Alabama Department of Revenue offers tax relief to Hurricane Michael victims
The Alabama Department of Revenue (ADOR) has acted quickly in announcing tax relief for Hurricane Michael victims. The tax relief measures will mirror IRS measures in the same declared disaster areas. “Our thoughts and good wishes continue to be with the millions of people who have been affected by recent disastrous storms, including Hurricane Michael,” said Revenue Commissioner Vernon Barnett. “The Alabama Department of Revenue is offering this tax relief to hopefully help ease some of the burden on victims as they begin the process of rebuilding.” ADOR will grant filing extensions to taxpayers directly affected by Hurricane Michael. Alabama taxpayers residing in areas designated as disaster areas by the federal government have until Jan. 31, 2019, to file tax returns due on or after Oct. 10, 2018, and before Jan. 31, 2019. Penalty relief will be provided during the extension period. Taxpayers seeking this Alabama tax relief should write “Michael Relief – 2018” in red ink on any state paper return/report which relies on this filing extension relief. Affected taxpayers filing electronically should contact ADOR for filing guidance. Taxpayers may contact the following ADOR offices by telephone: Individual income tax: 334-353-0602 Corporate income tax: 334-242-1200 Pass-through entities: 334-242-1033 Sales and use tax: 334-242-1490 Business privilege tax: 334-353-7923 Withholding tax: 334-242-1300 This relief will apply to eligible localities as listed in the IRS announcement, when available, at https://www.irs.gov/newsroom/tax-relief-in-disaster-situations. Taxpayers in localities added later to the disaster area, including those in other states, will automatically receive the same filing and payment relief. In addition, taxpayers in areas not specifically designated as disaster areas who encounter difficulty filing on time due to weather-related circumstances associated with Hurricane Michael may be eligible to request a waiver of late-filing and late-payment penalties after providing appropriate documentation to ADOR.
State issues guidance on how Donald Trump’s tax cuts will impact on Alabama
The Alabama Department of Revenue (ADOR) on Tuesday issued its preliminary guidance on the impact of the provisions of the Tax Cuts and Jobs Act (TCJA) to the State of Alabama. Passed by Congress and signed into law by President Donald Trump on Dec. 2017, the TCJA enacted changes across the board to the federal tax system for both businesses and individuals, primarily for tax years beginning on or after Jan. 1, 2018. According to ADOR’s 50-page guidance, “the overall impact of the federal changes as it relates to Alabama income taxes is unknown until all provisions are in effect.” In fact the guidance is preliminary and subject to revision as more information becomes available, including additional federal guidance and input from other tax administrative agencies and/or the private sector. The guidance addresses whether, and how, the provisions of the TCJA are tied to Alabama’s taxing regime, as they relate to individuals (including sole proprietors), corporations, and financial institutions. “Since the Alabama corporate income tax is tied to the definition of federal taxable income ‘as in effect from time to time’, much of the fiscal impact of the TCJA on our corporate income tax revenues is automatic,” Bruce Ely, a tax attorney and partner at Bradley Arant Boult Cummings LLP in Birmingham, Ala., told Bloomberg Tax. “In contrast, our individual income tax scheme selectively conforms to the IRC counterpart and is outdated in many respects, so benefits like the new Section 199A deduction for owners of pass-through entities apparently won’t carry over into Alabama law—at least not without curative legislation.”
