The Alabama Department of Revenue recently confirmed by telephone that payers will be required to file Form 1099-NEC with the state in accordance with existing information return filing requirements. Alabama has not updated their guidance to date and is unlikely to do so prior to the state’s due date for 1099 forms. However, Form 1099-NEC will be among the required reporting for the taxable year, subject to the same filing threshold: if state withholding is reported or if the payment reported on the form represents $1,500 or more in Alabama taxable income the 1099-NEC must be reported directly to the state. The 1099-NEC will be due along with all other 1099 forms reported to Alabama on January 31, 2021.
When filing 1099 forms electronically, including Form 1099-NEC, filers must include a state ID, known in Alabama as a State Employer Account Number or Alabama Withholding Tax Account Number.
To review the existing guidance for 1099 reporting to Alabama, click here to visit the Alabama Department of Revenue’s website.