Alabama 1099 Form: Deadlines, Form A-3, and Penalties

Alabama 1099 filing requirements apply when you make non-wage payments of $1,500 or more in a calendar year to a single payee, or whenever you withheld Alabama income tax from a non-wage payment regardless of the amount. You file either directly with the Alabama Department of Revenue through My Alabama Taxes or by relying on the IRS Combined Federal/State Filing program to forward the data for you. The state runs its own deadlines and penalties, so federal compliance alone is not enough.

When a 1099 Has to Go to Alabama

Two independent triggers create the obligation. If you withheld Alabama income tax from a non-wage payment, that 1099 must go directly to the ADOR, no matter how small the payment.¹

Separately, under Alabama Administrative Code Rule 810-3-26-.01, any resident payer engaged in a trade or business who makes nonwage payments of $1,500 or more in a calendar year to any person must file a copy of the federal 1099 with the ADOR.² That $1,500 floor is higher than the federal $600 trigger that applies to most 1099 types. If a payment totals between $600 and $1,499 for the year, you may owe a federal 1099 but no Alabama filing, provided you didn’t withhold state tax.

The forms Alabama accepts include 1099-NEC, 1099-MISC, 1099-R, 1099-INT, 1099-DIV, and 1099-K.¹ The 1099-K has its own deadline rule, covered below.

Two Ways to File: Direct or Through the IRS

Alabama participates in the IRS Combined Federal/State Filing (CF/SF) program. If you file your 1099s with the IRS, the IRS forwards the data to Alabama, and you do not need prior approval from the ADOR to use it.¹

There is one strict limit. CF/SF is only available when no Alabama income tax was withheld. If you voluntarily withheld Alabama tax from any non-wage payment, those 1099s cannot ride through CF/SF. They have to be uploaded directly to the ADOR through My Alabama Taxes, along with Form A-3, the state’s annual reconciliation.¹

Alabama Filing Deadlines

1099s with Alabama tax withheld: due with Form A-3 by January 31 of the year following the payments.¹
1099s with no Alabama tax withheld: due by March 15, whether filed directly with the ADOR or submitted through the CF/SF program.¹
1099-K forms: due within 30 days after the federal filing due date, on or before April 30 each year, uploaded through My Alabama Taxes.³

Recipient copies are a separate deadline. You must furnish the payee’s copy of every 1099 by January 31, regardless of when the state filing is due.¹

Preparing the Form

Alabama uses the standard federal 1099 forms; there is no separate state version. The state information fields do have to be filled in. On Form 1099-NEC, those sit in Boxes 5 through 7 at the bottom. Box 5 reports Alabama state income tax withheld, Box 6 holds your Alabama state identification number, and Box 7 shows the state income amount for the payment.⁴ Other forms in the 1099 series have their own state information boxes in designated areas.

In most cases the state income figure matches what you reported federally, unless a specific Alabama exemption applies. Even when no tax was withheld, the state boxes should be completed when you’re filing directly with the ADOR rather than going through CF/SF.

Alabama Withholding Account Number

If you withheld Alabama tax, you need an Alabama withholding tax account number in the state ID box. Register through My Alabama Taxes at myalabamataxes.alabama.gov. New account numbers are 10 alphanumeric characters that start with the letter “R.”⁵ Confirm your payroll software accepts that alphanumeric format; some systems expect a purely numeric ID and will reject the “R.”

You need the account when you employ anyone working in Alabama, when you have Alabama residents working out of state for whom you are not withholding tax in that other state, or any time you choose to withhold Alabama tax from non-wage payments.⁵

Electronic Filing and Form A-3

Electronic filing is mandatory for anyone submitting 10 or more W-2s and 1099s with Alabama income tax withheld, and for anyone who filed and paid their withholding taxes electronically during the year.⁶ If either applies, paper is not an option.

