Alabama Form 2210AL: Required Payment, Penalty, and Waivers

Alabama Form 2210AL is the worksheet you attach to your Form 40 to calculate the penalty for underpaying estimated state income tax. You fill it out when your tax owed after withholding comes to $500 or more and you missed both safe harbors; the form checks that gate in Part I, then has you work the shortfall out quarter by quarter in Part III and apply the state’s underpayment interest rate to produce the penalty you report on Form 40, line 31.¹

Do You Actually Need to File It

Two tests decide this, and both live in Part I. First, subtract your Alabama withholding from your net tax due on Form 40, line 18. If the result is under $500, stop. You owe nothing and the form stays off your return.¹

Second, even above $500, you escape the penalty if your withholding plus timely estimated payments equaled at least one of these:

90% of your current-year Alabama tax liability (66⅔% for farmers and fishermen), or
100% of the tax shown on your prior-year Alabama return, as long as that return covered a full 12 months.

Alabama’s safe harbor is a flat 100% of prior-year tax at every income level. The federal 110% rule for higher earners does not apply here.²

One more thing worth knowing before you start: if none of the Part II boxes apply to your situation and you simply underpaid, you can skip the form entirely and let the Department of Revenue calculate the penalty and bill you.¹ You file 2210AL when you want to control the math, use the annualized method, treat withholding by actual dates, or ask for a waiver.

What to Gather First

Have these in front of you before you open the form:

Your completed Form 40 (or 40NR). You need line 18 (line 20 on 40NR), the net tax due after credits.
Total Alabama income tax withheld during the year. Keep this separate from estimated payments; the form treats them differently.
A list of every estimated payment you sent to the Alabama Department of Revenue with the exact date each was received. Timing drives the penalty formula.
Your prior-year Alabama tax liability for the 100% safe harbor on Part I, line 7.

Download the form and instructions for the correct tax year from the Department of Revenue; line references and the interest rate change year to year.³

Part I: Your Required Annual Payment

Part I turns the two tests above into eight lines. Work them in order:

Line 1: Net tax due after credits from Form 40, line 18.
Line 2: Other payments from Schedule CP, Section B, Line 1, if any apply.
Line 3: Line 1 minus line 2, your current tax due.
Line 4: Line 3 × 0.90, the current-year safe harbor amount.
Line 5: Total Alabama withholding for the year. Do not include estimated payments.
Line 6: Line 3 minus line 5. If this is under $500, stop; no penalty, no form.
Line 7: 100% of your prior-year tax, the other safe harbor.
Line 8: The smaller of line 4 or line 7. This is your required annual payment, the total that should have been paid across the four quarters.

Line 6 is the real gate. Line 8 is the number Part III divides into installments.¹

Part II: Why You’re Filing

Part II has five boxes. Check whichever apply, because each sends you down a different path:

Box A: You’re asking for a full waiver of the penalty. File page 1 only; you don’t calculate anything.
Box B: You’re asking for a partial waiver. You do run the full calculation so the Department can see what you’re contesting.
Box C: Your income was uneven and the Annualized Income Installment Method on Schedule AI lowers or wipes out the penalty.
Box D: Your penalty is lower when withholding is credited on the dates it was actually withheld rather than spread evenly across the four due dates.
Box E: You filed a joint return in one of the two years and not the other, and line 7 came out smaller than line 4. File page 1 and skip the calculation unless B, C, or D also fits.

If none fits, don’t file the form.¹

Part III: The Regular Method, Quarter by Quarter

Part III uses four columns, (a) through (d), one per Alabama installment period. The due dates for calendar-year filers are April 15, June 15, September 15, and December 15.⁴ Note that fourth-quarter date: Alabama wants the final payment on December 15, a month earlier than the federal January 15. Fiscal-year filers use the 15th day of the 4th, 6th, 9th, and 12th months of their fiscal year.

Your first decision is line 1, the required installment for each column:

Equal installments: Put 25% of your Part I, line 8 figure in each column. Use this when income arrived at a roughly even pace through the year.
Annualized installments: Complete Schedule AI and copy its line 25 amounts into the four columns. Use this when income was lumpy.

