Financial Statement Guidance – Entity-level State Income Tax Payments Made by Pass-Through Entities: Many CPAs have inquired about the proper reporting of the entity-level state income tax payments for GAAP financial accounting purposes. The AICPA has prepared a summary which outlines the key considerations and includes references to the applicable guidance under ASC 740. A copy of that guidance can be accessed through the link below.

LINK TO AICPA SUMMARY (PDF DOCUMENT) 

Request for Consideration of Relief For Missed or Late PTE Elections: Many CPAs have asked whether the Alabama Department of Revenue (ADOR) will grant any type of relief to pass-through entities which did not file the required election through the Alabama Department of Revenue’s MAT system by the statutory deadline.

The ASCPA submitted this question to the ADOR, and ADOR representatives have indicated that the ADOR does not have the authority or discretion to delay or waive the required time and manner of claiming Electing PTE status. The statutory requirements under Section 40-18-24.4(d) and the regulatory requirements under Ala. Admin. Code r. 810-3-36-.01 must be met in order to claim Electing PTE status. Because the time to make the election is set by statute and because the manner of election is set by a regulation duly adopted under the authority of that statute, the ADOR does not have a legal mechanism to waive the requirements.

Reports of Possible Issues For Fiscal Year Pass-Through Entities Attempting to Make the PTE Election in the MAT System: Some CPAs have indicated that they have faced system-related difficulties as they have attempted to make the election in the MAT system for pass-through entities which have a fiscal year-end. At this time, taxpayers may call the ADOR at 334-242-1170, option 5, for assistance with the election for fiscal year taxpayers. The ASCPA State Tax Committee has added this item to the agenda for the upcoming meeting with ADOR representatives in August.