Alabama begins tax delinquency amnesty program of 2018
On Sunday, the State of Alabama began taking applications for its tax delinquency amnesty program. From now through Sept. 30, eligible taxpayers can submit applications at alabamataxamnesty.com in an effort to gain amnesty for unreported tax liabilities. If the amnesty application is approved during the amnesty period, and if all returns, supporting documentation and full payment are received by Nov. 15, 2018, the Department will waive all interest and all penalties associated with the tax periods for which amnesty is applied. The program, signed by Gov. Kay Ivey in March of this year, applies to all taxes administered by the Alabama Department of Revenue (ADOR), which includes, but is not limited to, corporate and individual income, business privilege, financial institution excise, consumers use, sellers use, withholding, and sales taxes. Motor fuel, motor vehicle, and property taxes are excluded. Eligible tax liabilities include liabilities that became due prior to January 1, 2017, or tax liabilities for periods that began before January 1, 2017. Who can submit and how The amnesty program will be available to eligible taxpayers who have not been contacted by the department within the last two years and are not a party to a criminal investigation or litigation in any court of the United States or Alabama pending as of March 6, 2018, for nonpayment, delinquency, or fraud in relation to any Alabama taxes administered by the Department. All applications must be submitted electronically through the Alabama tax amnesty website, which provides all the information taxpayers may need on the program and answers to frequently asked questions. Taxpayers who believe they may have delinquent tax liabilities in Alabama should consult with their tax advisers regarding their eligibility for the tax amnesty program.
Alabama Department of Revenue extends tax deadline for storm victims
The Alabama Department of Revenue (ADOR) has extended the deadline to file tax returns for individuals and businesses who were affected by severe weather on March 19. “Our thoughts and prayers are with the people of Alabama who have been affected by these disastrous storms,” said Revenue Commissioner Vernon Barnett. “As they recover from the challenges and hardships caused by the storms, the Department is offering this assistance to hopefully help ease some of the burden.” Those taxpayers affected by the storms in the declared emergency areas with returns due from March 20 through April 30 have two months beyond the original deadlines to file without penalties. The extensions don’t apply to federal taxes. The counties included in the state of emergency declaration are: Blount, Calhoun, Cherokee, Clay, Cleburne, Colbert, Cullman, DeKalb, Etowah, Fayette, Franklin, Jackson, Jefferson, Lamar, Lauderdale, Lawrence, Limestone, Madison, Marion, Marshall, Morgan, Randolph, Shelby, St. Clair, Talladega, Walker, and Winston. Taxpayers seeking this relief should write “Severe Weather Relief – 2018” in red ink on any state paper return/report which relies on this filing extension relief. In regard to electronically-filed returns/reports, affected taxpayers should contact ADOR for filing guidance. Additionally, taxpayers in areas not specifically designated in the state of emergency declaration who encounter difficulty filing on time due to weather-related circumstances associated with the March 19 storms may also be eligible to request a waiver of late-filing and late-payment penalties after providing appropriate documentation to ADOR.
Alabama Department of Revenue provides extra security for tax returns
The Alabama Department of Revenue (ADOR) has announced the implementation of the electronic ID app (Alabama eID) which will safeguard residents from state income tax refund theft. According to Lifelock, there were a reported 100,000 cases of tax-related identity theft in 2017, ADOR hopes to combat that statistic. “We’re proud Alabama is leading the nation in securing taxpayer identities against state income tax fraud,” said Commissioner of the Alabama Department of Revenue, Vernon Barnett. “Not only will we protect taxpayers against criminals, taxpayers who use the Alabama eID app will also receive priority processing of their refund.” Global leader in identity security, IDEMIA, is providing ADOR with the app. “The app brings the highest level of security with a simple user interface to create the leading edge technology in protecting state income tax refunds,” stated Ed Casey, CEO of IDEMIA Identity & Security North America. “The technology’s unique ability is its secure link to the identity verification process residents underwent to receive their Alabama driver’s license or state ID. This authenticated connection between digital identity and physical identity is what ensures only you can claim your state income tax refund.” To operate the app, each user must complete a brief enrollment process during which their identity is verified. Using their driver’s license or state-issued ID and taking a selfie with their phone, Alabama eID matches the users information to the data and photo on record in the driver’s license database to verify the person enrolling with the app is who they declare to be. As well as offering advanced safety measures, those who use the Alabama eID app will be receiving priority processing for their tax refund.