From there, work each column top to bottom. Line 2 collects estimated payments, withholding, and refundable credits credited to that quarter. Lines 3 through 7 move overpayments and underpayments between columns. Line 8 is the underpayment for the quarter: when line 1 exceeds line 6, the difference is what the state charges interest on. Line 9 passes any overpayment forward.⁵

The penalty is calculated separately for each quarter. A late Q2 payment still generates a Q2 penalty even if you overpaid Q3.¹ If line 2 meets or beats line 1 in every column, you paid enough in every quarter and don’t file the form.

Schedule AI When Income Was Uneven

Schedule AI is for taxpayers whose income arrived in bursts: a Q3 bonus, seasonal business revenue, a one-time capital gain late in the year. Instead of assuming 25% of your income landed in each quarter, you report what you actually earned through each cumulative period and let the schedule size the required installment to match.

You enter total income for the period minus adjustments on line 1, carry through itemized deductions (or skip to line 7 for the standard deduction), apply exemptions and credits, and arrive at a required installment for each quarter on line 25. Those four numbers transfer to Part III, line 1.⁵ The schedule takes real work, but when early-year income was low, it can shrink the penalty substantially.

How the Penalty Is Calculated

Once Part III produces an underpayment on line 8 for a quarter, the “Figure the Penalty” lines (10 through 12) apply this formula:

Underpayment × days late ÷ 365 × underpayment rate

Line 10 counts the days from each quarter’s due date to the earlier of the date you paid or April 15 of the following year. Line 11 multiplies underpayment by days. Line 12 applies the rate. For the 2025 tax year, the Alabama underpayment rate is 7%, matching the federal rate under 26 U.S.C. § 6621.⁶ The rate can change quarterly, so confirm the one published for your tax year before you compute.

Total the four columns, carry the result to Schedule ATP, Part II, and then to Form 40, line 31.⁷

If You’re a Farmer or Fisherman

When at least two-thirds of your gross income for the current or prior year came from farming or fishing, use Part IV in place of Part III.¹ Two things change. The current-year safe harbor drops to 66⅔% of tax owed.⁷ And if you file your return and pay the full tax by March 1, no penalty applies at all; check the appropriate box on Schedule ATP, Part II.⁸

Asking for a Waiver

The Form 2210AL instructions list two waiver grounds:

You retired after reaching age 62, or became disabled, in the current or prior tax year, and the underpayment was from reasonable cause rather than willful neglect.
The underpayment resulted from a casualty, disaster, or other unusual circumstance beyond your control, and charging the penalty would be inequitable.

For a full waiver, check Box A in Part II and send page 1. For a partial waiver, check Box B and finish the calculation so the Department can see which part you’re disputing.¹

Filing the Form

Attach Form 2210AL to your Form 40 or 40NR when you file. The penalty flows through Schedule ATP, Part II, to Form 40, line 31.⁷ Paper filers use P.O. Box 154, Montgomery, AL 36135-0001 when no payment is enclosed, and P.O. Box 2401, Montgomery, AL 36140-0001 when a payment is enclosed.⁹ Electronic filers can use Alabama Interactive for Form 40, and the My Alabama Taxes portal handles estimated tax payments throughout the year.¹⁰ If the Department recalculates your penalty, you’ll get a notice; paying any additional balance quickly keeps further interest from building.

1
Alabama Department of Revenue. Alabama Form 2210AL 2025 Instructions
2
Alabama Legislature. Alabama Code 40-18-80 – Payment of Estimated Tax by Individuals
3
Alabama Department of Revenue. Underpayment of Estimated Tax by Individuals
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Alabama Department of Revenue. When Are Estimated Tax Payments Due?
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Alabama Department of Revenue. Alabama Form 2210AL Instructions
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Alabama Department of Revenue. Underpayment Interest Rate Notice FY26
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Alabama Department of Revenue. Alabama Form 40 Booklet 2024 – Underpayment Penalty
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Alabama Department of Revenue. Alabama Will Follow Federal Filing Relief Offered to Alabama Farmers and Fishermen
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Alabama Department of Revenue. What Is the Address for Mailing My Return?
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Alabama Department of Revenue. Individual Income Estimated Taxes