Alabama Form 40NR – Nonresident and Part-Year Resident Income Tax Return (2026)
Last reviewed: 2025-11-12
Use the Alabama Tax Form Calculator Alabama Form 40NR – Nonresident/Part-Year Resident Income Tax Return as a stand alone tax form calculator to quickly calculate specific amounts for your 2026 Alabama state tax return. Alternatively, you can use one of our Combined Federal and State Tax Estimators to quickly calculate your salary, tax, and take-home pay.
Form 40NR is used by nonresidents and part-year residents of Alabama to report income earned in the state and calculate the portion of tax owed to Alabama. This ensures fair taxation only on income derived from Alabama sources such as wages, rental income, or business activities within the state. The return also allows credits for taxes paid to other jurisdictions to avoid double taxation.
Nonresidents must file Form 40NR if they received Alabama-source income that meets or exceeds the state filing threshold. Part-year residents must file if they lived in Alabama for any portion of the year and earned income while a resident.
How to Complete Alabama Form 40NR
Follow these key steps to correctly calculate and apportion your Alabama income:
- Part I – Allocation of Income: Report total income from all sources (Line 5B) and the portion earned in Alabama (Line 5C). Compute your apportionment ratio by dividing Alabama income by total income (Line 10).
- Part II – Adjusted Gross Income: Subtract allowable adjustments such as IRA deductions or moving expenses from your total and Alabama income to determine adjusted gross income (Line 12B and 12C).
- Part III – Deductions and Exemptions: Apply either the standard deduction or itemized deductions, apportioned based on your income ratio. Include personal and dependent exemptions as applicable.
- Part IV – Tax and Payments: Use the Alabama income tax rates to calculate tax liability (Line 19). Apply credits for taxes paid to other states (Schedule CR) and subtract any withholding or estimated payments to determine the balance due or refund.
Attach all W-2s, 1099s, and supporting schedules (e.g., Schedule CR for credits, Schedule A for itemized deductions) when submitting your return.
| FILING STATUS | ||
| FS | Filing Status | |
| PART I – ALLOCATION OF INCOME | ||
| 5B | Total income from all sources | |
| 5C | Income from Alabama sources | |
| 6B | Adjustments to income (e.g., IRA, moving expenses) | |
| 6C | Adjustments related to Alabama income | |
| 7B | Total adjusted income (5B + 6B) | |
| 7C | Total adjusted Alabama income (5C + 6C) | |
| 8B | Total deductions allowable for federal adjusted gross income | |
| 8C | Deductions connected with Alabama income | |
| 9B | Total income after deductions (7B − 8B) | |
| 9C | Total Alabama income after deductions (7C − 8C) | |
| 10 | Apportionment ratio (9C ÷ 9B) | |
| PART II – ADJUSTED GROSS INCOME COMPUTATION | ||
| 11B | Total federal adjustments (e.g., educator, HSA, moving expenses) | |
| 11C | Alabama portion of adjustments | |
| 12B | Federal adjusted gross income (9B − 11B) | |
| 12C | Alabama adjusted gross income (9C − 11C) | |
| PART III – DEDUCTIONS AND EXEMPTIONS | ||
| 13C | Standard or itemized deduction (apply apportionment) | |
| 14B | Federal taxes paid deduction | |
| 14C | Alabama portion of federal taxes paid | |
| 15C | Personal exemptions (apportioned) | |
| 16C | Dependent exemptions (apportioned) | |
| 17C | Total deductions (13C + 14C + 15C + 16C) | |
| 18C | Taxable income (12C − 17C) | |
| PART IV – TAX AND PAYMENTS | ||
| 19 | Tax (apply Alabama rate schedule to Line 18C) | |
| 20 | Credits for taxes paid to other states (Schedule CR) | |
| 21 | Tax withheld from Alabama income (W-2, 1099) | |
| 22 | Balance Due (Tax − credits − withholding) | |
| 23 | Overpayment (if credits + withholding > tax) | |
| DEDUCTION METHOD | ||
Examples and Scenarios
Example 1 – Nonresident Employee: Jordan, a Florida resident, worked in Alabama for 45 days earning $12,000. Total income for the year was $48,000, so the apportionment ratio is 0.25. Only $12,000 × 3.07% = $368.40 is taxable by Alabama.