Tax season begins next week, here are some helpful tips
Tax season just days away and both taxpayers and tax advisors are still getting acclimated with all the details of the historic tax reform legislation passed in December. This year, tax filing season spans from Jan. 29 until April 17. The Alabama Department of Revenue (ADOR) has released a few tips and suggestions to help taxpayers file their returns safely and get their refunds as quickly as possible: FILE EARLY! As soon as a taxpayers receive their W-2s, 1099s and other documents, they should file as soon as possible. Filing early can help us get your refund approved earlier, plus it enables you to beat ID thieves to the punch. EMPLOYERS – FILE THOSE W-2S! Employers must file employee W-2 information with ADOR by Jan. 31. Employers who file late may face penalties and will slow the processing of their employees’ tax returns. SAFETY FIRST! ADOR plays an important role in preventing state revenue and your money from ending up in the wrong hands. Fraud detection reviews, accuracy checks, and matching against employer W2s does require a little extra time, but it helps ensure that you get your money rather than fraudsters. WHERE’S YOUR REFUND? The Alabama Department of Revenue will begin releasing 2017 income tax refunds on March 1, 2018. This will give us time to properly vet and process the returns of early filers, confirm the accuracy of legitimate returns, and filter out fraudulent returns. The best way to track the progress of your refund is our website My Alabama Taxes (www.myalabamataxes.alabama.gov). It’s available 24 hours a day, seven days a week. If you don’t have internet access, you can track your refund progress by calling our automated refund system toll‐free at 1-855-894-7391 or our call center at 1-800-535-9410. TAKE A SELFIE TO GET YOUR REFUND SOONER! Want to speed up your refund AND protect your identity? Then download the Alabama eID mobile app and follow the guided process in the app to enroll. Your photo and driver’s license data will be authenticated by the Alabama Law Enforcement Agency to verify your identity. With the eID verified, you can go to My Alabama Taxes (www.myalabamataxes.alabama.gov) to register your eID and enroll in the “Opt-In” program. This program will notify you when a return is filed with the department using your information by sending a notification through your eID app. The app will allow you to securely verify that you did file the return, or decline the transaction because you did not file the return. BONUS – your eID-verified return will be processed more quickly! The eID app is free and available in both the App Store and Google Play. FILE FOR FREE! You can file state returns for free using My Alabama Taxes. Filing returns will require you to sign up for a MAT username to access your income tax account, file your return and make payments. Sign up for MAT at www.myalabamataxes.alabama.gov. HOW LONG WILL IT TAKE? The date your return is filed and how your return is filed largely determines when the refund can be issued. For example, electronically filed returns are received and processed significantly faster than returns that are mailed to ADOR. Also, if an error-free return is mailed in January or February, the taxpayer can expect to receive their refund sooner than if the return is filed in March or April. Last year, 20 percent of the income tax returns filed were received between April 1 and April 18. Returns filed this close to the deadline may require as many as 90 days to process. First‐time filers: It will take additional time for new filers to be validated and entered into our system. Until that time, our Refund Status website won’t recognize these taxpayers and will report their returns as “not entered in system.” It will take approximately 8-12 weeks to process a first time filer’s return. E‐filers: Generally, e‐filers can expect their refund about 8‐10 weeks after the date they receive their filing acknowledgement from the state. Paper filers: The return will take about 10‐12 weeks to process. ADOR must manually enter information from paper returns into our database. If the taxpayer received a letter from us asking for more information or to verify identity, the refund will be delayed until ADOR gets the requested information and they’ve been able to review it. KEEP IN TOUCH! After your return is filed, ADOR may send you letters asking for more information. If you do receive a letter from us, you should respond quickly so ADOR can review your information and get your refund to you as soon as possible. Fraud Detection. To detect and combat tax identity theft, ADOR uses a variety of methods to validate your identity and tax return. To help protect your information and keep your dollars from going to criminals, ADOR may send: An Identity Confirmation letter that asks you to take a short online quiz or provide copies of documents to verify your identity (https://revenue.alabama.gov/idquiz/) A return verification letter that asks you to verify online whether you or your representative filed the tax return ADOR received Accuracy Checks. ADOR stops and reviews about 3 to 5 percent of individual income tax returns each year to resolve mathematical errors or request missing information. ADOR wants to be sure that your tax return correctly reflects your information and intent. To do this, ADOR may send: A Request for Information letter that asks for missing or additional information to support data reported on your tax return A Tax Computation Change letter that provides an explanation of changes that were made to your tax return
