, 2026 | October 15, 2026 |
C Corporations (Form 20C) | May 15, 2026 | November 15, 2026 |
S Corporations (Form 20S) | March 16, 2026 | September 15, 2026 |
Partnerships (Form 65) | March 16, 2026 | September 15, 2026 |
The key correction: Form 20C is due May 15, 2026 — one month after the federal deadline, under Act 2022-53 — not April 15, with the extension running to November 15. Individuals file by April 15 (automatic extension to October 15), and S corporations (Form 20S) and partnerships (Form 65) follow the March 16, 2026 deadline (March 15 is a Sunday). Extensions are automatic; tax is still due on the original date.
Rates and the Federal Tax Deduction
Alabama’s individual income tax is graduated at 2%, 4%, and 5% (top rate 5%); the corporate rate is 6.5%. A notable Alabama feature: the state allows a deduction for federal income taxes paid — one of only a few states to do so — which meaningfully lowers effective state tax and should be built into projections.
The Electing PTE Tax and BPT Change
Alabama’s elective Electing Pass-Through Entity (EPT) tax is a flat 5%, filed on Form EPT with the Form 20S or 65. Note a change: for tax years beginning in 2025, the election is made on the timely-filed return (including extensions), not the old 15th-day-of-the-third-month deadline. Separately, the Business Privilege Tax was eliminated for taxpayers owing $100 or less (effective 2024), removing a filing requirement for many small entities.
Estimates, Extensions, and Penalties
Individual estimated payments (Form 40ES) are due April 15, June 15, September 15, 2026, and January 15, 2027. Interest ties to the federal underpayment rate (7% for the first quarter of 2026, 6% for the second). The failure-to-file penalty is the greater of 10% of tax due or $50; failure-to-pay is 1% per month (max 25%).
CPA Action Steps
Use May 15 for the C-corp Form 20C — not April 15
Build in the Alabama federal income tax deduction
Make the EPT election on the timely-filed return (2025 rule change)
Check whether small-entity clients are now exempt from the BPT
Verify current rates and dates against the Alabama Department of Revenue (revenue.alabama.gov) before filing.