Electronic submissions go through the My Alabama Taxes portal. The upload uses the same file layout as the IRS FIRE system, following IRS Publication 1220.¹ A FIRE-compatible file generated by your payroll software usually works for Alabama too. Only 1099s with Alabama income tax withheld should be included in the file you upload to MAT.⁶

Filers who fall below the electronic threshold and did not pay withholding taxes electronically can mail paper 1099s (without withholding) to the Alabama Department of Revenue, PO Box 327489, Montgomery, AL 36132-7489.¹

Form A-3 is the annual reconciliation that must accompany any 1099 filing with Alabama tax withheld. Treat it as a two-step process in MAT: upload the W-2 and 1099 data, then submit Form A-3 reconciling what you withheld against what you remitted during the year.⁶ If the total withheld on the forms is less than what you remitted, you can request a refund or credit; if more, you must include a check for the difference. The ADOR returns any A-3 submitted without the accompanying W-2s, so file them together.⁷

Waiver From Electronic Filing

A hardship waiver from mandatory electronic filing can be requested from the IRS using Form 8508, filed at least 45 days before the due date. The IRS evaluates these mainly on whether the cost of filing electronically significantly exceeds the cost of paper, and an approved waiver covers only the current tax year.⁸ A federal waiver addresses the IRS requirement. Whether the ADOR will accept paper when its own e-filing mandate applies is a question to put directly to the state.

Extensions

If you cannot meet the deadline, you can request a 30-day extension from the IRS on Form 8809. For most 1099 types the initial 30 days is automatic and needs no justification. A second 30-day extension can be requested on top of the first, but the second request must be on paper and must explain the need.⁹

Form 1099-NEC is the exception. Only one 30-day extension is available, it requires written justification, and the request must be filed by January 31, the same day the return is due. Decide early.⁹

For 1099-K specifically, the ADOR recognizes federal extensions. A 30-day IRS extension pushes the Alabama deadline by the same 30 days, and a second IRS extension carries through to Alabama as well.³

An approved extension only moves the filing deadline for the IRS and state. It does not change the January 31 deadline for furnishing the recipient copy.⁹

Correcting a Filed 1099

If you find a mistake after filing, submit a corrected return. Federal electronic corrections follow different procedures depending on the system: FIRE uses the correction format in Publication 1220, and IRIS uses Publication 5718.¹⁰

On the Alabama side, corrected 1099s with state tax withheld should be resubmitted through My Alabama Taxes using the same upload process as the original. If the original went through CF/SF, the corrected federal filing should flow to Alabama the same way. When you cannot confirm a correction reached the ADOR, contact them directly rather than assuming CF/SF carried it.

Penalties

Alabama imposes a 10 percent penalty on withholding tax not paid by the due date. If the balance remains unpaid 30 days after the ADOR issues its first notice and demand, another 10 percent penalty applies to the unpaid amount stated in that notice.¹¹ Interest runs on top of the penalties.

These penalties bite hardest in withholding situations: tax was withheld and either not remitted or not reported on time. Filing on paper when you were required to file electronically can trigger the same consequences as filing late, so treat the e-file mandate as the real deadline.

Keeping Records

The IRS requires employment tax records, including copies of filed 1099s and confirmation numbers, to be kept for at least four years after filing.¹² Keep the supporting documentation with the forms: invoices, payment records, contracts, and any correspondence about payees’ taxpayer identification numbers. Paper or electronic storage is fine so long as the records stay legible and accessible if the IRS or ADOR asks for them.

1
Alabama Department of Revenue. Information Return Filing Requirements (1099)
2
Alabama Department of Revenue. Alabama Admin Code 810-3-26-.01 Information Returns
3
Alabama Department of Revenue. Form 1099-K
4
Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
5
Alabama Department of Revenue. Do I Need a Withholding Tax Account Number
6
Alabama Department of Revenue. Electronic Filing of Withholding Tax and Annual Reconciliation of Alabama Income Tax Withheld
7
Alabama Department of Revenue. Form A-3 Annual Reconciliation of Alabama Income Tax Withheld
8
Internal Revenue Service. Topic No. 803, Electronic Filing Waivers or Exemptions and Filing Information Returns
9
Internal Revenue Service. Form 8809 Application for Extension of Time to File Information Returns
10
Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
11
Cornell Law Institute. Alabama Admin Code Rule 810-14-1-.30 Penalty for Failure to Timely File or Pay
12
Internal Revenue Service. Employment Tax Recordkeeping