(a) The following items shall be added to federal taxable income for purposes of computing net income under this chapter:

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Terms Used In Alabama Code 40-16-1.2

  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • following: means next after. See Alabama Code 1-1-1
  • state: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Alabama Code 1-1-1
  • year: means a calendar year; but, whenever the word "year" is used in reference to any appropriations for the payment of money out of the treasury, it shall mean fiscal year. See Alabama Code 1-1-1
(1) The tax due under this chapter that is deducted in computing federal taxable income.
(2) State and local taxes that are deducted for purposes of calculating federal taxable income for which a credit is claimed under Section 40-16-8, to the extent the credit is utilized to reduce the tax owed under this chapter.
(3) Refunds of federal income taxes deducted in prior tax periods for purposes of computing the tax due under this chapter.
(4) Dividends received from a corporation in which the taxpayer owns less than 20 percent of the stock, by vote and value, but only to the extent the dividends are properly deducted in computing taxable income for federal income tax purposes.
(5) State, county, and municipal interest income from loans and securities that is exempt for federal income tax purposes.
(6) Any interest that was treated as paid or incurred in the current taxable year under 26 U.S.C. § 163(j)(2).
(7) The amount of foreign-derived intangible income and global intangible low-taxed income that was deducted under 26 U.S.C. § 250.
(8) The amount of any capital loss carryback or carryforward deducted for federal income tax purposes.
(b) The following items shall be deducted from federal taxable income for purposes of computing net income under this chapter:

(1) Refunds of the tax due under this chapter that are included in computing federal taxable income.
(2) Federal income taxes paid or accrued during the taxpayer’s taxable year in accordance with the taxpayer’s method of accounting.
(3) If the taxpayer owns 20 percent or more of the stock, by vote or value, of the distributing corporation, dividend income, including amounts described in 26 U.S.C. § 951, from non-U.S. corporations to the same extent such dividend income would be deductible under 26 U.S.C. § 243 if received from U.S. corporations.
(4) Federal Deposit Insurance Corporation (FDIC) insurance premiums not deductible for federal income tax purposes under 26 U.S.C. § 162(r).
(5) Interest not deductible for federal income tax purposes under 26 U.S.C. § 163(j)(1).
(6) Interest not deductible for federal income tax purposes under 26 U.S.C. §§ 265 or 291 related to tax-exempt securities.
(7) The amount of global intangible low-taxed income that is included in the gross income of such financial institution under 26 U.S.C. § 951A.
(8) The amount treated as dividends under 26 U.S.C. § 78.
(9) Expenses otherwise deductible that were not deducted for federal income tax purposes as a result of an election to claim a federal income tax credit for those expenses.
(10) Solely with respect to credit unions, the amount paid out as dividends on the withdrawable shares of such credit union.
(11) The amount of otherwise deductible capital losses incurred during the taxable year that were not deducted for federal income tax purposes.
(c) Nothing in this section shall be construed to allow any item to be deducted more than once or to allow a deduction for any item that is excluded from income or to allow any item to be included in the Alabama net income of more than one taxpayer.
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