No, you are not required to file an Alabama return. Alabama would require a return if you had a gain on the rental, but you are not required to file the loss if you are a nonresident. However, you may still choose to do so. The following FAQ comes from the Alabama DOR website (click on link): https://revenue.alabama.gov/incometax/itfaq01.cfm
Who must file an Alabama individual income tax return?
- Full year residents whose filing status is "Single" must file if gross income for the year is at least $4,000. Full year residents whose filing status is "Married Filing Separate Return" must file if gross income for the year is at least $5,250. Full year residents whose filing status is Head of Family" must file if gross income for the year is at least $7,700. Those whose filing status is "Married Filing Joint Return" and whose gross income for the year is at least $10,500 must file an Alabama income tax return.
- Part year residents whose filing status is "Single" must file if gross income for the year is at least $4,000 while an Alabama resident. Full year residents whose filing status is "Married Filing Separate Return" must file if gross income for the year is at least $5,250 while an Alabama resident. Full year residents whose filing status is Head of Family" must file if gross income for the year is at least $7,700 while an Alabama resident. Those whose filing status is "Married Filing Joint Return" and whose gross income for the year is at least $10,500 must file an Alabama income tax return while an Alabama resident.
- Nonresidents must file a return if Alabama income exceeds the allowable prorated personal exemption. (A rental loss will not exceed the exemption. Italics added)
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