Alabama NR Prorated exemption calculation

Forum|Forum|5 years ago
March 21, 2021
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I had a small income ( $158) from a DST property located in Alabama (AL). I am an AL non resident

In a different post, I asked if I have to file a return for AL, the answer was:

You are required to file an Alabama (AL) return if as a nonresident your income is over the allowable prorated exemption (full year resident amounts are $3,000 for married filing jointly and $1,500 for single). AL Instructions

I am still confused about how to calculate the prorated exemption?

Let's say the total income is $100,000 and the Alabama income is $10

Would my prorated calculation be 100,000 /10 = 10,000 or 10/100,000 = 0.0001 ?

2. What number I need to use? Is it the total income or the taxable income? In my return, those are 2 different numbers: the taxable income is the total income minus deductions.

Not A Product Question

Best answer by JohnW152

It’s .0001.

Your standard deduction or itemized deductions, your personal exemption(s) and dependent exemption(s) have to be prorated by the ratio of your income from Alabama sources to your total income from all sources.

In calculating your taxable income, you'll deduct your prorated standard or itemized deductions, prorated personal exemptions and prorated dependent exemptions.

JohnW152

Your calculation is correct.
You use your ratio of income from Alabama sources to your total income from all sources.

Please see the Form 40NR Booklet for more information.

cuadradog1Author

Thanks for the answer. I apologize if I keep on this:

Let's say the total income is $100,000 and the Alabama income is $10

Would my prorated calculation be

a. 100,000 /10 = 10,000 ?

b. 10/100,000 = 0.0001 ?

JohnW152Answer

It’s .0001.

In calculating your taxable income, you'll deduct your prorated standard or itemized deductions, prorated personal exemptions and prorated dependent exemptions.

Sioux14

Relating to this example above ($10 AL income & $100k total income), does this mean to reduce the $3000 exemption by the .0001 calculation? So the total exemption would be $2999.70 since the exemption is only $0.30 ($3000x.0001=$0.30).

Are we to use the $0.30 as the total exemption, essentially having to claim all the AL income and file a NR return? Thanks