HB504 Alabama 2010 Session

Summary

Primary Sponsor

Charles O. Newton

Republican

Session

Regular Session 2010

Title

Income tax, estimated individual and corporate payments to conform to federal system, individual estimated tax payment threshold increased, corporate estimate tax payment threshold decreased, Secs. 40-18-80, 40-18-80.1 am'd.; Secs. 40-18-82, 40-18-83, 40-18-83.1, 40-18-85 repealed

Summary

HB504 aligns Alabama's estimated income tax payments with federal rules by raising the individual threshold, lowering the corporate threshold, and repealing several older Alabama provisions.

What This Bill Does

The bill amends 40-18-80 and 40-18-80.1 to implement conformity with federal estimated tax rules and repeals sections 40-18-82, 40-18-83, 40-18-83.1, and 40-18-85. For individuals, it adopts federal-like estimated tax rules with modifications and raises the threshold requiring estimated payments (including substituting $500 for a federal amount). For corporations, it implements a lower threshold for needing to make estimated payments and details the installment schedule, calculation of required payments, and related penalties. The changes take effect for tax years beginning after December 31, 2009.

Who It Affects

• Individuals: will follow federal-style estimated tax payment rules with a higher threshold to trigger estimated payments (plus a $500 substitute amount in certain provisions).
• Corporations: will face a lower threshold for required estimated tax payments and apply federal-style rules for calculating and paying installments, including penalties for underpayment.

Key Provisions

• Conforms Alabama estimated income tax payments to federal rules (with modifications) and repeals outdated Alabama statutes (40-18-82, 40-18-83, 40-18-83.1, 40-18-85).
• Increases the individual estimated tax payment threshold and substitutes a $500 amount for a specific federal threshold when determining underpayment penalties for individuals.
• Decreases the corporate threshold for requiring estimated tax payments and sets four quarterly installments (due April 15, June 15, September 15, December 15) with rules on the amount of each installment.
• Requires underpayment penalties for corporations using the federal rate (6621) and defines the period and amount for underpayment calculations.
• Defines the 'required annual payment' for corporations (generally the lesser of current year tax or prior year tax, with exceptions for large corporations and other special rules).
• Effective for tax years beginning after December 31, 2009.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation