Due to the a recent legislation change, the Alabama Department of Revenue recently revised the Federal Income Tax (FIT) Deduction worksheet. The corresponding software changes were recently released on March 29th. The legislation changes resulted in a new Part 2 section being added to the FIT worksheet. Per the new schema and instructions, Part 2 was optional if it did not apply to the taxpayer. However, the Alabama Department of Revenue has been rejecting returns with the following rejection codes, indicating that Part 2 must be sent all the time.
- AL40-FIT-800
- AL40-FIT-810
- AL40-FIT-830
In the meantime, the 2020 federal credit amounts can be manually calculated and entered on the worksheet. However, if you wish to leave the 2020 federal credit amounts blank, the state is requesting that a value of 9999999999 be entered on the FIT worksheet, Part 2, Line 3.
We are in the process of updating the software to automate these 2020 federal tax calculations along with the revised e-file business rules for Part 2, with an expected release date by April 30th.
Recommendation: If you have clients impacted by the FIT worksheet legislation changes and/or the above rejection codes, we recommend to file an Alabama extension and pay any associated taxes by April 18th.
