Is cancellation of debt taxable income alabama

[mstvette]

Do I report a 1099-C on my Alabama tax return

[AmandaR1]

Yes, if your 1099-C is taxable for federal, it is also taxable in Alabama. Alabama follows federal income unless they specifically exclude a type of income. 

You can see income exclusions here at the state website: https://revenue.alabama.gov/individual-corporate/taxes-administered-by-individual-corporate-income-t...

Note: if your liabilities are greater than your assets, you are considered insolvent and do not need to report your 1099-C, even if it would otherwise be taxable. Be sure to complete the worksheet on page 6 to determine if you are insolvent and to keep for your records: https://www.irs.gov/pub/irs-pdf/p4681.pdf