Example 2 – Part-Year Resident: Avery moved from Georgia to Alabama on July 1, earning $36,000 before the move and $28,000 after. Only the $28,000 is subject to Alabama tax. Use Form 40NR to allocate income before and after residency change.
Example 3 – Multi-State Business Income: A consultant with operations in both Alabama and Mississippi earned $60,000 total, with $24,000 attributed to Alabama clients. The apportionment ratio (0.40) applies to both income and deductions to determine taxable Alabama income.
Last reviewed: 2025-11-12: If you believe this form requires an update, please contact us.
Further Guidance and Related Forms
- Form 40 – Alabama Resident Income Tax Return
- Schedule CR – Credit for Taxes Paid to Other States
- Schedule A – Itemized Deductions
- Alabama Department of Revenue – Individual Income Tax
Form 40NR ensures that Alabama only taxes income earned within its borders while providing fair apportionment for part-year residents. Accurately reporting your total and Alabama income helps avoid penalties and ensures compliance with Alabama’s state tax laws.
Quick Access Tools
Frequently Asked Questions
What happens if Form AL-40X shows that I owe additional Alabama tax?
If your amended return results in a higher tax liability, you should pay the additional amount when you file AL-40X. Interest on underpaid tax generally accrues from the original due date of the return, not the date you amend, so delaying payment only increases the final cost. If you are mailing a check, Alabama recommends using a payment voucher such as Form AL-40V or AL-40NRV, depending on whether you are a resident or nonresident, so that your payment is correctly tied to the amended year and account. Failure to settle the extra liability can lead to billing notices, further interest, and potential collection actions. Even so, voluntarily amending and paying usually results in a better outcome than waiting for Alabama or the IRS to discover discrepancies.
What records should parents keep to support a Schedule AATC claim?
Parents should retain invoices, tuition bills, proof of payment (bank statements, receipts), enrollment confirmations, and school documentation proving entry into the non-failing or nonpublic school. The Alabama Accountability Act requires strict substantiation to prevent misuse, so taxpayers should also keep the school’s classification documents or confirmation that the original school appeared on the “failing school” list for the appropriate year. If audited, the Alabama Department of Revenue may request these records to validate the refundable credit. While documents are not mailed with the return, they should be kept for at least three years.
How can I estimate my Alabama tax before using Form 40A?
You can preview your expected liability with the Alabama State Tax Calculator. It uses current rates, thresholds, and personal exemptions to show how much tax you’ll owe or be refunded. This is especially useful if you are switching from the full Form 40 or adjusting withholding.
Who must file Alabama Form AL-40NR and how does it differ from the resident Form AL-40?
Form AL-40NR is required for individuals who were not Alabama residents for the tax year, or who lived in the state only part-time, but earned income from Alabama sources. Unlike the resident Form AL-40, which reports all income from all sources, Form AL-40NR focuses on allocating income between Alabama and other jurisdictions. You must complete the return if you earned wages for work performed in Alabama, had rental property within the state, received income through a pass-through entity operating in Alabama, or sold property located in Alabama. Part-year residents must report income earned while domiciled in the state and any income sourced to Alabama thereafter. The AL-40NR also requires an allocation schedule to separate Alabama-sourced income from non-Alabama income, ensuring the correct proportion of tax is calculated. This prevents nonresidents from overpaying on non-Alabama income while still ensuring Alabama collects the correct amount on in-state activity.
Why don’t my brackets match payroll tables?
Employers may use different rounding/timing tables; small variances are normal.
Important Notes
All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.