Personnel note: Vernon Barnett named Ala. Commissioner of Revenue
Alabama Gov. Kay Ivey has appointed Vernon Barnett as the new commissioner of revenue, the governor’s office announced Friday. According to governor’s office, the appointment was a part of Ivey’s quest to steady the ship of state. “The Alabama Department of Revenue is vital to state government. The Department ensures that citizens are treated fairly and that all tax dollars are accounted for. Citizens must have confidence in their government, and that starts with the Commissioner of Revenue,” Ivey said in a statement. “This is the people’s business, and being transparent is my goal. I have appointed Vernon Barnett as Commissioner of Revenue because he shares my commitment to integrity and honesty in government. I am confident that Vernon has the necessary skills and experience to lead the Department of Revenue.” Barnett joins the Department of Revenue from the Alabama Department of Environmental Management, where he has served as Executive Counsel since 2011. A graduate of Vanderbilt University and the University of Alabama School of Law, Barnett served as a senior advisor to the director at ADEM. He has also managed ADEM’s relationship with the state legislature, and has held positions in both the Alabama Corrections Department and the Attorney General’s office. “I am thankful to Governor Ivey for the trust she has placed in me; I look forward to working with her to restore the confidence of the people in state government,” Barnett commented. “I am also excited to join with the dedicated employees in the Revenue Department as we seek to properly collect and account for the monies entrusted to us by the people of Alabama.” Barnett will officially begin his duties as Commissioner of Revenue on May 22, where he will replace Julie Magee whose resignation was accepted on May 5.
State’s Department of Revenue offers tips as tax deadline looms
With the deadline for filing 2016 taxes less than a month away, the Alabama Department of Revenue (ADOR) has offered tips to ensure taxpayers are ready. Because of an overlap in tax deadlines and federal/state holidays, this year’s deadline will be April 18. Tips provided by the department include: To ensure that citizens are not having their identities stolen and false claims filed in their names, ADOR may send notification to taxpayers stating they are required to complete an “identity confirmation quiz.” Anyone who receives such a quiz will be required to complete it before a return will be issued. The quiz can be completed in one of two methods. The quiz can be completed on the telephone by calling 1-800-535-9410 or online. Accessing the quiz will require the letter ID, last four digits of your Social Security number and date of birth. State returns can be filed for free using My Alabama Taxes (MAT). Filing returns will require filers to sign up for a MAT username to access their income tax account, file their return, and make payments. Taxpayers can sign up online. This year, filers can take advantage of a new security feature that allows an opt-in service that will notify them when ADOR receives an Individual Income Tax return that has been filed using a Social Security number. This service can help alert filers to the possibility that criminals have stolen information and are using it to steal the refund. Opt-in by logging into MAT and follow the link, “Notify Me of Filed Returns.” There are two ways to check the status of a refund: Visit https://myalabamataxes.alabama.gov, click on “Check on My Refund Status” on the left, then enter the refund amount and Social Security number or call the refund hotline number 1-855-894-7391. Alabama individual and business income taxpayers are no longer required to file an Alabama extension form if they find they cannot meet their annual return filing deadline. Taxpayers will be given an automatic single six-month extension to file. The automatic extension only applies to filing a return; no extensions are granted for payment of taxes due. The ADOR statement further notes that the best advice in terms of 2017 tax filing is to file early. “Filing early allows taxpayers to file before the criminals,” a news release from the ADOR said. “Beat the criminals to the punch and any subsequent fraudulent return filings will be rejected.”
