I am a non resident of Alabama and received a federal form 1065 K-1 for earnings received from Alabama. I entered the data and my federal forms filled out nicely. However, when I looked at my Alabama return nothing shows up. All other data transferred from Federal just fine. I did notice that on a Alabama form 65 K-1 shows an amount in part III column z. (composite payment made on partner's behalf). Does that mean that the taxes were paid and I don't have to submit this K-1?
You will have to file a nonresident return. The composite payment made on a partner’s behalf is like “withholding.” You may owe more or less than the amount paid.
There is a screen in the Alabama section for K-1 income. If you are not an Alabama resident, the screen may be blank. You’ll have to check off the type of entity: partnership, estate/trust or S corporation and fill in the details – name, address, EIN, amount of income from all sources and the Alabama amount.
Generally, a nonresident of Alabama must file an Alabama state tax return if he or she received taxable income from an Alabama source or performed services within Alabama and the gross Alabama income exceeds the allowable personal exemption. The personal exemption is prorated based on the amount of Alabama income compared to the amount of federal income.
In your case, since there was a payment made by the partnership, file a return to receive a refund or pay a balance due.
I received a message from Turbo Tax about not filing my Alabama state tax. However, I did. Was this for 2019 or 2020?
I filed a state return for 2019 but my taxes were paid by my LLC in Alabama. I had no income in 2020.
@rfthomasjr I’m unsure what year TurboTax is referring to as I did not see the message. Did you already file a 2020 federal return?
TurboTax would have sent you a message that your 2019 AL taxes were accepted. If you received that e-mail, TurboTax is probably talking about 2020. We don’t want you to forget to file if you are required to. If you had no AL income, you do not have to file a state return.