Schedule AB: Add-Back Form with Instructions (2024)
Alabama · Alabama DOR · Used for tax years 2024
Alabama Schedule AB (Form 20C) reports interest and intangible expenses paid to related members and calculates amounts exempt from add-back. It also reports interest disallowed under IRC Section 163(j) and related carryforwards, and must be attached to Form 20C.
Who files this form
Schedule AB is the add-back form for Form 20C taxpayers reporting interest or intangible expenses paid to related members. Complete a separate column for each related member who received this income from the taxpayer.
Schedule AB must be attached to Form 20C.
What you'll need
Have the following information ready:
- The taxpayer’s name, FEIN, and tax period.
- Each recipient related member’s name and FEIN.
- Intangible expenses and interest expenses paid to each related member.
- Information for any applicable exemption, including taxing jurisdictions, apportionment percentages, allocated income, and receipts by category.
- Interest expense disallowed under IRC Section 163(j) and Section 163(j) carryforward amounts.
Use additional Schedule AB pages if needed to report all recipient related members.
How to file
Attach Schedule AB to Form 20C.
- Complete one column for each recipient related member.
- Complete the applicable exemption sections.
- Use the additional-member page for additional recipients, and include all pages when calculating the totals on page 1, lines 14 and 15.
- If claiming the exemption described in §40-18-35(b)(3) and §40-18-24(e), line 10b must be greater than zero and an informed corporate officer must sign Schedule AB under penalty of perjury.
The supplied form does not give a mailing address or e-filing instructions.
Common mistakes
- Leaving Schedule AB out of the return. The form says it must be attached to Form 20C.
- Omitting a related member. A column must be completed for each recipient related member. Attach additional pages as needed and include all members in the page 1 totals.
- Using the additional-member page for another purpose. The form says to use that page only for additional members.
- Missing the required signature for the specified exemption. To qualify under §40-18-35(b)(3) and §40-18-24(e), line 10b must be greater than zero and an informed corporate officer must sign under penalty of perjury.
Questions people ask
What expenses go on lines 2 and 3?
Enter intangible expenses paid to the recipient related member on line 2 and interest expenses paid to that member on line 3. Add them on line 4.
What if I have more related members than the page allows?
Attach additional Schedule AB pages. Complete a column for every recipient related member and include all pages in the totals on page 1.
How do I determine the exempt amount on line 11?
Enter the greatest amount from lines 5f, 6, 10a, or 10b.
What does the corporate officer’s signature certify?
For the exemption described in §40-18-35(b)(3) and §40-18-24(e), the signature certifies that tax avoidance was not a principal motivating factor in the transactions giving rise to the related member’s interest or intangible expenses and costs. The signature is made under penalty of perjury.